SingPost appoints Drew & Napier joint special auditor

Published February 09, 2016

First published in Straits Times, February 6, 2016

By Marissa Lee

Singapore Post has moved to assure shareholders by appointing Drew & Napier as joint independent special auditor alongside PricewaterhouseCoopers for the investigation into the firm’s corporate governance.

The board and audit committee said they stood by the decision that PwC was a suitable independent special auditor but they also recognised that there was disquiet among investors about the choice and how it is being perceived by the market.

SingPost said last night that Drew & Napier’s scope of work and detailed terms of reference in the audit will be the same as those of PwC, and the two will jointly issue a report. PwC, which was named SingPost’s special auditor in January, has been the company’s external auditor since the group listed in 2003.

This has sparked concern among media commentators, shareholders and the SGX over the auditor’s perceived lack of independence.

The special audit will examine issues surrounding SingPost director Keith Tay Ah Kee’s interests relating to SingPost’s acquisition of stakes in three companies: Famous Holdings, FS Mackenzie and Famous Pacific Shipping (NZ).

SingPost shareholder and associate professor at the National University of Singapore business school Mak Yuen Teen said that last night’s announcement would help allay concerns.

“My view is that Drew & Napier being the more independent party should lead the process,” he said.

Professor Mak noted that in 31 special audits over the past five years, there was only one case involving an S-chip (Singapore-listed Chinese company) where two audits were commissioned.

“It does not really make sense from a cost perspective but the additional costs could have been avoided with a more considered approach to appointing the special auditor to start with,” added Prof Mak. SingPost had said that the scope of work is the same for the two special auditors.

The audit, which is expected to be completed next month, will be released in full on the Singapore Exchange, including a summary of all key findings. The Securities Investors Association of Singapore (Sias) welcomed the appointment of Drew & Napier and the promise to send the full report to the SGX.

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