On 26 April 2022, Amara Holdings announced the cessation of its independent director (ID), Mr Tan Tiong Cheng. Mr Tan was the Chairman of the Remuneration Committee and a member of the Audit Committee. The cessation announcement stated the detailed reason(s) for the cessation as follows: “Mr Tan retired at the conclusion of the Annual General Meeting in accordance with Regulation 87 of the Company’s Constitution”.

Mr Tan was actually voted out at the AGM that day, after 77.69% (110,006,671 out of 141,592,275 shares) voted against his re-election. The other resolution that was not passed at the AGM was the resolution granting authority to the directors to issue shares under the Amara Performance Share Plan. For this latter resolution, only 2,446,200 shares were voted as the two executive directors (EDs) and their two siblings who are eligible to participate in the plan abstained from voting.

The cessation announcement for Mr Tan stated “yes” for the question as to whether there are any unresolved differences in opinion on material matters between the person and the board of directors. Mr Tan highlighted that “there are outstanding material issues before the Remuneration Committee which are being investigated to be resolved”.

The cessation announcement also stated “yes” for the question as to whether there is any matter in relation to the cessation that needs to be brought to the attention of shareholders. Mr Tan highlighted that: “Subsequent to 27 April 2022, there will be only one independent director, Mr Chia Kwok Ping, left and he had earlier indicated to the Chairman his desire to step down from the Board after new independent directors have been found, and so far one new independent director has accepted the appointment and 3 more must be found”.

Two months earlier, on 28 February 2022, Mr Foo Ko Hing, the lead ID had resigned, and the reason(s) for his cessation was “due to Mr Foo’s preoccupations and personal reasons”.

Therefore, all three IDs have left or will soon be leaving.

On 27 April 2022, Amara issued a clarification in response to the cessation announcement for Mr Tan. It said: “The outstanding unresolved remuneration issue referred to by Mr Tan involves the implementation of a compensation benchmarking report by a consulting firm engaged to review the compensation of senior management personnel. Mr Tan has viewed the matter as unresolved. The Board wishes to clarify that it is still under discussion and no Remuneration Committee or Board decisions have been made and needs to be followed up. Other than the aforesaid, there is no  other outstanding issue before the Remuneration Committee”.

In its clarification announcement, the company again referred to “the retirement of Mr Tan Tiong Cheng”. Is it accurate for the company to  state that he retired and not state the fact that Mr Tan was actually voted out at the AGM (for a resolution where the controlling shareholders and their associates voted on)?

It is clear that there is a disagreement over remuneration matters. In terms of disclosure of remuneration, Amara is one of the least transparent among all SGX-listed issuers.

In the corporate governance report in its 2021 annual report, it discloses the remuneration of all its directors, including non-executive directors (NEDs), on a “no name” basis in three bands of “S$500,000 to below S$750,000”, “S$250,000 to below S$500,000” and “Below S$250,000”. It shows the number of individuals in each band for 2021 and 2020. There is also no disclosure of breakdown in remuneration.

The company said: “For confidentiality reasons and given the sensitivity of remuneration information, the Company believes that the disclosure of exact remuneration of Directors with breakdown is not in the best interests of the Company and therefore it wishes to maintain confidentiality on each individual Director’s remuneration”.  This is clearly not in compliance with Provision 8.1 of the 2018 Code of Corporate Governance. It also cannot be said to be compliant with the mandatory Principle 8, which states: “The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation”.

The two EDs, Mr Albert Teo Hock Chuan and Ms Susan Teo Geok Tin, are siblings and controlling shareholders,  and another NED, Mr Lawrence Mok Kwok Wah, is their brother-in-law. What possible detriment can be caused to the company through disclosure of each director’s exact remuneration and breakdown?

Amara also refused to disclose the remuneration of the top five key management personnel individually in bands of S$250,000 as recommended by the Code, citing reasons such as “many competitors in the same industry”and “the Company is susceptible to poaching of its key management personnel in a highly competitive market place vying for talent”. It did not even disclose how many individuals are in different bands on a “no name” basis – or the aggregate remuneration paid to the top five key management personnel as recommended by the Code.

The company also disclosed that there are three employees who are immediate family members of Mr Albert Teo, and they are his brother, sister and daughter. Instead of disclosing their remuneration in bands of S$100,000 in accordance with the 2018 Code, the company disclosed that “their remuneration individually exceeded S$100,000 during the year”.

The remuneration disclosures by the company makes a mockery of the Code, especially as the EDs are controlling shareholders and several key employees are family members. Even though the remuneration of the EDs inferred from the band disclosures in the remuneration table may not appear to be excessive, the lack of proper remuneration disclosures means that minority shareholders cannot discount the risk that there may be excessive remuneration paid to family members. The fact that the Chairman of the Remuneration Committee was voted out and had cited “outstanding issues before the Remuneration Committee which are being investigated to be resolved” add to those concerns.

If companies such as Amara continue with such poor disclosures despite the principles in the Code now being mandatory, we are back to square one. SGX should consider mandating the disclosure of exact amount and breakdown of remuneration  of individual directors and the CEO through its listing rules. In most developed markets and markets such as Hong Kong and Malaysia, such disclosures are mandated through listing rules or legislation, not through codes of corporate governance based on “comply or explain”.

SGX Regco should query the company about the circumstances surrounding the exodus of IDs and pushed for more transparency in its remuneration disclosures.