SIAS Calls SingPost for An Independent Professional Inquiry on Circumstances Leading to the Dismissal of Three Key Executives

Date: January 2, 2025

The sudden dismissal of three senior executives from SingPost, coupled with their vigorous denial of the allegations against them, has raised critical questions in the minds of shareholders, investors and the market.

The fact that they were told to leave with immediate effect points to an extremely serious breach of the rules which in turn necessitates detailed explanations. Yet it has to be said that the disclosures from the company and the responses from the three executives thus far raise more questions than provide answers.

Shareholders deserve better and so does the market if all are to make informed decisions regarding their investments.

Given the seriousness of the incident and the large number of questions still circulating, the SIAS (Securities Investors Association Singapore) strongly urges the commissioning of an independent professional inquiry into this matter.

If the investigation were to be conducted by a party independent of the company and its Board, these are some of the questions it should answer:

1) Given the apparent severity of the claims, was the Board the appropriate body to lead the investigation?

2) Did the Group Internal Audit (GIA) department have the necessary skills and expertise to objectively conduct the probe? How many staff are there in GIA?

3) In SingPost’s 29 Dec 2024 announcement “Response to Comments/Queries from Stakeholders’’ it stated:

“In the course of these investigations, it was found that, although Mr Phang, Mr Yik and Mr Li were provided with the reports and findings of, and concerns raised by, GIA which contained clear evidence substantiating the allegations by the whistleblowers, they nevertheless made serious misrepresentations concerning the whistleblowers’ allegations to the Audit Committee’’.

It goes further to state:

“These misrepresentations, made over three occasions from 11 March 2024 to 3 April 2024, contradicted the findings in GIA’s reports and were without any independent evidence or substantiation’’.

It appears therefore that the three affected individuals knew of the GIA’s findings as early as 11 March 2024 but nevertheless delivered false testimony three times.

However, Messrs Phang and Yik in their 31 Dec release have stated that they were interviewed on only two occasions and not three between 11 March-3 April, these being on 11 March and 3 April.

Furthermore, they state that when they were interviewed, they were not privy to the GIA’s findings and so “responded accordingly based on the facts that were provided’’ to them at the time, these facts presumably coming from the departments concerned.

They further stated that it was only on 27 April 2024 when the external forensics team’s investigations came to light that they had full knowledge.

So how many times were Messrs Phang and Yik interviewed, was it two or three? When did these two gentlemen know of the GIA’s findings, was it 11 March or 27 April?

What about Mr Li? Was he interviewed two or three times?

We have here a fundamental difference in positions taken by the two opposing parties. Note that the only way to properly resolve this is via an independent investigation.

4) Assuming that the three executives knew the GIA’s findings as early as 11 March and therefore knew from the start that the whistleblowing claims were substantiated, the question has to be asked: what prompted them to say otherwise, not once but two or three times?

Note that the answer to this question goes to the very heart of the issue because the repeated provision of information contrary to the findings of the GIA and external investigators by the three was the main reason given for their dismissal.

From the viewpoint of shareholders and the market, Messrs Phang, Yik & Li are presumably experienced and intelligent company officers. For them to collectively misrepresent practices on the ground implies they were acting in unison. Was there collusion? If so, what was their motivation?

5) Who were the external senior counsel and forensics service provider engaged to help the GIA?

6) Did the Board consider the issue of succession when it terminated the three executives given that such abrupt action would conceivably have been forseen to leave a large leadership vacuum at a time when a significant asset sale in Australia and strategic reset are ongoing?

7) The buyer of the Australian asset has said the deal is still on track. What assurance do shareholders have that a) the sale is actually still on and b) a strategic reset will still be possible, and indeed successful, given the loss of three key management personnel?

8) Were alternative disciplinary measures such as suspensions, pay cuts or demotions considered instead of sacking?

9) Potential litigation between SingPost and the dismissed executives may result in substantial legal costs, further eroding shareholder value. The proceedings could also damage SingPost’s reputation, potentially undermining investor confidence and the value of shareholders’ investments. Is the Board prepared for this?

Many more questions are possible but these should suffice to illustrate the magnitude of the problems facing the company and its shareholders.

An impartial and professional investigation is essential to address all issues, uncover the truth, and ensure justice is not only done but seen to be done.

Retail investors, who form a significant portion of SingPost’s shareholder base, deserve assurance that corporate governance processes are fair and transparent. Only through a wholly independent inquiry can transparency, accountability, and trust in SingPost’s governance be fully restored.

 

David Gerald
Founder, President and CEO
SIAS