Singapore-listed First Ship Lease (FSL) Trust has been rocked by grim developments on two fronts.
First, the chief executive of the trust manager, Mr Alan Hatton, has quit abruptly after being confronted by the FSL Trust Management board over potential misconduct and breach of duties.
Second, the shipping trust issued a profit warning yesterday, cautioning that impairment provisions on vessels and a loss on the disposal of two vessels would result in a "significant net loss" for the year ended last Dec 31.
The news sent FSL units tumbling 1.7 cents or 10.97 per cent to 13.8 cents.
Mr Hatton, 39, resigned as CEO last Thursday in response to a "show cause notice" and allegations that he had set up another shipping firm, Lionwharf, for which he gave services and received remuneration without board authorisation, the trust manager said yesterday.
In a statement to the Singapore Exchange, the FSL board said Mr Hatton "had increasingly displayed antagonistic behaviour towards board members who he considered were not aligned to him", as well as "displayed resistance" to the appointment of a chief financial officer and deputy CEO.
Mr Hatton was "Young Person of the Year" at the Seatrade Maritime Awards Asia last year, for steering the financially troubled trust to profitability after taking charge in August 2013, and helping FSL's unit price double in that period.
In a statement to the Singapore Exchange, the FSL Trust Management board said Mr Hatton "had increasingly displayed antagonistic behaviour towards board members who he considered were not aligned to him", as well as "displayed resistance" to the appointment of a chief financial officer (CFO) and deputy CEO.
FSL Trust Management had operated without a CFO since November 2014. Deputy CEO Roger Woods has been promoted to acting CEO in place of Mr Hatton.
FSL Trust Management said Mr Hatton had argued that the board was trying to take more control of executive functions, rather than focusing on refinancing plans, and was rejecting viable refinancing plans. He felt it was "unusual" for the CFO to report to the board and the chairman of the audit and risk committee, as well as to non-independent chairman Tim Reid.
The board said: "The reason why the CFO additionally reported to the chairman of the board was because of concerns over Mr Hatton's conduct... To the extent that he was not involved in certain deliberations, the two appointments were made arising from concerns about corporate governance and Mr Hatton's actions."
It said other documents were later found after Mr Hatton was issued the show cause notice, "despite the fact that computer files from his company-owned computer had been deleted".
"These documents show Mr Hatton had been acting in furtherance of his own agenda," the board said.
Mr Hatton's is the third high-level departure from FSL Trust Management in five months.
Last September, Mr Esben Poulsson resigned as independent director, citing strong disagreement between himself, Mr Reid and other board members over process in HR matters.
Then in November, Mr Simon Davidson resigned as independent director, citing unhappiness over what he perceived as haste in the appointment of the new CFO.
But lead independent director Michael Gray, who chairs the audit and risk committee, told The Straits Times: "The process was perfectly in order. I gave all the other directors the opportunity to interview the new CFO and his appointment was passed by a majority vote at a formal board meeting."
FSL will release its full-year results on or before Feb 23.
The manager said the trust would continue to generate positive cash flow and income available for distribution, despite reporting an accounting loss.