Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support

Debated in Parliament on 15 Aug 2016.

Summary written by AI (learn more)

Leon Perera questioned MDA's due diligence and oversight in providing $15 million in financial support to RGM Entertainment and RGM Group in 2010 and 2011, asking about processes, lapses, and subsequent improvements.
MDA checked RGM's track record, projected returns, and co-investment partners before investing, but in 2011, it discovered difficulties in recovering funds and suspected wrongdoing, leading to reports to CAD and legal action.
CAD found RGM's principal forged bank statements to hide missing funds, resulting in criminal charges, a jail sentence, and the winding up of RGM entities.
Following the incident, MDA discontinued equity co-investments due to complexity and risk, shifting to a grant-based model with disbursement tied to project deliverables and enhanced governance measures.
MDA strengthened oversight by tightening grant criteria, implementing an online grant management system, commissioning direct project audits, and establishing whistle-blowing hotlines for reporting potential wrongdoing.

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Leon Perera

Mr Leon Perera asked the Minister for Communications and Information (a) what due diligence and oversight processes have been exercised by MDA prior to it providing financial support to RGM Entertainment and RGM Group in 2010 and 2011; (b) what lapses occurred in MDA's due diligence and oversight processes in this case, if any; and (c) what measures has MDA since taken to strengthen its due diligence and oversight mechanisms in making such awards.

Assoc Prof Dr Yaacob Ibrahim

In 2010 and 2011, the Media Development Authority (MDA) invested $15 million in RGM Entertainment and RGM Group to position Singapore as a media financing and production hub.

Before proceeding with the investments, MDA checked RGM's track record, assessed the projected returns and examined the backgrounds of other co-investment partners.

However, in 2011, MDA had difficulty recovering its funds from RGM and suspected wrongdoing on the part of the company. MDA immediately reported the matter to the Commercial Affairs Department (CAD) and commenced legal action to recover the monies owed. After investigating the matter, CAD found that RGM's principal, Devesh Chetty, had forged bank statements to hide MDA's missing funds. In June 2016, CAD brought criminal charges against Chetty, who was found guilty of forgery and sentenced to 22 weeks' jail. The RGM entities were also wound up by the High Court.

Following a review of the incident, MDA no longer enters into such equity co-investments, given their inherently more complex nature and higher risks. Instead, MDA has moved to a grant-based model where money is disbursed only after clearly defined project deliverables are achieved. MDA has also instituted additional governance measures, such as tightening the qualifying criteria for grants, implementing an online grant management system to improve the audit trail and commissioning project audits directly instead of through the grant recipients. In addition, MDA has implemented whistle-blowing hotlines for anyone to report potential wrongdoing to MDA.

Summary written by AI (learn more)

Leon Perera questioned MDA's due diligence and oversight in providing $15 million in financial support to RGM Entertainment and RGM Group in 2010 and 2011, asking about processes, lapses, and subsequent improvements.
MDA checked RGM's track record, projected returns, and co-investment partners before investing, but in 2011, it discovered difficulties in recovering funds and suspected wrongdoing, leading to reports to CAD and legal action.
CAD found RGM's principal forged bank statements to hide missing funds, resulting in criminal charges, a jail sentence, and the winding up of RGM entities.
Following the incident, MDA discontinued equity co-investments due to complexity and risk, shifting to a grant-based model with disbursement tied to project deliverables and enhanced governance measures.
MDA strengthened oversight by tightening grant criteria, implementing an online grant management system, commissioning direct project audits, and establishing whistle-blowing hotlines for reporting potential wrongdoing.

Questions identified by AI (learn more)

Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support | PAPERCUTS

Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support

Debated in Parliament on 15 Aug 2016.

Summary written by AI (learn more)

Leon Perera questioned MDA's due diligence and oversight in providing $15 million in financial support to RGM Entertainment and RGM Group in 2010 and 2011, asking about processes, lapses, and subsequent improvements.
MDA checked RGM's track record, projected returns, and co-investment partners before investing, but in 2011, it discovered difficulties in recovering funds and suspected wrongdoing, leading to reports to CAD and legal action.
CAD found RGM's principal forged bank statements to hide missing funds, resulting in criminal charges, a jail sentence, and the winding up of RGM entities.
Following the incident, MDA discontinued equity co-investments due to complexity and risk, shifting to a grant-based model with disbursement tied to project deliverables and enhanced governance measures.
MDA strengthened oversight by tightening grant criteria, implementing an online grant management system, commissioning direct project audits, and establishing whistle-blowing hotlines for reporting potential wrongdoing.

Questions identified by AI (learn more)

Full Transcript

Leon Perera

Assoc Prof Dr Yaacob Ibrahim

In 2010 and 2011, the Media Development Authority (MDA) invested $15 million in RGM Entertainment and RGM Group to position Singapore as a media financing and production hub.

Before proceeding with the investments, MDA checked RGM's track record, assessed the projected returns and examined the backgrounds of other co-investment partners.

Summary written by AI (learn more)

Leon Perera questioned MDA's due diligence and oversight in providing $15 million in financial support to RGM Entertainment and RGM Group in 2010 and 2011, asking about processes, lapses, and subsequent improvements.
MDA checked RGM's track record, projected returns, and co-investment partners before investing, but in 2011, it discovered difficulties in recovering funds and suspected wrongdoing, leading to reports to CAD and legal action.
CAD found RGM's principal forged bank statements to hide missing funds, resulting in criminal charges, a jail sentence, and the winding up of RGM entities.
Following the incident, MDA discontinued equity co-investments due to complexity and risk, shifting to a grant-based model with disbursement tied to project deliverables and enhanced governance measures.
MDA strengthened oversight by tightening grant criteria, implementing an online grant management system, commissioning direct project audits, and establishing whistle-blowing hotlines for reporting potential wrongdoing.

Questions identified by AI (learn more)

Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support

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Leon Perera

Assoc Prof Dr Yaacob Ibrahim

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Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support

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Questions Identified

Full Transcript

Leon Perera

Assoc Prof Dr Yaacob Ibrahim

Summary

Questions Identified