Date: June 27, 2023
Board of Directors
Digilife Technologies Limited
1 North Bridge Road
#19-04/05 High Street Centre
Singapore 179094
Here are questions attached for your Board to address as shareholders of your company have expressed serious concerns to SIAS over the recent appointments which are puzzling and worrisome to shareholders.
Your urgent attention and replies to our questions will be appreciated by all your stakeholders.
SIAS notes the company’s announcement dated 16 June 2023 regarding the cessation of Dr. Bhupendra Kumar Modi (“Dr. Modi”) from his roles as executive chairman and group chief executive officer (“GCEO”) of Digilife Technologies Limited with certain concerns.
Circumstances leading to Dr Modi’s resignation
As disclosed by the company, Dr. Modi’s cessation will be effected on 23 June 2023, just one week after the company’s announcement.
1. Can the company provide clarity on why Dr. Modi has provided only one week’s notice? Kindly provide an explanation of the circumstances that led to the short notice period.
The succession and leadership development plan and the impact on the group of Dr. Modi’s cessation
SIAS is concerned about the circumstances surrounding the cessation, as it appears to be primarily driven by personal reasons without any information on proper and professional succession planning. The decision to step down as executive chairman and GCEO appears to be based on Dr. Modi’s personal reasons. This is the second time he has stepped into the role and later stepped down in a short period of time. This raises concerns regarding the succession plans, the effectiveness and professionalism of the board, and the impact on the continuity and governance of the company.
2. Can the nominating committee (NC) provide shareholders with a detailed overview of the group’s succession and leadership development plans for directors, in particular, the chairman, CEO and also key management personnel?
3. Given that the cessation appears to be based on Dr. Modi’s personal reasons and circumstances, can the NC confirm that the cessation is a planned one or an unplanned one? What is the impact on the group?
The second cessation of Dr. Modi as the board chairman
In fact, when SIAS reviewed the company’s annual report in April 2021, it was pointed out that Dr. Modi was previously the chairman of the board until 2018 when he stepped down “due to personal reasons / preoccupations and his plans to pursue philanthropic endeavours in the quest for building a better society and work towards the greater good”.
SIAS had queried the company and the board/Dr. Modi when he was appointed again as chairman and GCEO if he has the focus, bandwidth and a plan to lead the group given that he resigned in 2018. The company then answered that “the chairman has sufficient capability and bandwidth to lead the group…… in parallel continue to pursue his philanthropic endeavours which he has been executing for last many decades in parallel”.
4. How can the NC assure shareholders that the group is professionally managed and that there is a professional, stable, experienced and focused management team, supported by a dedicated, professional board providing guidance to management to create long-term and sustainable value for all shareholders?
Frequent changes to the board, the selection criteria and the search and nomination process
On 23 June 2023, the company announced the appointment of Mr. Mukesh Khetan[1] as executive director and GCEO to replace Dr. Modi. The board also redesignated as Ms. Chada Anitha Reddy[2] from executive director to executive chairperson. In December 2022, Ms. Chada Anitha Reddy was redesigned as an executive director following the cessation of the then-interim CEO, Mr. Maneesh Tripathi who served from September 2021 to April 2022.
In the company’s 2022 annual report, the NC states that the search for candidates for the board is “conducted through a broad network of contacts”.
5. Can the board restate the group’s strategic growth plans? Based on the group’s long-term strategies, what are the target profiles and search criteria of the chairman and CEO used by the NC in its search?
6. How are the appointments of Mr. Mukesh Khetan and the redesignation of Ms. Chada Anitha Reddy aligned with the group’s strategies?
7. Given that Mr. Mukesh Khetan has been with the Selular Group since 2012, can the board quantify the performance of Selular Group and the track record of Mr. Mukesh Khetan in the past decade? Specifically, what experience does Mr. Mukesh Khetan have leading a Singapore listed company which has accumulated losses of over $523 million as at 31 December 2022? How did the board/NC evaluate the appointment of Mr. Mukesh Khetan as executive director and GCEO? Did the board consider the effectiveness of the director given that his principal residence is India, the group’s main businesses are in Indonesia and the company is a Singapore-listed company?
In addition, Ms. Chada Anitha Reddy was the company’s head of human resources department in 2011. She was first appointed as a non-independent non-executive director in June 2022 and re-designated to executive director following the resignation of the then-interim CEO in December 2022. Now in June 2023, following the resignation of Dr. Modi, Ms. Chada Anitha Reddy has been appointed as the board chairperson. The company also disclosed that Ms. Chada Anitha Reddy has 22 past directorships for the last 5 years, with 11 of them being struck off.
8. With all due respect to Ms. Chada Anitha Reddy, with her background in human resources, how did the NC assess that Ms. Chada Anitha Reddy has the experience and relevant track record to lead the group and to create long-term sustainable value for shareholders, (including minority shareholders), keeping in mind that the company has accumulated losses of over $523) million? Has Ms. Chada Anitha Reddy been affected by ACRA’s disqualification of directors who have had at least three companies struck off by ACRA within a period of five years[3]?
9. Again, with due respect to the two directors mentioned above, how widely did NC cast its net when it searched for new directors? How many candidates, internal and external, were considered and interviewed? Given that the appointments were made in a week following Dr. Modi’s decision to resign, did the NC follow proper procedure in the search and nomination process? Can the NC also confirm that the appointments were thoroughly and robustly deliberated on, and that there are no other better and suitable candidates who are available, and these are not “next-in-line” appointments?
10. Did the NC evaluate how the use of personal network of contacts to search for director candidates may lead to reduced independence and lack of diversity? Would the NC be using a professional search firm to help the group cast a wider net and possibly improve the quality and diversity for any future appointments?
High attrition rate
In addition, Mr. Doraraj S and Mr. Tushar S/O Pritamlal Doshi retired as directors from the board on 28 April 2023. Mr. Mayank Vishnoi was the CEO from April 2021 to October 2021 and, as mentioned earlier, Mr. Maneesh Tripathi served as the interim CEO from September 2021 to April 2022.
11. Can the NC explain why there are so many changes in the company and the board and has it reviewed how the changes have affected the group? In addition, will the NC be leading a review to understand the circumstances leading to the relatively high rate of attrition in the board and in the management team, including a review of the culture of the group, the HR practices and the recruitment processes?
Regards
David Gerald
For and on behalf of Management Committee
[1] https://links.sgx.com/1.0.0/corporate-announcements/MZ68LEIGB0V9RMLN/3a968e1da1a1fc9b99c27a355182ad4ffec499dc21f655ca3a585cff20c62c58
[2] https://links.sgx.com/1.0.0/corporate-announcements/ZELOB7QPGW7C7BGR/286e7811c5ee5a495fe4d6a28c17f0a05f0dd7455550de5226ed4f9faa66176e
[3] https://www.acra.gov.sg/compliance/offences-of-not-holding-agm-or-filing-ars-late-or-not-laying-up-to-date-accounts-at-agm/AGM-and-annual-return-breaches/striking-off-of-companies-that-failed-to-file-ars
