SINGAPORE: Reform Party Secretary—General Kenneth Jeyaretnam is proceeding with his legal bid to stop Singapore’s US$4—billion pledge to the International Monetary Fund.
His case was heard in the High Court chambers in a pre—trial conference on Tuesday morning.
In April, Singapore made the pledge to bolster the International Monetary Fund’s war chest, as emerging economies responded to a request by IMF chief Christine Lagarde for at least US$400 billion in new money to draw a line under the euro zone debt crisis.
The loan will be part of the Official Foreign Reserves (OFR) held by the MAS.
Mr Jeyaretnam said he filed an application, in his private capacity as a citizen, for a quashing order on 6 July.
He contends that the loan violates the Constitution of Singapore under Article 144, as no prior approval for the pledge was sought in Parliament or from the president.
Among other things, Article 144 states that "no guarantee or loan shall be given or raised by the Government except under the authority of any resolution of Parliament with which the President concurs".
The Monetary Authority of Singapore had previously responded to the issue, stating that Article 144 "does not apply to lending by Government" but "prevents the Government from borrowing without the authority of Parliament and the President’s concurrence".
Article 144 was enacted "to prevent a profligate Government from borrowing" to fund its spending and putting past reserves at risk.
State Counsel Aedit Abdullah has until August 1 to submit his responses, following which, Mr Jeyaretnam’s counsels —— Louis Joseph and M Ravi —— have two weeks to respond.
The case will be heard again in chambers on August 21.
Following the Tuesday’s hearing, lawyer M Ravi said he has instructed lawyers in New York to take out an injunction in the US courts to "freeze the IMF account in relation to the Singapore pledge".
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