SINGAPORE - The former board of directors of Singapore Post did not fully consider certain key risks before signing off on the postal service provider's largest acquisition, an independent review has found.

In particular, information relating to certain key risks identified in the course of due diligence and the valuation of TradeGlobal - the loss-making United States e-commerce business that SingPost acquired for US$168.5 million (S$236 million) in October 2015 - was not raised to the board before it approved the acquisition, a report from SingPost's legal counsel has found.

One key risk was that the same business which was sold to SingPost was purchased by the seller, private equity fund Bregal Sagemount, in 2013 at a significantly lower price.

In fact, this price was not made known to the SingPost management until one week before SingPost completed the acquisition on October 15, 2015, said the report, authored by WongPartnership and filed with the Singapore Exchange late on Monday night (July 17).

Second, the earnings and revenue forecasts upon which the TradeGlobal valuation was based were aggressive and may have been over-optimistic, said the report.

This information could have been presented to the board in a fairer manner where both positive and negative points were highlighted, it added.

The question of whether SingPost may have overpaid for TradeGlobal has long been a sore point for its shareholders.

At first, SingPost stuck to its guns.

Then in May this year, it said it would take a whopping $185 million impairment for TradeGlobal, admitting that the business has "underperformed". In March, it hired FTI Consulting to assess the adequacy of due diligence performed in relation to the TradeGlobal deal.

Meanwhile, WongP was asked by the new board to conduct a review of the circumstances surrounding its predecessor's decision to acquire TradeGlobal.

The full report is not out yet, but in an update report out Monday, WongP said the "asymmetrical flow on information" to the board resulted in its oversight.

Notably, although Bregal Sagemount's purchase of TradeGlobal in 2013 was listed as a comparable transaction in the appendix to a Sept 23 board paper, the figures there were all stated as "N.A.".

A copy of the papers setting out Bregal's purchase price was sent to SingPost on Oct 8, one week before SingPost signed the sale and purchase agreement on Oct 15, seemingly without making further due diligence inquiries.

Another troubling point raised by WongP was that the commercial due diligence was neither fully carried out nor fully documented.

For instance, a more detailed review of TradeGlobal's performance in 2013 and 2014 may have revealed that its main operating subsidiary had significantly underperformed its forecasts in those years, WongP said.

Despite this, the valuations presented to the board were based only on forecasts, and no valuations based on historical multiples were presented.

The review uncovered other problems with SingPost's corporate governance as well.

"We have observed instances of possible over-stepping of directorial stewardship role in Project Titan (the TradeGlobal acquisition). This would have had the effect of blurring the roles between the non-executive directors... and rendering the system of checks and balances between the non-executive directors and management less effective," wrote WongP. It did did not name any of these non-executive directors.

Another problem was that there was no clear leader or team structure within the project management team.

"Such a lack of clarity in the team structure was evidenced by the fact that there are varying accounts as to who was actually leading the project management team. This led to a certain lack of ownership and accountability in respect of the TG acquisition," wrote WongP.

WongP noted that SingPost has since taken steps to improve corporate governance, including reconstituting the board's executive committee and laying out clearer policies and standards.

Nevertheless, WongP has recommended that SingPost provide a full copy of its report, when issued, to the relevant regulatory authorities. SingPost has agreed to this.SingPost shares fell two cents or 1.46 per cent to $1.35 on Tuesday.

Asked if it would take steps to go after the previous management or board members, SingPost declined comment.