Disk-drive maker Datapulse Technology has been told by the Singapore Exchange (SGX) to appoint independent professionals to review its internal controls and corporate governance practices.
It has until March 9 to do so, the SGX said yesterday. The directive comes as the group reshuffled its board of directors and diversified its business.
The SGX noted that four new directors were appointed on Dec 11, one day after all three independent directors resigned. Also, two executive directors resigned on Dec 11, which was followed by the resignation of the firm's remaining executive director of the previous board on Dec 26.
On Dec 12, Datapulse announced that it had entered into a sale and purchase agreement to acquire Wayco Manufacturing, a personal care product firm under businessman Ang Kong Meng's Way Company.
The fresh set of directors that came onboard approved the acquisition and later disclosed that "extensive due diligence" was not carried out for the Wayco deal. It has since emerged that Datapulse's new controlling shareholder, Ms Ng Siew Hong, had prior ties to Mr Ang. Ms Ng put board members in touch with Mr Ang before their appointment.
The newly appointed board is facing off against company co-founder Ng Khim Guan's family over the acquisition of Wayco. The Ngs are also seeking to overthrow the board and halt Datapulse's business diversification.
Among other things, the SGX noted that an issuer should have a "robust and effective system of internal controls, addressing financial, operational and compliance risks" according to its listing rules.
It is requesting Datapulse undertake an independent review that will determine the facts and circumstances surrounding the new board's approval for the Wayco acquisition. It will also review the adequacy of the firm's internal policies and processes related to the evaluation, and approval of mergers and acquisitions, or conflicts of interest.
The SGX is requesting as well that the independent reviewer audit Datapulse's processes relating to its board appointment and nomination by shareholders, and make recommendations on how to improve its internal controls and corporate governance practices. The exchange also noted that failure to comply with these requirements will be deemed a contravention of the listing rules.
Separately, Datapulse said on Thursday that Mr Wilson Teng Wai Leung will join as CEO on March 8, just weeks after former CEO Kee Swee Ann quit abruptly. Mr Teng has been vice-president of sales and business development at Hong Kong data centre service provider iAdvantage since June 2016.