SINGAPORE - The Singapore Exchange (SGX) has asked mainboard-listed disk-drive maker, Datapulse Technology, to appoint independent professionals to undertake a review of the company's internal controls and corporate governance practices, the bourse operator said in a statement on Friday (Feb 23).
Datapulse has until March 9 to do so.
This comes as the group reshuffled its board of directors and diversified its business immediately after.
The SGX noted that four new directors were appointed on Dec 11, one day after all three independent directors of the group's previous board resigned.
In addition, two executive directors similarly 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 last year, 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, Ng Siew Hong, who had prior ties to Mr Ang, put board members in touch with him before their appointment.
Among other things, the SGX highlighted that an issuer should have a "robust and effective system of internal controls, addressing financial, operational and compliance risks" according to its listing rules.
Therefore, it is requesting Datapulse to undertake an independent review that will determine the facts and circumstances surrounding the new board's approval for its Wayco acquisition; as well as to 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.
In addition, the SGX is requesting that the independent reviewer audit Datapulse's processes relating to its board appointment and nomination by shareholders; and make recommendations accordingly on how to improve its internal controls and corporate governance practices.
The exchange also noted that failure to comply with these requirements shall be deemed a contravention of the listing rules, and that the independent reviewer should report its findings to the bourse, and Datapulse's audit committee.
Separately, Datapulse on Thursday announced that an executive from Hong Kong, Wilson Teng Wai Leung, will join the group as chief executive officer (CEO) just weeks after former CEO Kee Swee Ann quit abruptly.
Mr Kee was appointed last December, but left the company on Feb 2, citing "recent events surrounding the company" as the reason for leaving.
Meanwhile, Datapulse chief financial officer Lee Kam Seng has been serving as interim CEO.
Mr Teng will serve as the group's executive director and CEO from March 8 onwards. He has been vice-president of sales and business development at Hong Kong data centre service provider, iAdvantage, since June 2016.
Now, the newly appointed board is facing off company co-founder Ng Khim Guan's family over the acquisition of Wayco. Additionally, the Ngs are seeking to overthrow the board, and halt Datapulse's business diversification.
As at 1.50pm on Friday, shares in Datapulse were trading 3.2 per cent, or one Singapore cent higher at 32.5 Singapore cents.