SingPost special audit delayed by argy-bargy between auditors and directors: Sources

SingPost special audit delayed by argy-bargy between auditors and directors: Sources
SingPost is embroiled in a controversy over the quality of its corporate governance. Last Friday, Mr Lim its chairman, said he will step down on May 10. He will be replaced by Prof Low.
PHOTO: Singapore Post Limited

THE final report for Singapore Post's long-awaited corporate governance special audit has yet to be completed nearly a month after the findings were originally supposed to be released.

Though SingPost has not publicly pinpointed the cause of the seeming hold-up, sources indicated that one of the main reasons for the delay was a lengthy to-and-fro between the special auditors and board members such as independent director Keith Tay. They added that regulators also got involved.

Speculation is rife that after the report comes out, directors including Mr Tay may decide to leave the board ahead of the company's annual general meeting (AGM) in July. Mr Tay said in early April that he plans to not seek re-election at the AGM. He has also stepped down from the post of nominating committee chairman.

The SingPost counter dived 4.5 per cent or 7.5 Singapore cents to S$1.61 on Monday and has hovered around that level since. It closed at that price on Thursday, half a cent up from the previous day.

SingPost's special audit is being conducted by law firm Drew & Napier and consultancy PricewaterhouseCoopers (PwC). Mr Tay had proposed the special audit in December last year and the board tapped PwC as special auditor about four weeks later in late January. But after public pressure over PwC's role as SingPost's longstanding external auditor, the board brought in Drew & Napier as joint special auditor in early February and said that the joint special audit would be completed in March.

At the end of March, however, SingPost said that it expected to release a summary of the audit findings in April. And as at Thursday evening, there was still no sign of the special audit summary.

"We understand that the auditors are close to completing the report," SingPost spokesman Peter Heng told The Business Times on Tuesday. When asked what had held up the report, he would only say: "This is the result of the thorough and independent investigation that the joint auditors have undertaken."

He added that SingPost was sticking to its decision to release only a summary of the special audit findings to shareholders, rather than the full report. "Our position to issue a summary of the special audit for our shareholders and other stakeholders remains. The full report will be submitted to the regulatory authorities."

Mr Heng said over the phone on Thursday that SingPost's Tuesday statement still held.

SingPost shareholder and corporate governance specialist Mak Yuen Teen told BT: "While I would like a thorough special audit rather than a speedy one, it's well overdue now. Such a delay may lead to speculation about the findings and whether there is pressure to redact the special audit report."

Sources said that the special audit findings were taking some time to be completed partly due to a drawn-out to-and-fro between the special auditors and board members including Mr Tay, who is at the centre of SingPost's corporate governance maelstrom.

Mr Tay was given at least three opportunities for Maxwellisation rather than the typical one shot, sources said. Maxwellisation is a legal term that refers to the process of presenting critical references in a probe to the criticised parties to give them the chance to reply.

The board has also needed time to formulate its response to the special audit findings, the completion which might be followed by board changes, sources added.

SingPost's corporate governance issues centre on Mr Tay's interest in the group's acquisition of stakes in three companies. SingPost admitted last December that it had failed to properly disclose Mr Tay's interest in a 2014 acquisition.

This article was first published on April 29, 2016.
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