Goh Jin Hian has left his post as chairman of Cordlife Group with immediate effect, although he continues to serve as an independent director.
This is in view of Inter-Pacific Petroleum's (IPP) judicial managers (JMs) having sued Dr Goh in relation to an alleged breach of director's duties, said Cordlife in a filing late Monday night.
Dr Goh, the medically trained son of former Singapore prime minister Goh Chok Tong, is thus stepping down as chairman "to devote more time to his personal affairs".
In the meantime, Ho Choon Hou, vice-chairman and independent director, has been named the acting chairman of the mainboard-listed cord-blood banking services company. Dr Ho will remain as an independent director.
Deloitte & Touche, the JMs of insolvent marine fuel and cargo trader IPP, filed the suit against Dr Goh in the Singapore High Court last Friday night.
The lawsuit is funded by IPP's two major bank creditors , Societe Generale and Maybank, which are seeking to recover losses they claim were a result of Dr Goh's alleged negligence, according to court documents seen by The Business Times (BT).
The JMs had sent a letter to Dr Goh, demanding he make restitution for IPP's US$156.5 million in debts due to the Singapore branches of Societe Generale and Maybank for what they claimed were drawdowns of trade facilities in June and July last year for "sham" transactions, BT reported last week.
He was executive director at IPP from 2011 to late 2014, and then non-executive director till August 2019.
The suit accuses him of breaching his duty to act with due care, skill and diligence to ensure that IPP's affairs were "properly administered and that its assets and property are not dissipated", among other things, The Straits Times (ST) reported on Monday afternoon.
According to the JMs, Dr Goh signed off on IPP's financial statements for 2017 and certified that the audited financial statements gave a true and fair view of the company's financial position, BT reported last week.
The JMs' checks found that some invoices issued for transactions between 2017 and last year were non-existent.
Had Dr Goh discharged his duties with care and diligence, the JMs alleged, the fictitious transactions would have been uncovered and the funds would not have been drawn down from the banks.
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Dr Goh told ST on Monday that he was "surprised that the judicial managers have commenced an action so unilaterally" without first engaging him about the full side of his story.
"What did the banks who are experts in trade financing miss that I should have picked up? What should I have done as a director that I did not do?"
Cordlife's nominating committee (NC) and board said in the Monday night filing that it would be appropriate to allow the legal proceedings to run its due course.
At this juncture, the cessation of Dr Goh's role as chairman will allow him to give sufficient time and attention to the company's affairs as an independent director, Cordlife added.
Accordingly, the NC and the board, with Dr Goh abstaining, believe he "has the character and integrity suitable to continue as independent director". They noted that given his qualifications, expertise and experience, it is in the best interests of the company for him to remain in that role.
Separately, Dr Goh has been assisting with the Commercial Affairs Department's (CAD) investigations into a possible offence under the Securities and Futures Act in relation to mainboard-listed healthcare and energy firm New Silkroutes Group.
He was chief executive officer of New Silkroutes until he vacated the role on Thursday, but remains its chairman.
Cordlife had said last Friday that it was supportive of Dr Goh's continued service as its chairman and independent director, as the board believed that his assistance with the probe did not compromise his ability to fulfil his duties, based on the information available to the company at the time.
They also said in another filing on Monday morning that there was nothing at that juncture to indicate that the CAD probe would compromise his ability to oversee and manage the affairs of the company in both roles.
Besides Dr Goh, New Silkroutes finance director William Teo and its former chief corporate officer Kelvyn Oo are also assisting with the investigations.
Mr Oo, who left New Silkroutes in August, is an independent non-executive director of Catalist-listed oil and gas-related company Teho International.
The investigation is not related to Teho and thus does not affect its business and operations, Teho announced in a filing on Tuesday.
It added that Mr Oo "has always conducted his duties professionally and in the best interest of the group" since he joined Teho's board in January 2015.
Cordlife shares last traded at $0.36 on Sept 30, while shares of Teho last traded at 4.5 Singapore cents on Monday.
This article was first published in The Business Times. Permission required for reproduction