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Why Air India's financing call has been scrutinized by Singapore politicians

Air India's request to its owners, Tata Sons and Singapore Airlines, for $1.5 billion has sparked debate in Singapore about the exposure of state investor Temasek to Indian carrier.

A government minister stated that the news of the funding request had led to anti-Indian abuse on the internet, and asked the police to investigate the comments.

Here are some key facts

AIR INDIA REQUEST FOR FUNDING

Air India approached India's Tata Group as well as Singapore Airlines to discuss equity funding. This comes after Air India and its budget airline posted a record-breaking annual loss of 2,33 billion dollars last month.

Singapore Airlines, which is majority owned by Temasek (a state-owned investor), holds 25,1% of Air India. It has also taken a share of Air India's losses.

Why has the request sparked political scrutiny?

In a post on social media, opposition Workers' Party legislator Kenneth Tiong stated that Temasek's money should not be used for Air India via Singapore Airlines.

Singaporeans are indirectly shareholders in the flag airline because Temasek manages and owns its assets, and its reserves are part of Singapore's national reserve, according to Tiong.

Singapore Airlines was defended by the government in a strong manner in Tuesday's debate in Parliament.

Transport Minister Jeffrey Siow stated that investment decisions belong to the board of Singapore Airlines and that Singaporeans are not paying for Air India's investment. Siow said that Singapore Airlines has not asked for additional capital from its shareholders.

Air India and Tata did not publicly comment on the funding request.

WHAT HAS TEMASEK AIRLINES AND SINGAPORE RAILWAYS DONE?

Temasek said that it views the investment of Singapore Airlines in Air India as a long-term one and has supported it.

Singapore Airlines said on Tuesday that it will continue to fund its investments in India 'through internal resources and subject to board approval, and within a disciplined framework for capital allocation. The?stake was described as a strategic long-term?commitment in line with the multi-hub strategy.

Why has it been racist abuse?

Senior Minister K. Shanmugam stated over the weekend, that the news of the funding request had prompted anti-Indian abuse on the internet. This included suggestions that Temasek Chief Executive Dilhan Pillay Sandrasegara preferred?Air India due to his Indian ethnicity. Shanmugam described such remarks as libellous, and said that the CEO is as Singaporean as any other.

Temasek didn't respond to a comment request.

Shanmugam said he asked the police to investigate those 'comments and separate comments about Singaporeans who were missing in flash flooding abroad.

Prime Minister Lawrence Wong also condemned this abuse and said that seemingly valid arguments should not cover prejudice or hostility against foreigners.

(source: Reuters)