Last night (September 9), SPH posted answers to questions sent by shareholders for today’s EGM, including some of the questions which I sent. It shows clearly why a virtual meeting format used by SPH for this very important meeting is unsatisfactory. It took me some time to work out which of my questions SPH has tried to answer and which it has not answered at all. And there is no opportunity to follow up for clarification.

For example, among others, I asked if Credit Suisse (CS) was appointed to advise on the strategic review and as financial advisor for the restructuring at the same time.  This was not answered. My concern is that if this was the case, CS would have an incentive to recommend a restructuring rather than other options – such as continuing with the media business and improving how it is run.

For example, I had pointed out that SPH lacked board and  management members with experience in the news media and advertising businesses and perhaps restructuring its board and management could improve its prospects. Its poor performance may not be entirely due to externalities – as there are media companies which are profitable.

Now the company has disclosed that Evercore, which was appointed as financial advisor for the board for the restructuring, has also been appointed as independent financial advisor for the privatisation by Keppel Corporation. If Evercore has already been appointed as IFA for the privatisation, would it opine that the restructuring is not in the best interest of SPH shareholders?

It makes me wonder whether the board has properly considered possible conflicts or vested interests of advisors when appointing them. I think it should have appointed a specialist strategy consulting firm to assist with the strategic review first, and after evaluating the recommendations and choosing the option to pursue, then appoint advisor(s) best suited for the option chosen. Maybe it would be more costly, but we are talking about a large sum of shareholders’ money for the option chosen.

I had also laid out four options that could be considered. One of these is winding down  the media business. The company said this may incur potentially significant financial costs. So did it do a financial analysis of what the costs may be? Would it be greater than the option chosen? I would have expected the management and advisors to have done such an analysis for the board’s proper consideration. It also said that given the critical role of the media business from a “public interest” perspective, winding down is not an option. “Public interest” sounds like a good candidate for public funding. So did the SPH board decide that SPH should help co-pay for this or did the government insist that SPH should do so? This is not clear in the answers.

I also asked whether the board had considered IPC status for the new CLG, which comes with tax benefits from donations. The answer was that the CLG is not a charity and not every business qualifies as a charity. But if the CLG is serving the public, could it not qualify as a charity and possibly an IPC? My question was whether the board explored it and the answer was a mere assertion that it is not a charity and not every business qualifies as a charity.

Overall, I found the answers unsatisfactory. It is not clear to me that the board thoroughly considered all options. The format used for the EGM further reduces the accountability of the board to shareholders.