It’s not every day that the board of a blue-chip company sacks its CEO and two other senior executives at the same time, but that’s the drama unfolding in staid Singapore.
Singapore Post, aka SingPost, says Group CEO Vincent Phang, Group CFO Vincent Yik and CEO of the company’s international business unit, Li Yu, made “serious misrepresentations” to an audit committee over allegations made in a whistleblower report and were “grossly negligent”, leading to their termination on Saturday.
SGX-listed SingPost could not be reached for comment at the time of publication.
Shares of SingPost dropped by nearly 11% on Monday before picking up slightly at market close. The stock tumbled 10.7% to 50 cents, down from Friday’s close of 56 cents apiece.
Earlier this year, SingPost received a whistleblower report alleging that some international transshipment parcels were not delivered by its international business unit for one of its largest customers, even though it was obliged to do so. The status of these deliveries was then manipulated without any basis or supporting documentation to avoid penalties, the company says in a filing made on Sunday to SGX.
Three managers were reported to the police.
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What’s next?
SingPost says that it has paid the customer a settlement sum that won’t affect its net assets or earnings per share for the current financial year. The customer has also renewed its contract with SingPost.
However, the fallout from this boardroom drama is likely to drag on: Phang and Yik say they will “vigorously contest” their termination.
The company has had lackluster growth for years. Just a week (16 December) before this scandal broke, S&P Global was saying there was uncertainty around SingPost’s future direction after a proposed sale of its Australia business, Freight Management Holdings.
Research firm MarketGrader has a “sell” rating for SingPost, saying in a 11 December report that its business model appeared to be “extremely weak” due to poor profitability.
Edited by Azar Zaidi and Victor Loh. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
