SingPost made ‘administrative oversight’ in 2014 deal disclosure

Published December 24, 2015

First published in Business Times on December 23, 2015

By Melissa Tan

POSTAL and e-commerce group Singapore Post said on Tuesday that it had not properly disclosed a board director’s interest in a 2014 acquisition that the group had agreed to pay up to £7 million (S$14.8 million) for.

Citing “administrative oversight”, SingPost noted in a Singapore Exchange (SGX) filing that it had stated in July last year that none of its directors had had any interest in SingPost’s purchase of FS Mackenzie, a United Kingdom-based freight forwarder.

However, one of its directors actually had an interest in the FS Mackenzie deal at the time it was done, although he had abstained from voting on the deal.

SingPost said: “The company would like to clarify that none of the directors or controlling shareholders of the company had any interest, direct or indirect in the transaction, save for Mr Keith Tay Ah Kee . . . Accordingly, Mr Tay, as reflected in board minutes, had abstained from all voting by the board of the company in relation to the transaction.”

The group posted the filing a day after The Business Times sent it several queries after receiving a letter from corporate governance specialist and SingPost shareholder Mak Yuen Teen regarding the company’s disclosures. While SingPost was not privy to the letter, BT’s queries were based on issues raised in it relating to the FS Mackenzie deal and to the January 2015 acquisition of a stake in another freight forwarder, New Zealand-based Famous Pacific Shipping (NZ) Ltd.

SingPost spokesman Peter Heng told BT via e-mail on Tuesday that Mr Tay had abstained from voting on the group’s purchase of FS Mackenzie and its acquisition of a stake in Famous Pacific. Mr Heng did not say whether Mr Tay had also recused himself from all board discussions about those transactions, which was a concern raised by Mr Mak.

SingPost’s latest statement came as concerns emerged about corporate governance at the group, in the wake of the shock resignation earlier this month of SingPost chief executive Wolfgang Baier.

In a letter to BT, Prof Mak raised fresh questions about SingPost’s public disclosures relating to one of its directors’ possible interest in three of the group’s recent acquisitions.

Prof Mak, an associate professor at NUS Business School, asked SingPost in his letter to clarify whether its independent director Keith Tay had recused himself from board discussions about the group’s acquisition of stakes in Singapore-based freight forwarder Famous Holdings; FS Mackenzie; and Famous Pacific.

Mr Tay is a director and shareholder of Stirling Coleman Capital Ltd, which indicates on its website that it acted as the “financial adviser to seller” for both the FS Mackenzie and the Famous Pacific deal, Prof Mak pointed out in his letter.

Stirling Coleman was also the “arranger” for the Famous Holdings transaction, according to both its website and a SingPost filing on the Singapore Exchange (SGX).

SingPost had said in a January 2013 filing that it had agreed to buy a 62.5 per cent stake in Famous Holdings, adding: “None of the directors or controlling shareholders of the company has any interest, direct or indirect, in the above transaction, save for Mr Keith Tay who is a non-executive chairman and a shareholder of Stirling Coleman Capital Ltd. Stirling Coleman Capital Ltd is the arranger of the transaction. Accordingly, Mr Tay has abstained from all votings by the board of the company in relation to this transaction.”

Mr Tay was first elected a director of SingPost in April 1998 and his principal commitments include being Stirling Coleman’s non-executive chairman, the group said in its latest annual report for FY2014/15. It also said in an SGX filing in July this year that Mr Tay had been re-elected to the board at its July 8 annual general meeting.

Mr Tay has also been a non-executive director of Stirling Capital since 2001, Mr Heng told BT.

Stirling Coleman’s website, as viewed on Dec 21, made mention of both the FS Mackenzie purchase and the Famous Pacific deal in a section titled “Selected Transactions”.

The section contained this sentence: “(21 July 2014) Singapore Post Ltd acquired FS Machenzie Ltd for S$14.8m (Financial Adviser to Seller).” Though the target company’s name was spelt “Machenzie” on the webpage and not “Mackenzie”, that sentence is linked to another page that described SingPost’s acquisition of FS Mackenzie.

It also had another sentence: “(19 January 2015) SingPost acquires New Zealand-based freight forwarder (Financial adviser to seller).” Though it did not name the acquisition target in this case, the sentence is linked to a page that identified it as Famous Pacific.

SingPost said in a July 2014 SGX filing that it had agreed to snap up the entire FS Mackenzie for up to £7 million, noting that FS Mackenzie’s net asset value was £2.5 million based on the target company’s unaudited financial statements for the financial year ended Dec 31, 2013. The group had also said in this filing that “none of the directors or controlling shareholders of the company has any interest, direct or indirect, in the acquisition”.

As for Famous Pacific, SingPost said in an SGX filing on Jan 14 this year that its unit Famous Holdings had bought 90 per cent of Famous Pacific and paid an initial consideration of NZ$3.6 million (S$3.5 million). Famous Pacific’s net asset value was NZ$816,104 based on its audited financial statements for the FY ended March 31, 2014, SingPost noted. In this filing, it did not include a paragraph on whether its directors or controlling shareholders had any interest in the Famous Pacific deal.

It also did not mention Famous Pacific in its SGX filing on Tuesday.

However, SingPost’s Mr Heng told BT that Mr Tay had “disclosed his interest and abstained from voting related to the acquisition of Famous Holdings”, “disclosed his interest and abstained from voting related to the acquisition of FS Mackenzie” and “disclosed his interest and abstained from voting related to SingPost’s acquisition in Famous Pacific”. He also confirmed that Mr Tay has been a non-executive director of Stirling Coleman since 2001.

SingPost has seen a few company secretary departures over the past two years, and the group’s SGX filings that announced the three separate deals – that is, Famous Holdings, FS Mackenzie and Famous Pacific – were all made by different company secretaries.

Genevieve Tan McCully, who was appointed in 2010, resigned in August 2014. Later, Winston Paul Wong resigned in January 2015 after having been company secretary since November 2013. Jacqueline Woo, who was appointed to the position in November 2014, also left as company secretary in July 2015 after her contract ended, according to SingPost filings.

On Aug 19, SingPost appointed Jocelyn Ng, but then on Nov 25, it replaced her with Mrs Tan McCully. It was the latter who submitted SingPost’s filing on Tuesday.



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