SingPost Needs Rules After Disclosure Lapse, Audit Findsby
Audit finds SingPost lacks policy for mergers, acquisitions
Review is set to end before annual general meeting in July
Special auditors urged Singapore Post Ltd. to set up standard policies and guidelines for mergers and acquisitions as well as to show its directors’ interests in other companies, after finding disclosure lapses that sparked public scrutiny.
Drew & Napier LLC and PricewaterhouseCoopers LLP, appointed by Singapore Post, carried out the special audit after it emerged that a board member Keith Tay is a shareholder and chairman of the financial adviser to three freight forwarders the postal-services provider bought in 2013, 2014 and 2015, the company known as SingPost said in a statement late Tuesday. Tay has relinquished his position at SingPost with immediate effect, the company said.
SingPost disclosed Tay’s role in one of the transactions in December, the same month a commentary in the local Business Times newspaper raised questions about the company’s corporate governance. The postal operator, whose announcements on the transactions didn’t consistently disclose interests by directors or related parties, subsequently said it would appoint the two auditing firms to investigate the issues.
SingPost said in December last year it would conduct the special audit after an erroneous July 2014 filing that said none of its directors had an interest in one of the transactions, the company’s external public-relations firm said in an e-mail Wednesday. SingPost didn’t intentionally leave out information on the interests of any director, and the special auditors found that the error in the 2014 filing appeared to be a result of carelessness by SingPost staff, according to the public-relations firm.
The special auditors found that SingPost doesn’t have a prescribed policy, process or procedure to evaluate and approve mergers and acquisitions, according to the company’s statement. It also needs to define standard steps and guidelines, including the timing, for its directors to declare their interests.
“The board has reviewed and accepts the recommendations of the auditors,” SingPost said in the statement. “The board will implement them together with, and as part of, the broader corporate governance review presently underway.”
The review is expected to be completed before the company’s annual shareholders meeting scheduled in July, SingPost said. The company’s shares rose 0.6 percent to S$1.59 in Singapore Wednesday, paring this year’s decline to 3 percent.
The Singapore Exchange said in a separate statement late Tuesday that it asked SingPost to obtain independent confirmation of the recommendations set in the audit report. It also stressed that directors should disclose their interests in transactions and that a company’s board is ultimately responsible for its announcements.
Separately, SingPost is looking for a new chairman and chief executive officer. In April, Lim Ho Kee said he would step down as chairman from May 10, while Wolfgang Baier resigned as CEO on Dec. 10 and is supporting a handover until June 30.