Proposed bar 'will not shrink pool' of eligible private sector candidates
SINGAPORE'S economic growth over the years has produced a large number of big companies, so much so that changing the threshold of a company's size will not shrink the pool of eligible candidates, said the report on the elected presidency review.
It was addressing a key concern raised by people who made submissions to it. They said too high a bar may limit the pool of candidates.
But the proposed threshold for private-sector candidates is to have the experience of running a company with at least $500 million in shareholders' equity, which refers to a company's total assets less its total liabilities.
This threshold "is not so high as to dramatically shrink the pool of potentially qualified persons", the Constitutional Commission said.
The current threshold is $100 million in paid-up capital, which is the amount of money a company had received from investors who bought its shares.
The report, released yesterday, noted that more companies today can meet the proposed threshold of $500 million in shareholders' equity than the number that met the current requirement established in 1993, shortly after the elected presidency was introduced.
Explaining why the current threshold may no longer be appropriate, the report said the Singapore economy has grown significantly since 1993.
"Not all the companies with a paid-up capital of $100 million would have the size or complexity that companies which satisfied the threshold in 1991 did,'' it added.
An estimated 158 Singapore-incorporated companies met the $100 million paid-up capital criterion in 1993.
These were the top 0.2 per cent of the 80,000 Singapore companies then.
In comparison, there were 691 Singapore companies with shareholders' equity at or exceeding $500 million in March this year, according to Accounting and Corporate Regulatory Authority (Acra) figures.
This is about 0.23 per cent of all Singapore-incorporated companies. The actual number is likely to be higher because about 80 per cent of companies do not file their financial statements with Acra.
Also, there may be companies that do not meet the existing threshold because their paid-up capital is below $100 million, but may satisfy the proposed $500 million shareholders' equity cut-off.
In March this year, there were 94 public-listed companies that met or exceeded the proposed threshold.
The companies include Singapore Post, property developers Frasers Centrepoint, City Developments Limited and CapitaLand, and local banks DBS Bank, United Overseas Bank and OCBC Bank.