The Singapore Exchange (SGX) has publicly reprimanded Singapore Post following a special audit that uncovered weak governance controls at the company's board.
It also found potential inaccuracies in records and a lack of proper procedures for evaluating deals and for disclosing conflicts of interest.
The rebuke brings to an end the fiasco from a regulatory standpoint, nearly 18 months since SingPost admitted to an "administrative oversight" by not properly disclosing a director's interest in its purchase of freight forwarder F. S. Mackenzie.
Former lead independent director Keith Tay has since resigned. The postal and logistics group also had a board overhaul last year.
In a statement yesterday, the SGX said it has concluded that SingPost breached Listing Rule 719(1). "Listed companies should have clear, established disclosure policies and appropriate systems of internal checks and controls to assure compliance with disclosure obligations," the SGX said.
In particular, the SGX noted that the inaccurate disclosure in the F.S. Mackenzie acquisition announcement was not brought to the board's attention once identified. SingPost issued a clarification only after much public commentary questioning SingPost's corporate governance - 17 months after the original announcement.
Timeline of events
July 18, 2014: SingPost disclosed it had wrongly stated that none of its directors had any interest in the acquisition of freight forwarder F.S. Mackenzie.
Dec 22, 2015: SingPost said it made an "administrative oversight" and clarified that director Keith Tay was non-executive chairman and shareholder of Stirling Coleman Capital, the arranger for the acquisition.
Dec 23, 2015: SingPost said it would appoint special auditors to look into issues relating to its corporate governance.
May 3, 2016: The report by special auditors Drew & Napier and PricewaterhouseCoopers attributed the disclosure lapses to the carelessness of SingPost staff rather than deliberate attempts to conceal Mr Tay's interests.
May 18, 2016: The Accounting and Corporate Regulatory Authority (Acra) asked for a copy of the joint special audit report from SingPost to investigate possible breaches of the Companies Act. Earlier, the SGX had said it would refer any breaches to the relevant authorities.
May 4, 2017: SGX said it had publicly reprimanded SingPost. Separately, Acra disclosed it had issued an advisory to Mr Tay to emphasise the need to comply with the duty of disclosure under the Companies Act.
Although the SGX's enforcement powers were enhanced in October 2015, the breach happened in 2014 under an older regime, and a public reprimand is the limit of its powers for such a breach.
In a separate statement, the Accounting and Corporate Regulatory Authority (Acra), said it has completed investigations into Mr Tay for possible Companies Act breaches of his duty of disclosure.
Acra launched the investigation last May after SingPost's special auditors noted in a report that Mr Tay was "arguably in breach" of section 156(1) of the Companies Act for not declaring his interest in another acquisition, that of Famous Holdings in 2013, "as soon as practicable".
But Mr Tay seems to have got away with a light slap on the wrist.
Acra said: "After careful consideration of this matter, and in consultation with the Attorney-General's Chambers, Acra has issued an advisory to Mr Keith Tay to emphasise the need to comply with the duty of disclosure under the Companies Act."
Mr Tay said yesterday that Acra's advisory was a good and timely reminder: "I have, on my part, at all times, endeavoured in good faith to comply with Section 156 of the Companies Act."
He added: "I was the one who alerted SingPost in the first place to the mistake in the announcement, very soon after I saw it."
National University of Singapore Business School Associate Professor Mak Yuen Teen, who had called attention to SingPost's poor governance in December 2015, said: "It is important for directors to bear in mind that the bar is constantly being raised in terms of market and regulators' expectations on director duties. What may be tolerable in the past may not necessarily be so today or in the future."