SINGAPORE - Singapore Post's dismissal of three senior executives, including its group chief executive and group chief financial officer, is unprecedented for a major Singapore-listed company, and highlights the importance of corporate governance, analysts said.

However, the company's handling of the whistle-blower's report that led to these dismissals has also left shareholders with unresolved questions. For example, details have not been provided on when the board received the whistle-blower's report and what safeguards were put in place while investigations took place.

Disclosures surrounding the terminations are "insufficiently clear" to SingPost shareholders at this point, said Mr David Gerald, president and chief executive of the Securities Investors Association (Singapore), or Sias.

SingPost's latest annual report for the 2024 financial year also did not specifically mention the whistle-blowing issue.

Replying to queries from The Straits Times on Dec 23, the Infocomm Media Development Authority (IMDA) said the e-commerce shipment data falsification case was raised to IMDA and SingPost in February by a whistle-blower, 10 months before SingPost disclosed the fact.

IMDA said it also issued an advisory to SingPost to uphold proper governance and processes.

It added: "Regulated postal services remain unaffected as this matter concerns delivery of international e-commerce parcels overseas. IMDA is monitoring the situation closely. SingPost's board has assured that postal service operations in Singapore are not affected."

Group CEO Vincent Phang, group CFO Vincent Yik, and the CEO of the company's international business unit, Mr Li Yu, were fired on Dec 21 after SingPost concluded investigations into the whistle-blower's report.

SingPost disclosed in a Dec 22 exchange filing that it received a whistle-blower's report in 2024 relating to its international e-commerce logistics parcels business.

The report alleged that manual entries of delivery status codes were made for international parcels that SingPost had agreed to deliver for a customer. The entries were allegedly done without basis or supporting documentation, SingPost said in its statement.

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It also found that the group CEO, group CFO and the CEO of international business were "grossly negligent" in the handling of the internal investigations, among others.

Mr Gerald asked if further reviews would be conducted following these investigations, and if the key findings from the internal investigations would be published.

"Will the company be carrying out a groupwide review to ascertain that all other business units are operating in accordance to the group's established rules and protocols?"

When asked if the report would be made public while protecting the identity of the whistle-blower, SingPost said in its reply to queries from ST that it is unable to share the contents "due to confidentiality of any whistle-blower report and in accordance with our existing policy".

Mr Gerald asked if SingPost could provide an update on its working relationship with the customer affected by its breach of conduct, given that it is one of SingPost's largest.

Replying to ST's queries on the customer's identity, SingPost said it is unable to provide any further information or details due to the confidentiality of the customer contract.

SingPost has informed the customer about the whistle-blowing report and paid it a settlement sum in lieu of penalties that would have been levied in connection with the manual updates.

"The settlement is not expected to have a material impact on the company's net tangible assets or earnings per share for the current financial year. The company's business with the customer has not been materially affected, and the contract has since been renewed following the settlement," SingPost said.

Mr Gerald said shareholders also want to know whether the dismissals and allegations made in the report affect the proposed sale of SingPost's Australian business, announced on Dec 2, given that Mr Phang had been heavily involved in the plan to restructure SingPost in March.

He asked how the board will find suitable replacements for the three senior roles.

SingPost said in its statement it will announce the appointment of a new group CEO "in due course".

Mr Isaac Mah, now the CFO of the Australian business, will be the new group CFO, subject to regulatory approval.

"Postal services in Singapore will not be affected. Each of the group's businesses has its own CEO and leadership team, and will continue to operate normally," SingPost said.

"An acting CEO will be appointed to lead the international business unit pending a board review of the business unit. No appointment of a new CEO of the unit is being proposed at this stage."

Despite these unresolved questions, some corporate governance experts noted that the board had made tough leadership calls to protect shareholder interests.

Professor Lawrence Loh, director of the NUS Centre for Governance and Sustainability, said: "The current incident points to decisive corporate governance actions against the indicated management lapses."

Associate Professor Ben Charoenwong from Insead Singapore said global financial regulations require independent directors on boards so that they can take such actions against executives when necessary.

"In this case, the removal of the CEO and CFO by the board may be viewed as the board appropriately managing (regulatory) risk so shareholders are not on the hook for paying other fines."

Shares in SingPost closed on Dec 23 at 50 cents, down 10.7 per cent.

This article was first published in The Straits Times. Permission required for reproduction.