SingPost fires CEO Vincent Phang, CFO Vincent Yik over handling of whistleblower’s report

Singapore Post (SingPost) has terminated the employment of three of its senior management staff as they were found to be negligent in the handling of internal investigations over a whistleblower’s report that it received earlier this year.

The employment of group chief executive Vincent Phang, group chief financial officer Vincent Yik, and the chief executive of the company’s international business unit (IBU) Li Yu were terminated with immediate effect on Dec 21, 2024.

Phang was also asked to resign as a director of SingPost and all its related companies, the company said in a bourse filing on Sunday (Dec 22).

SingPost will announce the appointment of its new group CEO “in due course”, while Isaac Mah, current CFO of its Australian business, the FMH Group, will be appointed as the new group CFO.

Meanwhile, an acting CEO will be appointed to lead the IBU pending a board review of the unit – no appointment of a new IBU CEO is being proposed at this stage.

Board chairman Simon Israel will provide increased guidance to and exercise greater oversight of the senior management leadership team.

Whistleblowing report and internal investigations

SingPost said it received a whistleblowing report relating to its non-regulated international e-commerce logistics parcels business earlier this year.

Investigations by the company into the report found that three managers in the IBU had “committed serious breaches of the company’s code of conduct” for deliveries for “one of its largest” customers.

They had performed or approved manual updates of the “delivery failure” status code for parcels SingPost had agreed to deliver – without supporting documents and even though no delivery attempt had been made.

The employment of these three individuals was terminated earlier, and the company has also made a police report against them.

The company said that in the course of internal investigations, external professional advisers were engaged to review and assess the matter independently of management, as the audit committee had “no assurance concerning management’s representations and handling of the internal investigations”.

An external law firm was subsequently engaged to review management’s conduct in the matter.

SingPost found that the group CEO, group CFO and the CEO of the IBU were “grossly negligent” in the handling of the internal investigations, and had not considered material facts that compromised their decision-making and/or failed to perform their duties responsibly and reliably.

In particular, the company found that Phang, Yik and Li had accorded undue weight to the misrepresentations by representatives from IBU, without any independent substantiation or evidence.

This had in turn “made various serious misrepresentations” to the audit committee.

Phang, Yik and Li were also found to have failed to exercise due diligence and breached their duties to the company, in particular, their duty to use reasonable care and skill.

The serious misrepresentations also effectively undermined SingPost’s group internal audit unit, which is an independent and important group function that manages and investigates whistleblowing incidents, the company said.

Given the seriousness of these lapses and findings, the board said it has “lost confidence and trust” in the judgment of the three, and in their ability to perform their duties towards promoting and protecting the interests of the company.

In a joint statement released late last night, Phang and Yik said they “categorically reject any suggestion that we were grossly negligent, had behaved inappropriately or had sought to misrepresent facts at any point”.

“We disagree with and are disappointed at the decision of the board to terminate us from our roles at the company after years of dedicated and committed service.”

The duo said they will “vigorously contest” the termination of their employment, both on merits and on the grounds of procedural unfairness.

Phang and Yik said they had “dutifully presented” the case to the group internal audit, and provided it with the required space and latitude to investigate.

They said they also responded to questions based on facts that were presented to them at the time, and acted immediately once the correlation and impact had been established.

SingPost said postal services in Singapore will not be affected by the terminations as each of its businesses has its own leadership team, and will continue to operate normally. Nevertheless, the group said its internal controls and risk management systems are adequate to address the risks it considers relevant and material to its operations and finances.

“However, no system of internal controls, no matter how robust, can provide absolute assurance against deliberate misconduct or fraud,” SingPost said.

Appropriate actions have been taken on the matters, and operational measures have been enhanced to prevent similar occurrences, it added.

SingPost has informed the customer about the whistleblowing report and the findings. They have agreed on a settlement under which, among others, the company would pay a settlement sum in lieu of the penalties.

The company does not expect the settlement to have a material impact on its net tangible assets or earnings per share for the current financial year.

Its business with the customer has also not been materially affected – the contract has since been renewed following the settlement.

Phang was appointed group CEO on Sep 1, 2021. He joined SingPost in 2019 as CEO for postal services and Singapore, which comprises the post, parcel, and logistics business in Singapore.

Prior to his termination, Phang had directorships in several SingPost-linked entities, and is also the deputy chairman of the Workplace Safety and Health Council.

Before joining SingPost, Phang was the group CEO of ST Logistics and executive vice-president of Toll Global Logistics Singapore.

Yik joined SingPost in December 2021. Before that, he had held key executive roles at various companies, including CFO at OUE Lippo Healthcare and CFO of Far East Orchard.

Li joined SingPost on Sep 12, 2022, from United Parcel Service, where he was most recently responsible for its Asia-Pacific global logistics and distribution.

This is not the first time that the top role at SingPost was left empty amid a leadership shake-up.

In December 2015, then-CEO Wolfgang Baier abruptly quit, amid speculation that he may have been poached by another global firm in a similar space. He stepped down in June 2016.

The move caught investors by surprise and left the group scrambling to name a successor. Later, it recruited Paul William Coutts, former CEO of Toll Global Forwarding, to take on the role from Jun 1, 2017.

During the period, the company also saw several high-profile departures from the company, including then-CFO Daniel Phua, then-group chief operating officer Sascha Hower, then-board chairman Lim Ho Kee, and then-deputy chairman Goh Yeow Tin.

Shares of SingPost rose 0.9 per cent or S$0.005 to S$0.56 on Friday, before the announcement.

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Fired SingPost CEO, CFO to contest employment termination, both say move ‘without merits and unfair’