SINGAPORE - The Accounting and Corporate Regulatory Authority (Acra) is investigating possible breaches of the Companies Act by Singapore Post (SingPost), in the latest development in the firm's corporate governance saga.
In a filing to the Singapore Exchange (SGX) on Thursday morning (May 19), SingPost said Acra on May 18 asked for the joint special audit report on its corporate governance dated May 3 as the regulator "is commencing investigations into possible breaches of the Companies Act as highlighted in the report."
SingPost has released only a summary of its special audit report.
Drew & Napier and PricewaterhouseCoopers were appointed by SingPost to carried out the special audit after it emerged that board member Keith Tay was a shareholder and chairman of the financial adviser to three freight forwarders the postal-services provider bought in 2013, 2014 and 2015.
In their summary report, the auditors, found that Mr Tay was "arguably in breach of section 156(1) of the Companies Act" for not declaring his interest in the 2013 acquisition of Famous Holdings "as soon as practicable".
They said the failure to disclose Mr Tay's interest in the deal arranger "does not appear to have been deliberate or intended to conceal interest" and that the timing of the disclosures "would have made no difference".
But they also noted that SingPost has "no prescribed policy, process of procedure for the evaluation and approval of M&A transactions" besides the "broad internal guidelines" and "the work experience" of its mergers and acquisitions team.
Mr Tay resigned from his post as SingPost's lead independent director following the release of the special audit report.
In response to the audit report, SGX reiterated its guidelines that "the board of a company is ultimately responsible for the announcements made by the company and must not abdicate its responsibility to any professionals."
SingPost is also undertaking a corporate governance review that it expects to complete before the company's annual shareholders meeting scheduled in July.
Separately, corporate heavyweight Simon Israel took up the post of SingPost chairman last week, a move expected to lend stability to the firm, which was suffering from a leadership crisis.
Mr Israel, a former executive director and president of Temasek Holdings and current chairman of Singtel, took over from Mr Lim Ho Kee who stepped down last month.
SingPost is still looking to replace group CEO Wolfgang Baier, who resigned abruptly in December 2015.
The postal and logistics company last week posted a 57.9 per cent jump in its full-year net profit to a record S$248.9 million, boosted by massive one-off divestment gains. Underlying profit dipped 4.1 per cent. Fourth-quarter earnings jumped 196.4 per cent on-year to S$105.4 million. Excluding one-off items, Q4 net profit declined by 20.1 per cent.