SingPost saga: Drew & Napier to join PwC in special audit

SINGAPORE - In a move to quiet concerned shareholders, Singapore Post has appointed Drew & Napier to act as joint independent special auditor alongside PricewaterhouseCoopers for the investigation into SingPost's corporate governance.

"Whilst the Audit Committee and the Board stand firm in their determination that PwC is able to act as independent special auditor to the company, the Audit Committee and the Board are cognizant of the concerns that have been expressed and the perception of the market regarding PwC's appointment," SingPost said in a statement on Friday (Feb 5).

The audit is expected to be completed in March, and SingPost said it will share the full audit report and a summary of all key findings on the Singapore Exchange.

PwC was named SingPost's special auditor in January. As PwC has been SingPost's external auditor since the group's listing in 2003, media commentators, shareholders and the Singapore Exchange had raised concerns over the auditor's perceived lack of independence.

SingPost said last night that Drew & Napier's scope of work and detailed terms of reference in the special audit will be the same as that of PwC, and the two will jointly issue the special audit report.

Senior counsel Hri Kumar is the partner leading the joint special audit exercise at Drew & Napier.

The special audit will probe issues surrounding SingPost director Keith Tay Ah Kee's interest relating to SingPost's acquisition of stakes in three companies: Famous Holdings, FS Mackenzie, and Famous Pacific Shipping (NZ).

SingPost shareholder and Associate Professor Mak Yuen Teen of the National University of Singapore business school said last night's announcement would help allay concerns.

"My view is that Drew & Napier being the more independent party should lead the process," he added.

Prof Mak noted that in 31 special audits over the last five years, there was only one case involving an S-chip (Singapore-listed Chinese company) where two audits were commissioned.

"It does not really make sense from a cost perspective but the additional costs could have been avoided with a more considered approach to appointing the special auditor to start with," said Prof Mak. SingPost had said that the scope of work is the same for the two special auditors.

The Securities Investors Association of Singapore (Sias) welcomed the appointment of Drew & Napier and the promise to send the full report to SGX. "SIAS awaits the report and findings of the special audit," said Sias president David Gerald.