SingPost shares up on continuity at the top

SingPost shares up on continuity at the top

Singapore Post shares ended higher yesterday as investors digested news of succession planning at group level that will see independent director Low Teck Seng succeeding chairman Lim Ho Kee, who will step down next month.

Although the shares opened lower, they closed 1.2 per cent or two cents higher at $1.63.

Remisier Alvin Yong said: "The stock was up in line with the rebound in the market, and the succession plan suggests that the company is under stable management, and is addressing the corporate governance issues."

The e-commerce and logistics company last Friday said Mr Low, 60, will assume the role of chairmanwhen Mr Lim steps down on May 10. Mr Lim will also vacate his role as a director at the company's annual general meeting in July.

Mr Lim's decision comes amid controversy over the quality of corporate governance at SingPost. It began last December when the company admitted an "administrative oversight" for not properly disclosing director Keith Tay's interest in a 2014 acquisition.

But an analyst with a local brokerage said Mr Lim should not leave before the release of the results of a special audit of corporate governance issues. The timing of Mr Lim's departure "appears to be quite poor as it creates a lot of uncertainty right before the special audit report comes out", he said. "Even though he said he has been planning to step down now for almost three years, delaying a few more months would not have made a difference," he added.

SingPost has appointed special auditors PwC and Drew & Napier to scrutinise conflict-of-interest issues surrounding the 2014 acquisition. A summary of the audit findings is expected to be released to shareholders later this month.

It also appointed leadership firm Heidrick & Struggles as an independent consultant to carry out a corporate governance review, which is to be ready by July.

OCBC Investment Research, which has a hold call on SingPost, said in an earlier report that it is "quite likely a new CEO would only join the firm after there is more clarity from the special audit".

NUS Business School associate professor Mak Yuen Teen said he believes the addition of independent directors with "deep practical experience in logistics, e-commerce, technology and acquisitions" would boost the SingPost board's capabilities. But he added: "I do wonder whether SingPost should have appointed Professor Low as interim chairman first and make the final decision on the permanent chairman later... at least until after the corporate governance review has been completed."

He also said: "My main concern would be whether he will be able to commit the necessary time at a time when SingPost will need a chairman with his hands on deck to lead the taking of any necessary action or implementation of changes after the special audit and corporate governance review.

"Prof Low has a full-time job as CEO of the National Research Foundation, holds professorships at two local universities, and also sits on several other boards. However, I will keep my mind open and hope that he succeeds in his new role."

gleong@sph.com.sg


This article was first published on April 5, 2016.
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