SingPost appoints PwC for investigations

SingPost chose PwC as it had "no conflict of interest that would impair its ability to discharge its professional responsibilities".
SingPost chose PwC as it had "no conflict of interest that would impair its ability to discharge its professional responsibilities".ST FILE PHOTO

Special audit centres on a director's interest in SingPost's acquisition of stakes in 3 firms

Singapore Post has appointed PricewaterhouseCoopers (PwC) to investigate corporate governance concerns relating to an independent director's interest in three recent transactions.

The special audit will centre on the interest of SingPost director Keith Tay Ah Kee in the group's acquisition of stakes in three firms: Famous Holdings, FS Mackenzie and Famous Pacific Shipping (NZ).

PwC will review whether the acquisitions complied with SingPost's internal policies and procedures - including those related to M&A transactions and conflicts of interest.

SingPost said in its statement that it picked PwC as it had "no conflict of interest that would impair its ability to discharge its professional responsibilities".

It added: "As an added measure to ensure independence of advice, the company has required that no partner or auditor of the special auditor who has performed an audit or acted as consultant to the company shall be involved in this."

SingPost will also conduct a corporate governance review, including looking at issues relating to the independence of its directors.

Mr Soo Nam Chow, chairman of the firm's audit committee, will lead the special audit and the corporate governance review.

SingPost director Low Teck Seng said yesterday: "We want to give shareholders certainty over the issues raised."

The firm is still seeking an independent consulting firm to undertake the review and provide a report on potential areas for improvement.

Conflict of interest concerns arose after it was disclosed that corporate finance advisory firm Stirling Coleman Capital arranged all three stake acquisitions, and was the financial adviser to the seller for the FS Mackenzie and Famous Pacific transactions.

SingPost told the Singapore Exchange (SGX) Mr Tay had disclosed his interest in the FS Mackenzie deal and abstained from voting when the board approved it in July last year. But its announcement to the SGX last July said none of its directors had any interest in its purchase of FS Mackenzie. It acknowledged last month that this was an "administrative oversight".

PwC will review whether the relevant processes were followed regarding the acquisitions and why there was no disclosure of Mr Tay's interest in the SGX announcement.

It will also look at whether Mr Tay had disclosed his interests in the acquisitions, whether he abstained from voting on them and if he recused himself from deliberations.

It will also determine if the board adhered to its legal obligations and the company's procedures relating to conflicts of interest in the deals.

Meanwhile, Mr David Gerald, chief executive of the Securities Investors Association (Singapore), met SingPost management yesterday to present the concerns of the firm's 28,000 retail investors.

He asked why the firm called for a special audit without clarifying what was wrong and questioned the abrupt departure of former CEO Wolfgang Baier.

Mr Soo said some of the questions Sias raised will be dealt with in the special audit and in the corporate governance review.

A version of this article appeared in the print edition of The Straits Times on January 20, 2016, with the headline 'SingPost appoints PwC for investigations'. Print Edition | Subscribe