Data on Directors' Debarment, Unfit Conduct Reports and Insolvent Liquidation Since 2021

Parliamentary Question by Mr Kenneth Tiong Boon Kiat:

To ask the Prime Minister and Minister for Finance regarding the Companies Act 1967 (a) how many persons were disqualified or debarred as directors annually since 2021, by provision; (b) how many section 149 reports of unfit conduct were made to the Minister; and (c) whether section 155A, which disqualifies directors of three dormant companies struck off the register, will be extended to directors of companies that have gone into insolvent liquidation.

Parliamentary Reply by Second Minister for Finance, Mr Jeffrey Siow:

From 2021 to 2025, an average of around 230 persons each year were disqualified or debarred from acting as directors as a result of regulatory action by the Accounting and Corporate Regulatory Authority (ACRA).

Section 155A of the Companies Act disqualifies a person who had been a director of three or more companies that had been struck off by the Registrar within a five-year period. This provision disqualifies directors who demonstrate a repeated pattern of failing to ensure that their companies meet statutory obligations, such as filing Annual Returns with ACRA.

Section 149 of the Companies Act provides for the disqualification of unfit directors of insolvent companies. No reports have been made to the Minister under this provision since 2021.

A company may become insolvent for a range of reasons, including business conditions beyond a director's control. Insolvency does not, by itself, indicate misconduct or a director being unfit to hold the position. Hence, a director is not automatically disqualified solely on the basis that their company entered insolvent liquidation. Section 149 provides for disqualification where the director’s conduct makes them unfit to manage a company. In such cases, the Court may, upon the application of the Minister or the Official Receiver, disqualify such a person from acting as a director for up to five years. This approach strikes a balance between entrepreneurial activity and protection of the public.