SingPost error in FSM filing due to staff carelessness: Auditors

SINGAPORE — An error in a regulatory filing by Singapore Post in 2014 regarding its acquisition of United Kingdom-based freight forwarding firm FS Mackenzie (FSM) appears to have been a result of carelessness by SingPost staff, a special audit has found.

In an executive summary of the special audit report released on Tuesday (May 3), auditors PricewaterhouseCoopers (PwC) and Drew & Napier said there was “no deliberate intention to conceal” SingPost director Keith Tay’s interest in the company’s acquisition of FSM. Indeed, it was Mr Tay himself who drew SingPost’s attention to the error after the announcement was released on July 18, 2014 on the Singapore Exchange (SGX), the auditors noted.

SingPost was careful to seek external legal advice in respect of the incorrect announcement as soon as the error was discovered, and based its decision not to issue any correction on that legal advice, the auditors noted.

“Nonetheless, we are of the view that SingPost should have issued an announcement to correct or clarify the error on a timely basis… The failure to do so was not consistent with the principle underlying the Listing Rules requiring timely and accurate disclosure of information,” the auditors said.

In the event, SingPost acted on legal advice at the time and did eventually issue a corrective announcement on Dec 22 last year, they added.

“Based on our review of documents and our interviews, the error in the 18 July 2014 SGX announcement and the decision not to issue a timely correction were not borne out of any bad faith or deliberate intention to conceal Mr Tay’s interest in the FSM acquisition,” the auditors said.

The decision to conduct the special audit was announced by SingPost on Dec 22 last year after it had said in the July 2014 filing that none of its directors had an interest in the FSM acquisition. This was erroneous, as Mr Tay was the non-executive chairman and 34.5 per cent shareholder in corporate finance advisory firm Stirling Coleman, which was advising the seller in the FSM transaction.

With the completion of the special audit, Mr Tay will relinquish his position as lead independent director of SingPost with immediate effect.

Following the release of the executive summary of the special audit report, the SGX reiterated: “Directors must disclose their interests in transactions under Section 156 of the Companies Act (Cap 50) and abstain from voting on such transactions under the company’s constitution. SGX requires the constitution to include the provision that directors shall not vote in regard to proposals in which he has directly or indirectly a personal material interest as set out in Appendix 2.2 of the SGX-ST Mainboard Listing Manual.”

“The board of a company is ultimately responsible for the announcements made by the company and must not abdicate its responsibility to any professionals especially where matters under consideration are not subjective but factual in nature. A company and its board must exercise due care in drafting, reviewing and approving SGXNet announcements. Any error must be promptly escalated to the board’s attention for its deliberation and decision,” it added.