The Singapore government said it will not interfere in any decision that Singapore Airlines Ltd. makes in Air India Ltd., which is said to be seeking financial aid from its shareholders.
Singapore Air has the responsibility to “assess its investments in Air India in relation to the resources it has for the long-term growth and profitability of the company,” Senior Minister K Shanmugam told reporters on Saturday. It’s the Singapore government’s principle to not intervene in individual investment decisions, or put political pressure, he said.
“Once governments or politicians start directing individual investment decisions, commercial discipline will be compromised,” according to a transcript of his comments. “Decisions will become politicized — shaped by political considerations, rather than commercial judgment. In the end, Singaporeans will bear the cost.”
Air India is close to securing 100 billion rupees ($1.1 billion) in aid from its owners Tata Sons Pvt. and Singapore Air, as the carrier grapples with the fallout from a turbulent year, people familiar with the matter told Bloomberg this week. The money is conditional on reaching certain performance milestones and will be paid out in installments, said the people.
The support would be proportional to shareholding, the people said, with Tata Sons owning 74.9% of Air India and Singapore Air the remainder. India’s flag carrier is coming off a difficult period marked by the deadly crash of a Boeing Co. 787 Dreamliner, the closing of Pakistani airspace to Indian carriers, and the Middle East conflict that’s disrupted travel and driven up fuel costs.
“We should leave it to SIA to decide what it does with its investments,” Shanmugam said. “Of course, SIA shareholders, as well as the broader public, have a right to expect that SIA will be accountable and transparent. People have a right to expect that there will be a rigorous assessment before money is committed.”
The minister also said that Temasek Holdings Pte – which is the majority owner of Singapore Air — does not account to the government for its individual investments or the investment decisions of its portfolio companies. Last month, Temasek said it takes a long-term perspective and is supportive of Singapore Air’s business strategy on India.
“Temasek and its subsidiaries decide how to invest across a wide portfolio with investments of varied risks and varied time horizons,” Shanmugam said. “Temasek is accountable to the government for its overall portfolio and its overall long-term performance.”
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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