On 25 June 2021, SGX Regco issued a notice of compliance (NOC) to ecoWise Holdings (ecoWise). ecoWise had been left with just one independent director – Mr Er Kwong Wah, the lead independent director – and two executive directors, with the latter fighting with each other. Two independent directors had earlier resigned in May 2021.
In the NOC, SGX Regco required the company to appoint at least two new independent directors based on recommendations from independent professional associations/bodies so as to constitute its audit committee. Given the problems in the company which have been well reported in the media, many qualified candidates would likely not want to join the board. It is understood that the company sought the assistance of the Singapore Institute of Directors (SID) to search for the new independent directors.
On 4 September 2021, the company announced that it has appointed two new independent directors – Mr Lo Kim Seng and Mr Tham Chee Soon – after a search that took more than two months. The search with the assistance of SID apparently did not get too far as the two new independent directors are both independent directors at Fragrance Group Limited, while Mr Lo and Mr Er were fellow directors at CFM Holdings. Mr Lo joined CFM in July 2020 while Mr Er resigned in July 2021, to focus on his other directorships, including to comply with the NOC issued to ecoWise.
While all three independent directors have experience as directors of listed companies, the interlocking relationships among them may raise questions about whether they will exercise judgement independent of each other. Unfortunately, given the circumstances the company is in, what is supposed to be a proper search for independent directors ended up with directors who are clearly well acquainted with each other.
The company should provide more information about the search, the profile of candidates considered, and why the two individuals chosen are considered the most suitable.
