Updated on October 15, 2018, 12.10 pm
By Mak Yuen Teen
On Oct 12, ICP Ltd, a Catalist-listed company, announced that its independent director, Winston Seow Han Chiang, had ceased to be an independent director of the company. Under the detailed reasons for the cessation, it said “On 10 October 2018, the Company was informed that Mr. Winston Seow has been disqualified to act as a director pursuant to Section 155A of the Companies Act for a period of 5 years from 4 June 2018. Based on its enquiries, the Company’s Sponsor, RHT Capital Pte. Ltd., is satisfied that, other than as disclosed in this announcement, there are no other material reasons for the cessation of Mr. Winston Seow as the Independent Director of the Company.”
Section 155A relates to disqualification for being a director of not less than three companies that had been struck off within a five-year period. There are certainly plenty of reasons for regulators and shareholders to be concerned about this development.
The date of cessation was stated as June 4 – the starting date of the disqualification period. Why was the company informed only on Oct 10 when Mr Seow was disqualified on June 4?
ICP did not say who informed it on Oct 10. Was it the director himself? Should the sponsor have asked the company to say more “based on its enquiries”?
ICP issued its annual report on Oct 5 which listed Mr Seow as a director, and the directors statement in it dated Sep 28 listed him as one of the directors in office (when he clearly should have vacated his office at that time).
Mr Seow is no ordinary director. He is the Chairman of the Nominating Committee which is supposed to advise the board on the appointment and re-appointment of directors. He is also a lawyer in a major law firm and heads up its corporate and securities department.
Shareholders should grill the board at the company’s AGM on Oct 24.
However, this is not the first instance of a director remaining on a board while disqualified. On Sep 12, Natural Cool Holdings announced that one of its independent directors, Ronnie Tan Siew Bin – also a lawyer – had been disqualified under section 155A for five years starting from Mar 16, 2017. The effective cessation date at Natural Cool was Sep 10, 2018. So in this case, he remained as a director for nearly 1.5 years after he had been disqualified. The sponsors at Natural Cool, PrimePartners Corporate Finance, issued an identical statement to what was issued by ICP.
The announcement said that Mr Ronnie Tan was “in the midst of filing an application to the Singapore High Court via an originating summons to rectify the situation”. There have been no further announcements on this from the company.
Regulators should look into the circumstances of such cases of directors directing whilst disqualified. Since the disqualification under section 155A starts from the date of the striking off of the third company within the five-year period, was it because the directors were not aware that their disqualification had commenced? If the disqualification starts from the date of the third striking off, shouldn’t the director have been alerted on that date that he or she has been disqualified with immediate effect? Or is it a case of delayed disclosure to the companies by the directors concerned?
