SID calls for SingPost special audit to go beyond specific lapse

SID calls for SingPost special audit to go beyond specific lapse

Singapore - Ahead of Singapore Post's impending corporate-governance special audit, a professional body for board directors here has called for the scope of the audit to go beyond just investigating SingPost's recently admitted failure to disclose a director's conflict of interest.

Calling for the special audit to be "independent and thorough", the Singapore Institute of Directors (SID) said on Monday that the probe should also encompass areas such as the composition of its board, the functioning of SingPost's exco and CEO succession.

SID executive director Joyce Koh suggested that SingPost's special audit "go beyond these to board practices which have not fully complied with the recommendations of the Code of Corporate Governance and how they can, perhaps, be improved".

The institute made these comments in response to a question from The Business Times.

The postal and e-commerce group has neither announced the scope of its special audit nor identified the proposed special auditors.

Ms Koh said: "In SID's view, the review should not just be addressing the disclosure of a single conflict-of-interest situation; SingPost should take the opportunity to address the broader aspects of corporate governance.

"The good news is that it has been quick to admit to an administrative lapse and has commissioned a review ... The lessons will be useful to all companies because many of the issues and practices are common. SingPost should therefore see this as an opportunity to show that it can be at the forefront of corporate governance."

She pointed out that, at the end of the day, it was important to identify the processes that could be improved and to assess the damage - if any - that has occurred because of lapses.

"For these, we would not really know the answer until an independent and thorough audit is done."

SingPost had announced on Dec 23 that its director, Keith Tay Ah Kee, had "requested the chairman of the board for special auditors to be appointed immediately to investigate these issues thoroughly and to report directly to the board and the audit committee".

It did not specify the nature of the "issues".

The move came a day after the group admitted that it had made an "administrative oversight" in a July 2014 deal disclosure by not having properly disclosed Mr Tay's interest in its 2014 acquisition of FS Mackenzie, a United Kingdom-based freight forwarder that it had agreed to pay up to £7 million (S$14.8 million) for. The maximum purchase sum was more than twice FS Mackenzie's net asset value of £2.5 million, based on the target company's unaudited financial statements for the financial year ended Dec 31, 2013.

This article was first published on January 5, 2016.
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