Press Statement – Questions posed to the Board of SingPost at the meeting with SIAS President and 2 Committee Members on 19 Jan 2016, 3pm, SIAS Conference Room

Date: January 19, 2016

The following SingPost officials were present to meet President SIAS and 2 committee members:

1. Mr Lim Ho Kee, Chairman

2. Mr Goh Yeow Tin, Executive Director

3. Dr Wolfgang Baier, Group CEO

4. Mr Mervyn Lim, Deputy Group CEO (Corporate Services) & Group CFO

5. Mr Woo Keng Leong, CEO (Postal Services)

6. Dr Sascha Hower, Group Chief Operating Officer & CEO Quantium Solutions

7. Mr Peter Heng, Senior Vice President (Corporate Communications)

8. Mr Jason Lim, Assistant Vice President (Investor Relations)

The following questions were posed to the SingPost officials and a reply was requested.

1.   Board Composition – SingPost has 3 IDs 70 years and older. What plan does SingPost have to retire these long-serving directors? Is there a plan for Board renewal?
2.   Senior management concerns
i:   Company Secretary– SingPost has changed its company secretary several times in the past few years. What was the compelling reason for the numerous changes over a period less than 3 years? Given that a company secretary has a major compliance role, how has it impacted on SingPost corporate governance?
ii:   CFO– We observe that there have been frequent changes to the CFO as well. The experience of the current CFO, Meryvn Lim is questionable, especially coming with academic background. And he is now appointed as Deputy CEO (Corporate Services) just 2 months after joining with no proven record nor has any experience even as a General Manager.  What is the basis for his current appointment? Is he the most suitable candidate?
iii:   CEO– Why did Dr Wolfgang Baier, who had in 2015 won the “Best CEO” award at the Singapore Corporate Awards for Large-Cap companies and taking SingPost to be a global player in the eCommerce logistic industry, unexpectedly leave SingPost?
Prior to Dr Baier’s appointment, the post of Group CEO at SingPost has also seen rapid changes. The very first group CEO, former Citibanker Lau Boon Tuan, quit at the end of August 2007 after slightly over 2 years in the role. Wilson Tan succeeded Mr Lau and, similarly, quit after slightly more than 2 years at the helm in April 2010. Why is the tenure of CEO so short? How is the board planning to retain talent? Shareholders are obviously concerned that SingPost is unable to keep talented senior managers on board. A CEO is the captain of the ship and drives the vision of the company.
iv.   Appointment of Goh Yeow Tin as Executive Director to oversee the Group’s post-merger integration work- Does Mr Goh have sufficient time to do his best given his numerous other commitments?
3.   Transparency
i:   How did the “administrative oversight in disclosure” regarding the involvement of Mr Keith Tay in relation to the acquisition of FS MacKenzie and Famous Pacific Shipping (NZ) occur? Were there any weaknesses in compliances controls and did the Board review the announcements?
ii:   In Stirling Coleman where Mr Keith Tay was the director and major shareholder was the advisor to the seller of FS Mackenzie when Singpost bought it and Mr Tay is a director of SingPost. There is a potential conflict of interest, so how were the shareholders protected in this transaction? Was Mr Tay present during the discussions? Was that also the case in the acquisition of Famous Pacific and Famous Holdings? Were the fees Mr Tay earned, if any, from these transactions disclosed to Singpost?
iii:   According Sterling Coleman’s website, it was the “arranger” for the Famous Holdings deal and financial adviser to the seller for the FS MacKenzie as well? Has the interest of SingPost been addressed?
4.   Special Audit
i:   Why was a Special Audit called without SingPost first clarifying what is wrong? Currently, the market is trading without full information. Should it not have called a trading halt? When is the Special Audit report expected? What is the scope of the audit report? Will it cover issues relating to FS MacKensie and Famous Pacific Shipping deals? Will it shed light on how the sellers came to appoint Sterling Coleman?
ii:   What is the scope of the special corporate governance audit? Does the audit intend to systematically address all the corporate governance issues or only those raised in the media? Has the scope been discussed with the in-principle approval of the SGX? Who at the board will be responsible for overseeing the audit, appointing the special auditors and agreeing on the terms of the scope of work (it should not be overseen by Mr Lim Hoe Kee, as he is the subject of the comments or by SingPost management)? The concern is the likely perception of lack of independence. Nor should the management oversee this audit. The shareholders expect this not to be a whitewash. Given the current adverse perception in the market place, it would be advisable for SingPost to seek in-principle approval of SGX on the terms of reference of the special audit, in the interest of shareholders.
5.   Acquisitions
i:   How did the Board arrive at the amount to be paid for the following transactions:




No of Times

FS MacKenzie*

7 million pounds

2.5 million pounds


Famous Pacific Shipping (NZ)^

NZ$8 million

NZ$0.816 million


* Announcement made on 18 July 2014
^ Announcement made on 14 January 2015

What rationale can the Board provide for the price paid for the transactions?

ii:   The Trade Global deal, we believe, is SingPost biggest acquisition in the US. The acquisition was completed in a month. What due diligence was conducted?
With regards to Dr Baier’s exit, did he leave on his own accord or was he asked to leave? Did it have anything to do with the Trade Global deal? Did he express his concerns regarding this acquisition?
 We also note the sudden removal of Ms Jocelyn Ng as Company Secretary. Did she also raise issues about the Trade Global deal?
The SingPost Chairman left with assuring us that SingPost will address each and every question posed in due course. No discussion took place on the replies as the meeting was for SIAS to relay the serious concerns of SingPost shareholders and stakeholders.

David Gerald
President & CEO
Securities Investors Association (Singapore)