Minority shareholders question OCBC CEO Helen Wong’s re-election as director of Great Eastern

SINGAPORE - Tensions surfaced at Great Eastern’s (GE) annual general meeting (AGM) on April 14 when minority shareholders questioned the re-election of OCBC Bank chief executive Helen Wong to the insurer’s board, amid the bank’s ongoing efforts to take GE private.

At the AGM, minority shareholders referred to a Jan 24 Bloomberg report that cited people with knowledge of the matter as saying that Ms Wong had personally met several GE shareholders to convince them to sell their shares to OCBC. The report was also

published in The Straits Times.

She reportedly met long-time GE shareholders Wong Hong Sun and his brother Hong Yen, as well as representatives of Mr Lee Thor Seng and his family, to persuade them to support the bank’s attempt to buy up all the shares in GE that it does not own.

The Lee family and Wong siblings collectively hold a 3 per cent stake in the insurer.

Minority shareholders pressed the board to confirm whether Ms Wong had disclosed these meetings and if the board had verified the accuracy of the Bloomberg report.

GE chairman Soon Tit Koon responded that Ms Wong had not informed the board about the meetings, which she had conducted in her capacity as OCBC CEO.

The board also did not verify the report with Ms Wong.

“The board does not feel it is our responsibility to verify media reports,” Mr Soon said.

He also said the board does not interfere with Ms Wong’s work as CEO of OCBC, but emphasised that should any material issues affecting GE have surfaced, Ms Wong would be expected to bring those issues to the board.

“It is not for the GE board to ask a director, who happens to be a CEO of a bank, concerning meetings that she might have conducted,” he said.

“From the board’s perspective, Ms Wong is well aware of her responsibilities as a director. If there were matters that were material to GE, we would expect her to bring them to the board.”

He added that since Ms Wong did not raise the meetings for discussion, it was assumed that nothing consequential or material to GE was discussed.

The shareholders on several occasions called on Ms Wong, who was present at the AGM, to personally clarify whether the meetings had taken place and what was discussed in them.

However, Mr Soon repeatedly declined on her behalf, stating that she was attending the AGM as a GE director and not as OCBC’s CEO.

He added that GE’s AGM is not the right forum for “some shareholders to question other shareholders with regard to certain media reports”. “That is outside the scope of this meeting,” he said.

Professor Lawrence Loh, director of the Centre for Governance and Sustainability at NUS Business School, noted that in the AGM setting, directors are expected to represent the interests of shareholders, regardless of their other roles outside the company.

He added that it is common for top executives of a parent company to serve as directors on a subsidiary’s board.

Prof Loh said it is the board’s prerogative on whether it wishes to verify the veracity of information relating to the company, noting that there were also no queries from the stock exchange regulator or the media on the matter.

“It is a matter of judgment at that point in time,” he said.

Still, the shareholders’ questions raise valid concerns over potential conflict of interest, given Ms Wong’s dual roles in GE and OCBC.

In fact, according to GE’s 2024 annual report, directors’ fees attributable to Ms Wong are payable to OCBC, which implies that she is acting as OCBC’s representative on GE’s board and not in a personal capacity. Another GE director, Mr Andrew Lee, is chairman of OCBC.

Both Ms Wong and Mr Lee are non-executive, non-independent directors of GE.

For its part, GE’s board said in reply to submitted questions from a shareholder ahead of the AGM that “directors with conflicts of interest will recuse themselves from discussions and decisions involving issues of conflict”.

It added that Ms Wong recused herself from board discussions or decisions in relation to OCBC’s voluntary unconditional general offer for GE in 2024. Ms Wong “also abstained from the board’s deliberations on the proposal for her re-election as a director”. 

Despite the shareholders questioning Ms Wong’s suitability as a director, however, the resolution to re-elect her to the board was passed with more than 99 per cent shareholder approval.

Still, GE’s AGM tensions reflect growing frustration among minority shareholders who feel short-changed by controlling shareholders during takeover attempts, and that their interests are not protected by the board.

Minority shareholder Ong Chin Woo told ST that the board’s actions matter given that GE is now at a “critical juncture” in its takeover by OCBC.

“The issue is why the independent directors of GE did not seek to clarify if the meetings had taken place at this critical juncture, and instead depended on Ms Wong to report such matters to the board. Why were they not proactive in looking after the interests of minority investors?”

OCBC in May 2024 launched

a $1.4 billion bid to privatise GE

by acquiring the remaining 11.56 per cent stake it did not own at $25.60 per share, representing a 36.9 per cent premium over GE’s last traded price.

Some minority shareholders, including Mr Ong, opposed the offer, which is also 30 per cent below GE’s embedded value of $36.59 as at Dec 31, 2023.

OCBC’s stake reached almost 94 per cent by the close of the offer in July 2024, causing GE to lose its required 10 per cent minimum free float. The Singapore Exchange (SGX) subsequently suspended trading in GE shares.

As the bank’s accumulated stake was insufficient for it to compulsorily acquire the rest of GE’s shares, or for the insurer to delist, it was given two deadline extensions to restore its free float to comply with listing rules.

The latest deadline is May 25.

OCBC has stated that it plans to seek GE’s delisting from the SGX if the public float requirement is not met. It also does not intend to take any action to keep GE listed if that requirement is not fulfilled.

In its 2024 annual report, GE said it is “still exploring the different possible options available to us to meet the requirement of SGX”.

In March, it appointed investment bank Merrill Lynch as financial adviser to assist the company in exploring its options.

At the AGM, Mr Soon noted that independent financial adviser EY had earlier assessed OCBC’s offer and concluded that while the financial terms were “not fair”, they were “reasonable”.

He added that EY had listed 19 different factors that were taken into consideration in arriving at its “balanced” conclusion.

Nevertheless, Mr Soon said the board recognises that the current trading suspension is “not a satisfactory situation”. He added that GE is engaging with OCBC to identify alternative solutions that it may not be able to pursue independently.

Mr Soon, a former chief financial officer of OCBC, was appointed chairman of GE in 2023.

In the meantime, shares of GE remain suspended from trading, preventing shareholders from monetising their stakes in the company.