SingPost corporate governance: Regulator probing possible breaches

Director Keith Tay resigned after the release of the special audit report.
Director Keith Tay resigned after the release of the special audit report.

Singapore's companies regulator is investigating possible breaches of the Companies Act uncovered in a recent special audit of Singapore Post's corporate governance.

SingPost said yesterday that it was required to furnish the Accounting and Corporate Regulatory Authority (Acra) with its special audit report on Wednesday.

The company has disclosed the full findings of the corporate governance probe to Singapore Exchange (SGX) regulators but has not released it to the public.

Instead, it put out a 52-page executive summary of the report in an exchange filing on May 3.

An Acra spokesman said the agency "is unable to provide further comments as investigations are ongoing".

Yesterday's announcement was the latest development in an ongoing corporate governance saga.

SingPost sought the special audit last December after admitting to an "administrative oversight" in failing to disclose former lead independent director Keith Tay's interest in its 2014 acquisition of freight forwarder F.S. Mackenzie.

Mr Tay is chairman and a 34.5 per cent shareholder of Stirling Coleman, which arranged the deal on behalf of the seller of F.S. Mackenzie.

While the special auditors attributed this lapse and another to the carelessness of SingPost staff rather than intentional omissions, they also flagged potential breaches of the Companies Act in their report.

They said Mr Tay was "arguably in breach... of the Companies Act" for not declaring his interest in SingPost's 2013 acquisition of freight forwarder Famous Holdings "as soon as practicable". Stirling Coleman also advised the sellers on this deal.

The report also said Mr Tay might have breached some fiduciary duties relating to that deal, as well as to SingPost's acquisition of Famous Pacific Shipping last year.

Mr Tay resigned following the release of the special audit report.

TSMP Law Corporation joint managing director Thio Shen Yi, who is acting for Mr Tay, said: "One expects the relevant authorities to do their jobs so we consider the request from Acra for the full report to be relatively routine. We have not been contacted by any of the regulators. Keith is more than prepared to... address the issues arising from the report at the appropriate juncture if necessary."

Ms June Sim, SGX's head of listing compliance, said the bourse is reviewing the special auditors' findings and will determine the appropriate course of action. Ms Sim said the bourse has also directed SingPost to obtain independent confirmation on implementing the special auditors' recommendations.

Some investors felt the special auditors' report did not address all of their concerns. Corporate governance specialist and SingPost shareholder Mak Yuen Teen said he was not satisfied with the report's conclusion that Mr Tay's actions did not appear to have influenced the company's transactions, "because that is based on interviews with directors after the event".

SingPost shares closed 2.5 cents down at $1.55 yesterday.

A version of this article appeared in the print edition of The Straits Times on May 20, 2016, with the headline 'SingPost corporate governance: Regulator probing possible breaches'. Print Edition | Subscribe