S'pore has no plan to further aid Jakarta

S'pore has no plan to further aid Jakarta

SINGAPORE (Dow Jones): Singapore Finance Minister Richard Hu
said in Parliament on Friday that the country had no further
plans to provide development assistance to Indonesia.

Hu said "there is no need to start yet another" plan,
especially as the amount of humanitarian aid Singapore can
provide is limited.

He added that humanitarian assistance is "already adequately
covered by well-established mechanisms."

However, Singapore will focus on areas where help would be
most effective and these would be "principally be in such areas
as technical training and humanitarian assistance where the
situation requires."

Singapore currently provides training and transfer of
technical assistance to other countries through the Singapore
Cooperation Program, administered by the Ministry of Foreign
Affairs, Hu said.

This year alone, about S$16.25 million was allocated to the
program, Hu said, adding that a considerable proportion has been
channeled to Indonesia and Vietnam.

He said the program focuses on providing training and
assistance in areas where Singapore has special competency such
as maritime management, airport management, economic and trade
development, and financial services.

At a scheduled sitting of Parliament, Hu also said that the
Government of Singapore Investment Corp., the government's cash-
rich investment vehicle, won't suffer losses as a result of
controls on the ringgit recently imposed by Malaysia.

Addressing questions from members of Parliament, Hu said the
government is expected to approve a law for companies to buy back
their shares by November. Although the practice is very common in
the U.S., Singapore companies are still forbidden from buying
back their own shares.

Hu said the share buyback proposal is included in the
Companies Bill 1998, which will be tabled later Friday.

The proposal, he said, was developed after extensive
consultation with the Stock Exchange of Singapore, the
Association of Banks of Singapore, the Singapore Merchant
Bankers' Association, the Law Society and industry participants.

Once the bill is passed, companies need no longer apply to the
court for approval to buy back their shares.

Currently, the only way companies can enhance shareholder
value is through capital reduction exercises, which require the
High Court's confirmation, Hu said.

In addition to being costly and time consuming, capital
reduction exercises don't provide companies with the same
flexibility as a buyback in terms of the amount of capital
returned to shareholders, he added. He also said appropriate
safeguards and disclosure requirements have been incorporated in
the proposed amendments to ensure that companies don't abuse
share buybacks.