At the end of the last millennium, Singapore made the decision to move from a merit-based approach to a disclosure-based approach to regulation on the stock exchange. Over the last few years, it appears we have moved to an optional disclosure regime. Issuers and directors seem to believe that they can disclose what they like when they like.
The latest round of disclosure lapses involved the appointment of Mr Chng Hee Kok at Debao Property Development and his cessation at KTL Global. On 1 April, Debao announced the appointment of Mr Chng Hee Kok as independent director, chairman of the audit committee, and member of the nominating committee and remuneration committee. The appointment template indicated that Mr Chng has six present directorships and eight past directorships in listed companies. One of the past directorships listed is KTL Global.
I was surprised by this as I had thought Mr Chng is vice chairman, lead independent director, nominating committee chairman, and a member of the audit committee and remuneration committee at KTL Global. As nominating committee chairman, he recently oversaw the appointment of Wu Yongqiang as non-executive chairman of KTL Global, despite Mr Wu facing 18 lawsuits against him.
It turns out that Mr Chng had indeed resigned from KTL Global on 31 March. However, under the new optional disclosure regime, his resignation was only announced on 2 April at 7.53 pm. The announcement stated that the reason for his cessation is that “Mr Chng has new commitment and hence will not be able to devote sufficient time to the Group”. Presumably, that new commitment is his appointment at Debao.
Mr Chng was also appointed as interim chief executive officer at Chemical Industries with effect from 1 October 2021. The announcement by Chemical Industries on 28 September 2021 said that he will be appointed initially for a six-month period from 1 October 2021 to 31 March 2022, with the option of renewing his contract for another three months. The board said it would appoint an executive search firm to assist the company in looking for a permanent CEO. Chemical Industries did not announce whether Mr Chng has completed his contract on 31 March or whether his contract has been extended. It has not announced the appointment of a permanent CEO.
The appointment template for Mr Chng at Debao did not include his appointment as interim CEO at Chemical Industries under the section on working experience and occupations during the past 10 years.
Was the nominating committee of Debao which recommended his appointment, and the board which approved it, aware of the status of his appointment at Chemical Industries and his pending resignation from KTL Global? How did they satisfy themselves that Mr Chng is suitable for appointment as a director of Debao given his other commitments and his willingness to suddenly resign from KTL Global to take up his new appointment at Debao?
Based on similar disclosure lapses made by other companies, it is unlikely that any action will be taken for the disclosure lapses which I have highlighted. Therefore, we can safely conclude that we have indeed moved from a disclosure-based regime to an optional disclosure regime. Investors must now be concerned that the next stage of evolution of our market is a non-disclosure regime.
