Money politics has always been synonymous with South-East Asian governments. Whether allegations are true or not, any hint of it will likely be believed.
Needing to stand apart from our competitors in the region, Singapore has always gone out of its way to be a clean and efficient government. This adherence to the rule of law and the uncompromising emphasis on transparency of process is the primary reason Singapore has succeeded well ahead of our region's counterpart. Roy Ngerng's allegation that PM Lee had misappropriated money from CPF funds invested in our sovereign wealth fund was therefore an attack on the very basis of Singapore's success. Such an allegation cannot go unchallenged as any hint of an unclean government would impact Singapore and Singaporeans.
A case in point being PM Najib's current political troubles where he had been accused of siphoning 940 million into his own account. PM Najib had chosen to remain silent and his act of not resisting has only spurred his detractors on to say that it must be true hence his silence. This scenario would not be different for PM Lee. If PM Lee Hsien Loong had chosen to turn the other cheek, opposition members like Kenneth Jeyaretnam, Chee Soon Juan and Low Thia Khiang would have jumped on the bandwagon and Singaporeans (and would be investors) would then assume that PM Lee was guilty.
At the end of the day, perception is reality. Hence, politicians like Lee Kuan Yew, Goh Chok Tong and PM Lee Hsein Loong have no choice but to pursue legal actions to protect their reputation. Failing to sue, is an admission of guilt. In fact, opposition members like Ravi Philemon, Goh Meng Seng and even Vincent Law have resorted to threats of legal actions to defend their reputation.