SINGAPORE - Two weeks after external auditors of Sakae Holdings Ltd flagged financial irregularities at an associate firm, Andy Ong Siew Kwee, a non-executive director of Sakae, which owns the Sakae Sushi chain, has been asked to resign from its board. In a filing with the Singapore Exchange last night, Sakae revealed that Mr Ong, who managed Griffin Real Estate Investment Holdings, had been identified as the person responsible for "various undisclosed irregular financial transactions . . . undertaken in (Griffin)" that may be in breach of the Companies Act.
The board has asked Mr Ong to tender his resignation within seven days from Feb 1. If it does not receive his resignation in 14 days, it will convene an extraordinary general meeting to remove him from his position, Sakae said.
Mr Ong could not be reached for comment.
Sakae said in an earlier statement that the suspicious transactions were also in breach of a Sept 3, 2010, subscription and joint-venture agreement, and "may adversely affect (Sakae's) interests and the value of its investments" in the company.
An international accounting firm commissioned by Sakae executive chairman and CEO Douglas Foo Peow Yong to investigate Griffin's accounting records reported that the suspicious transactions included payments of substantial sums that have been made by Griffin and "apparent contracts which purport to oblige (Griffin) to make substantial payments to companies majority-owned or controlled by Mr Ong".
Sakae said that these transactions had not been properly disclosed to Sakae and Mr Foo, who is also the company's representative on Griffin's board. "As a director of the company, Andy Ong has both statutory and fiduciary duties that require him not to act against the interests of the company, and/or not to place himself in a conflict of interest position."
In recommending Mr Ong's resignation, Sakae's nominating committee, which includes Mr Foo, cited the findings of the accounting firm's report, a written complaint filed by Sakae's lawyers to the Commercial Affairs Department, as well as a confidential report on Griffin that had earlier been submitted to the Minister of Finance.
Under Section 207(9A) of the Companies Act, an auditor of a public company or a subsidiary of a public company, has a legal duty to report to the Minister of Finance immediately if he has reason to believe that a serious offence involving fraud or other dishonesty has been committed against the company by officers or employees of the company.
Sakae said that it believed that Mr Ong should not be permitted to be present at board meetings or be privy to discussions and decisions by the board regarding the ongoing investigations and other confidential matters concerning Griffin and him.
Mr Ong is also chief executive officer of ERC Holdings, which runs various businesses in education, training and property investments. According to ERC's website, he is a sought-after financial authority and had appeared frequently on CNBC, Bloomberg and Channel News Asia to speak on financial management issues.