By Mak Yuen Teen
The current board of directors continues to try to convince shareholders (and possibly regulators) why keeping them on the board makes sense – with the carrot of a possible exit offer being dangled. If indeed an exit offer is forthcoming, it is likely to be scant consolation for the destruction in shareholder value that has been occurred over many years.
Directors may make poor business decisions and should not be held liable if those decisions were made with the best interest of the company in mind, and if they have discharged their duty to exercise reasonable diligence in making those decisions. Otherwise, they should be held fully accountable.
Shareholders of ASTI who are unconvinced about the need for the existing directors to be removed and new directors be appointed may wish to read the post I made below in December 2021.
Among other matters, they may wish to consider the following:
– the non-independent non-executive chairman has been on the board since 2011
– one of the independent directors has been on the board since 2018
– the executive director has been an executive in ASTI since 2017, so he worked under the former exec chairman/CEO for several years (he joined the board in Nov 2022)
My post summarised some of the contentious things that happened while one or more of them were with the company, including:
– the very high remuneration paid to the former exec chairman/CEO at least from FY2014 to FY2020 (the period I looked at) as the company was really struggling financially
– the decision to pay him a bonus of $8m in 2018 which was later revised to $2.182m in 2019 (the reasons for the decision to pay him $8m initially and to revise it later are not clear or convincing in my view)
– the termination payment of $1.378m paid to him in Dec 2021 even though the annual reports said there is no such entitlement (the board said it approved a change in this policy of no termination payment – when the company was laying off employees)
– when questioned by me why no shareholder approval was obtained for the termination payment pursuant to the Companies Act, the company said there was a mistake on their part in the amount stated in the FY2020 AR – the amount should have been higher and so the termination payment did not exceed his remuneration in FY2020 which would have required shareholders approval.
Changing the board would allow the new board to look into these decisions, among others, to determine if rules were followed and the directors have discharged their duties – and whether follow up actions by the new board or regulators are warranted.
