SIX months after being arrested, former transport minister S Iswaran was on Thursday (Jan 18) hauled to court and charged with graft – the first time in nearly five decades that a key Singapore political office holder has faced such charges.

The 61-year-old faces 27 charges in total. These include two charges of corruption, for allegedly receiving more than S$384,000 worth of flights, hotel stays, tickets to shows, musicals and English Premier League matches, as well as Singapore Grand Prix tickets from property tycoon Ong Beng Seng.

Ong, a 79-year-old billionaire hotelier, controls Singapore GP, which has the rights to the Singapore Grand Prix. Iswaran is accused of obtaining said gifts from him in his capacity as chairperson of the F1 Steering Committee.

The former minister pleaded not guilty to all 27 charges on Thursday, adding in a statement that he is innocent, and will now focus on clearing his name. A pre-trial conference has been fixed on Mar 1.

After being notified of the charges, Iswaran resigned from his position as a Cabinet minister and a member of the ruling People’s Action Party (PAP). He also stepped down as Member of Parliament (MP) of West Coast Group Representation Constituency, where he was first elected in 1997.

Chee Hong Tat, who was acting transport minister during Iswaran’s leave of absence, will take on the role of transport minister. He will also be appointed second minister for finance. Minister for Sustainability and the Environment Grace Fu will take over Iswaran’s other portfolio as minister-in-charge of trade relations.

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In his resignation letters to Prime Minister Lee Hsien Loong, Iswaran said he would return all monies received by way of salary as minister and allowances as MP from when the Corrupt Practices Investigation Bureau (CPIB) probe began last July. He will also not seek the return of these monies “if, as I strongly believe, I am acquitted”.

After being placed on leave of absence, he had his monthly pay cut to S$8,500, though he continued to draw an MP allowance.

Iswaran said that he decided to return the monies as he believes it is the right thing to do. He wrote that “we cannot in all good conscience benefit from them when I was unable, on account of the investigations, to discharge my duties as a minister and Member of Parliament”.

In his reply, PM Lee said: “I am disappointed and saddened that you are leaving politics in these circumstances. But it is essential that I deal with such matters rigorously in accordance with the law.

“It is the right thing to do. We must uphold the integrity of the party and the government. I am sure you understand the importance of doing so. Singaporeans expect no less.”

Speaking to reporters, Deputy Prime Minister Lawrence Wong stressed that the PAP’s stance on corruption is “non-negotiable”.

“We cannot allow this political hit to compromise our zero-tolerance stance against corruption,” he said. “That is why the party, the government, will do the right thing and do everything we can to keep our system corruption-free.”

While there is “no doubt” that the news involving Iswaran will affect party morale, the incident will not derail the PAP’s leadership succession plans, which is still set to take place by November this year. “This plan remains on track,” said Wong.

Iswaran is out on S$800,000 bail and plans to defend himself against the charges.

As for billionaire hotelier Ong, the Attorney-General’s Chambers said it will make a decision about the investigations against him after the case against Iswaran is complete.

Agreements ‘considered carefully’

Responding to media queries, the Ministry of Trade and Industry (MTI) said in a statement that there is nothing to suggest, as of now, that the F1 Singapore Grand Prix or other contracts were structured to the disadvantage of the government.

Not only were the agreements “considered carefully” by the government, there was also an independent consultancy study, said MTI.

Noting that the F1 Grand Prix has benefited Singapore in terms of tourism arrivals and business opportunities, the ministry said all preparations for the 2024 edition of the race – scheduled for Sep 20 to 24 – are on track.

Analysts to whom The Business Times spoke agreed that the case against Iswaran is unlikely to have an impact on F1’s attractiveness to both tourists and businesses, as spectators are there for the entertainment value of the event.

“F1 fans are interested in the race and experience, not in the politics,” said Maybank regional co-head of macro research Chua Hak Bin. “Singapore has already established its mark as a unique and special F1 venue in the race calendar. The electrifying atmosphere, night race and large turnout is difficult to replicate anywhere else.”

Singapore Management University law don Eugene Tan agreed, saying: “Unless graft is affecting the ‘wow’ element and quality of the event, the corruption case against Iswaran will not move the needle at all.”

As for the case’s impact on politics, observers said the PAP’s reputation will take a hit – but the extent of the damage, and how it will impact the party’s chances at the upcoming general election (GE), is yet to be clear.

“Some of whether the Iswaran case will affect the GE depends on several things we do not yet know,” noted NUS associate professor of political science Chong Ja Ian.

“There is the information that comes up during the trial, how the PAP handles that information, and whether they make anti-corruption a theme in their campaign or choose to emphasise other issues,” he added.

Prof Tan pointed out that the ruling party was embroiled in other controversies last year as well, such as the resignations of former Speaker of Parliament Tan Chuan-Jin and former MP Cheng Li Hui over an extramarital affair.

That being said, the opposition is sure to use the incident to call on voters to elect more opposition MPs to strengthen governance in Singapore, said Prof Tan.

In particular, the Progress Singapore Party, which contested in West Coast GRC in the last GE, “will seek to make as much political hay as it can from this”, he added. West Coast was also the constituency which the PAP won by the slimmest margin during GE2020.

As for how the case would affect perceptions of how Singapore deals with corruption, Prof Chong noted that the fact that some allegations involved incidents which happened eight years ago and came to light only recently, “raise questions about the ability of mechanisms to monitor and restrain the behaviour of people in positions of authority and wealth”.

“It would also underscore the limitation of using high pay as a means to discourage corruption,” he said. “People can always demand more, and what they demand may be less material and more about status or other types of benefits.”

Any person convicted of a corruption offence under Singapore’s Prevention of Corruption Act may be fined up to S$100,000 or sentenced to imprisonment of up to seven years, or both.

Additional reporting by Elysia Tan