The board of directors at beleaguered firm Axington has been reduced to a shell after a string of abrupt resignations over recent days, including that of Chinese gem merchant Evangeline Shen.
Ms Shen, Axington's non-independent non-executive chairman, is linked to a company that doctored images of the co-founders with former United States president Barack Obama.
Axington, a Catalist-listed professional advisory services firm, now has just two independent directors after Ms Shen and three others quit in recent days - news the company revealed in four filings with the Singapore Exchange (SGX) after midnight on Monday.
The resignations cap a tumultuous week for Axington and the Singapore-registered Bellagraph Nova (BN) Group, which has drawn intense scrutiny following news of its takeover bid for English Premier League club Newcastle United.
The BN Group was founded by Ms Shen and her Singaporean business partners Terence Loh, 42, and Nelson Loh, 40, who are cousins. The Lohs are Axington's controlling shareholders.
BN Group's ambitious bid soured quickly after the Obama photo scandal broke and inconsistencies in publicity materials surfaced.
The disclosures prompted the SGX's regulatory arm to call on Aug 24 for Axington's Catalist sponsor, Novus Corporate Finance, to assess the board members for their "experience, expertise, character and integrity".
A day later, former US ambassador to Singapore Kirk Wagar told The Straits Times that he had quit as an independent director.
Trading of the counter was halted after this. An extraordinary general meeting (EGM) scheduled for last Thursday was also postponed, as more revelations about inconsistencies continued to surface and individuals and organisations either denied links or distanced themselves from the BN Group.
Yesterday's filings said Axington's executive director Marjory Loh and non-independent non-executive director Michael Wong Soon Yuh resigned on Aug 28.
Ms Shen, 32, followed on Aug 30 alongside lead independent director Alex Chua Siong Kiat.
STEPPING DOWN FROM THE BOARD
Four board members of Catalist-listed Axington, a professional advisory services firm, quit in recent days.
This follows the resignation of former United States ambassador to Singapore Kirk Wagar last week as an independent director.
The five resignations leave Axington's board with just two members.
The company came under the spotlight over the past week for its links to the Bellagraph Nova (BN) Group, which made a bid for English Premier League football club Newcastle United.
MS EVANGELINE SHEN, ALSO KNOWN AS SHEN CHE
Ms Shen, 32, was the non-independent non-executive chairman.
The Singapore Exchange (SGX) filing said she is resigning as a result of strategic changes that are expected to be made in the company. She is also the co-founder of the BN Group.
Ms Shen is a Chinese jewellery merchant who studied law and worked as an investment banker.
MS MARJORY LOH
Ms Loh, 37, was the executive director. She is the sister of Mr Terence Loh and cousin of Mr Nelson Loh, both co-founders of the BN Group and Axington's controlling shareholders.
The SGX filing stated that Ms Loh is resigning due to "recent intense public scrutiny" of the company and added that she feels it is in the firm's best interest for her to step down.
MR WONG SOON YUH
Mr Wong, 41, was the non-independent non-executive director.
He is also named as Michael Wong in the leadership team for NETX, which was the proposed name change for Axington.
He resigned due to the impending changes in the firm's business strategy. More details will be disclosed once the board has received clarity from the firm's controlling shareholders.
MR CHUA SIONG KIAT
Mr Chua, 49, was the lead independent director.
He was also named on the NETX website, which is no longer accessible, as Alex Chua.
He resigned due to health reasons, the SGX filing said.
The reasons given ranged from impending changes in the company's business to "intense public scrutiny" and "health reasons".
Ms Shen, Ms Loh, Mr Chua, Mr Wong and two other independent directors - Mr Daryl Low Junrui and Mr Roberto Dona - were appointed to the board on July 14.
NOT RIGHT MOVE
Board members should not simply quit at the first sign of potential trouble. Directors owe a fiduciary duty to the shareholders and to the market.
GIBSON DUNN PARTNER ROBSON LEE, on the string of abrupt resignations from Axington's board in recent days.
This followed Axington's takeover by the Loh cousins.
The five resignations leave Axington's board with just Mr Low and Mr Dona. Mr Low is chief executive and director of Hydra X, claimed by BN Group to be one of its 31 subsidiaries. Mr Dona is the associate dean for professional engagement at Xi'an-Jiaotong Liverpool University.
The departures raised questions over whether the company is trying to avoid further scrutiny on the suitability of its board, observers say.
"Board members should not simply quit at the first sign of potential trouble. Directors owe a fiduciary duty to the shareholders and to the market," said Gibson Dunn partner Robson Lee.
Some lawyers noted that the Axington board now has insufficient members to form a proper audit committee. Catalist rules state that if a resignation renders the audit committee unable to meet the minimum number - no fewer than three - then the firm must fill the vacancies within three months.
An SGX spokesman said: "Catalist rules do not prohibit the resignation of directors as long as the cessation is announced in a timely and compliant manner.
"Axington has made disclosures, including announcing that exit interviews have been done per Catalist rule requirements. It has also disclosed that its board is reviewing its composition to ensure compliance with the rules."
Corporate governance advocate and National University of Singapore (NUS) Business School associate professor Mak Yuen Teen was not surprised by the resignations.
"(Ms Shen) should go, given the connections with the Loh (cousins) and the questions surrounding them," he said.
He added that there has been poor corporate governance in this case, with questions about the character and integrity of those in control.
NUS associate professor Lawrence Loh pointed to Axington's postponed EGM and noted that the Loh cousins still own a super-majority stake in the company and can technically push any resolution through.
"The crux of the matter is therefore one of minority shareholder protection," said Prof Loh, who is also director of the Centre for Governance, Institutions and Organisations.
"The sponsor will have the responsibility to ensure that company affairs are conducted in the interests of... the 200 public shareholders which collectively hold about 22 per cent of the stock."