Sias calls for independent professional inquiry into SingPost’s firing of its execs

An independent professional inquiry should be called to look into the circumstances that led to Singapore Post (SingPost) firing three of its executives, said the Securities Investors Association (Singapore), or Sias, as shareholders deserve to know what exactly happened.

“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,” said Mr David Gerald, Sias president and chief executive, in a Jan 2 statement to The Straits Times.

“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.”

He added that “the disclosures from the company and the responses from the three executives thus far raise more questions than provide answers”.

SingPost’s group CEO Vincent Phang, group chief financial officer Vincent Yik and CEO of the company’s international business unit Li Yu were fired on Dec 21 after it concluded investigations into a whistle-blower’s report.

The report alleged that the delivery status codes on parcels to be delivered for an international e-commerce customer had been falsely changed to “delivery failure”, when no attempts were made to deliver them, in order to avoid penalties.

SingPost disclosed in a Dec 22 exchange filing that it received the whistle-blower’s report earlier in 2024 relating to its international e-commerce logistics parcels business.

In the days that followed, SingPost disclosed more information, including a timeline of events and the investigations into both the whistle-blowing report and management’s handling of the report.

SingPost’s stock fell to 50 cents on Dec 23 after the news broke, from its last traded price of 56 cents. It has since recovered some ground to trade at 54 cents at the close on Jan 2.

Mr Gerald said: “Shareholders deserve better and so does the market if all are to make informed decisions regarding their investments.”

He asked if the board was the appropriate body to lead the investigations, given the apparent severity of the claims.

He also inquired if the group internal audit department at SingPost had the necessary skills and expertise to objectively conduct the probe, and asked how many staff are in this department.

SingPost first received the whistle-blowing report on Jan 17, and investigations conducted by SingPost’s internal auditors started on that day. On March 11 and April 3, the audit committee met and discussed findings by the internal auditors.

On April 19, the audit committee engaged a forensics service provider to review and advise on matters raised in the report.

Mr Gerald also pointed out discrepancies between what SingPost said about the three executives and what the executives said about themselves.

SingPost said in its Dec 29 response to shareholders that Mr Phang, Mr Yik and Mr Li were provided with the reports and concerns raised by the internal auditors, but made misrepresentations over three occasions from March 11 to April 3.

But Mr Phang and Mr Yik, in a statement released to the media on Dec 31, said they were asked for their views only on March 11 and April 3, and responded accordingly based on the facts that were provided to them at the time.

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

All three executives are contesting SingPost’s firing, which they said was unfair and without merit.

“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,” Mr Gerald said.  

He added: “From the viewpoint of shareholders and the market, Mr Phang, Mr Yik and Mr 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?”

He asked if alternative disciplinary measures such as suspensions, pay cuts or demotions had been considered, before the firings.

He also asked if SingPost could reveal the identities of the external senior counsel and forensics service provider that it had engaged to help the internal auditors.

Looking to the future of SingPost, Mr Gerald asked if the board considered the issue of succession when it terminated the services of the three executives, given that such abrupt action would leave a large leadership vacuum, especially at a time when the company had a significant asset sale going on in Australia and its strategic reset.

On Dec 29, SingPost’s board said it will work with the existing management to ensure the sale of its Australia freight business is completed as planned. 

“What assurance do shareholders have that the sale is actually still on and a strategic reset will still be possible, and indeed successful, given the loss of three key management personnel?” Mr Gerald asked.

He added that potential litigation between SingPost and the sacked 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?”

Mr Gerald noted that these questions show the magnitude of the problems facing SingPost and its shareholders.

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

He added: “An impartial and professional investigation is essential to address all issues, uncover the truth and ensure justice is not only done, but (also) seen to be done.”

Sue-Ann Tan is a business correspondent at The Straits Times, covering capital markets and sustainable finance. 

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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