Date: April 16, 2008
SIAS has been closely following the resignation saga of the two independent directors of Swissco International with serious concern for the interests of the minority shareholders of the Company.
Having read the numerous press reports which covered the Company’s announcement and the independent directors’ resignation letters, members of SIAS Corporate Governance Committee this morning met with the independent directors at our request.
We appreciate fully the candidness of the independent directors in their resignation letters which was pursuant to the requirements of SGX. Whatever the differences and opinions that exist between the two independent directors, the majority shareholders and rest of the board, SIAS is strongly against any condition being placed on directors upon the election or re-election that will adversely impact on their independence. In particular, we strongly disagree with any attempt by any majority shareholder, which in this case is also in the management, to place constraints on independent directors to the effect that they serve only at the continued pleasure of the Chairman. Also in particular, we understand that Mr Rohan Khamis’ re-election was proposed for a period of one year renewable subject to the pleasure of the Chairman. This method of re-appointment of the independent director, i.e. at the pleasure of the Chairman, runs directly contrary to the mandate given by the company’s shareholders at the AGM which is, by convention, for a period of three years.
We are intrigued by the standard of corporate governance practiced at the Company. Firstly, the tenure is limited to one year whereas the tenure fixed by the shareholders, by convention, is three years. Secondly, as reported, the Chairman is seeking to fix the tenure of the independent directors at his pleasure which would be worrying to minority shareholders as this may constrain the independence of the independent directors.
The Chairman of the Company has stated that there are “factual inaccuracies” in the resignation letter of Mr Rohan Khamis. The company should clarify what these inaccuracies are?
Further, SIAS, in the interest of the minority shareholders of the Company, would ask if the company is going to adopt the annual evaluation of directors solely by the Executive Chairman?
Good corporate governance requires the Company to not only observe the corporate governance code in the letter of the law but more importantly in the spirit of the law.
President / CEO
For Management Committee, SIAS