Nanyang Polytechnic International Pte Ltd

Published Date: 15 August 2016 12:00 AM

News Parliamentary Replies

Name and Constituency of Member of Parliament

Dr Intan Azura Mokhtar, Ang Mo Kio GRC

Question

To ask the Acting Minister for Education (Higher Education and Skills) (a) what is the role of Nanyang Polytechnic International Pte Ltd and its relationship with Nanyang Polytechnic; and (b) how does the Ministry intend to address the findings of the Auditor-General in its Report for FY15/16.

Response

1. Receiving foreign visitors, and offering programmes to international participants, have been internal functions of Nanyang Polytechnic’s (NYP). In April 2007, NYP set up Nanyang Polytechnic International Pte Ltd (NYPi), to handle these activities. These are potential revenue generating activities, and though a subsidiary, NYP intends to make it a self-sustaining activity.

2. To ensure alignment between NYPi’s activities and NYP’s mission and objectives, selected board members and staff of NYP also serve as board members of NYPi. This reflects the intention of NYP to closely supervise and manage the activities of its fully owned subsidiary. There are two points I should highlight here:

3. First, NYPi is a fully-owned subsidiary of NYP, and hence it is not a third party vendor. The activities performed by NYPi are to fulfil the mission and objectives of NYP rather than NYPi’s own objectives. That is why it is fully owned by NYP, and profits made by NYPi, if any, ultimately belong to NYP. No profits flow out to any third party.

4. Second, the NYPi’s board directors do not receive any directors’ fees. And the NYPi staff does not partake in any profit sharing scheme. The audit observations of the Auditor-General FY15/16 report have no bearing on the remuneration or benefits of NYPi’s board directors and staff, and there is no question of any personal gain involved.

5. The mistake NYP made was to continue treating NYPi as if it was a division of NYP, when it is now a subsidiary. All rental and charges by NYP imposed on NYPi should have been based on market rates, or with subsidies explicitly approved and recorded in NYP’s accounts. NYP has taken immediate actions to put in place a proper governance framework to handle its transactions with NYPi.

6. I have to emphasize a key point in all of this, so that the AGO’s observations are not misunderstood. There were no personal interest involved on the part of the Directors of NYP and NYPi, and no leakage of money to any third parties.

7. When AGO referred to some NYP BOG members as having ‘vested interests’, it merely referred to the fact that they would have had an interest in ensuring NYPi performs well in NYP. It had nothing to do with them having any personal or financial interests in NYPi. And it was indeed in NYP’s interest that NYPi did well.

8. This is hence completely different from a situation where a director or staff of an entity has a stake in a third party vendor, and provides services to the entity for a fee.

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