SINGAPORE: Singapore Post said on Thursday (Jan 2) it is open to discussions with the Securities Investors Association Singapore (SIAS) about its decision to fire three top executives, after the retail investor watchdog called for an independent professional inquiry.

Last month, SingPost dismissed its group chief executive officer Vincent Phang, group chief financial officer Vincent Yik and the head of its international business unit Li Yu, over the mishandling of whistleblowing reports.

"The sudden dismissal of three senior executives from SingPost, coupled with their vigorous denial of the allegations against them, has raised critical questions in the minds of shareholders, investors and the market," SIAS president and CEO David Gerald said in a statement on Thursday.

"The fact that they were told to leave with immediate effect points to an extremely serious breach of the rules which in turn necessitates detailed explanations.

"Yet it has to be said that the disclosures from the company and the responses from the three executives thus far raise more questions than provide answers.

"Shareholders deserve better and so does the market if all are to make informed decisions regarding their investments."

Given the severity of the incident and the large number of questions "still circulating", he said the watchdog "strongly urges" the commissioning of an independent professional inquiry into the matter.

SIAS is an advocacy group for investors' rights and calls itself "the voice for minority shareholders".

In response to CNA's queries on Thursday, SingPost said it has fulfilled its disclosure obligations "while being mindful not to prejudice any potential legal proceedings".

"We have contacted SIAS and are open to discussing recent events to the extent possible given these constraints," a spokesperson said.

The association had previously asked SingPost if it would publish the key findings of its internal investigation.

In a filing on the Singapore Exchange (SGX) last Sunday, the company said that it would not do so. 

"FUNDAMENTAL DIFFERENCE"

An internal probe found a practice within the international business unit that involved manually keying in the delivery failure (DF) status code for a significant number of parcels that SingPost had agreed to deliver for one of its largest customers.

This falsely indicated that the delivery had been attempted but had failed. The whistleblowing report alleged that this was done to avoid the payment of certain contractual penalties to the customer.

Three employees from the international business unit were fired in June and police reports were made against them. 

As part of an internal probe, the management's conduct during investigations into the whistleblowing report also came under scrutiny.

The audit committee met on Mar 11 and Apr 3 to discuss the findings of the group internal audit (GIA).

According to SingPost, the three top executives made false assertions, including denying evidence of data manipulation or wrongdoing.

As the representations made by management contradicted the findings by GIA, the audit committee engaged the assistance of external legal counsel on Apr 3 and a forensics service provider on Apr 19.

All three men were sacked on Dec 21. They have said that they would contest SingPost's decision to terminate their employment, arguing that it was unfair.

On Tuesday, Mr Phang and Mr Yik said that they were not aware of the full facts of the matter when asked for their views on Mar 11 and Apr 3.

"So how many times were Messrs Phang and Yik interviewed, was it two or three? When did these two gentlemen know of the GIA’s findings, was it Mar 11 or Apr 27?" Mr Gerald asked on Thursday.

"What about Mr Li? Was he interviewed two or three times?

"We have here a fundamental difference in positions taken by the two opposing parties. Note that the only way to properly resolve this is via an independent investigation."

SIAS questioned if SingPost had considered alternative disciplinary measures such as suspensions, pay cuts or demotions instead of sacking.

"From the viewpoint of shareholders and the market, Messrs Phang, Yik and Li are presumably experienced and intelligent company officers," said Mr Gerald.

"For them to collectively misrepresent practices on the ground implies they were acting in unison. Was there collusion? If so, what was their motivation?"

He added that an independent inquiry should look into whether SingPost's board was the right body to lead the investigation, and if the GIA had the necessary skills and expertise to "objectively conduct the probe".

REPUTATION AT RISK

Mr Gerald said that potential litigation between SingPost and the dismissed executives may result in substantial legal costs, further eroding shareholder value.

The proceedings could also damage SingPost’s reputation, potentially undermining investor confidence and the value of shareholders’ investments, he added.

The SIAS CEO also raised the issue of succession at SingPost and asked if the recent sackings would affect the sale of its Australian business, Freight Management Holdings (FMH).

"Did the board consider the issue of succession when it terminated the three executives given that such abrupt action would conceivably have been foreseen to leave a large leadership vacuum at a time when a significant asset sale in Australia and strategic reset are ongoing?

"The buyer of the Australian asset has said the deal is still on track. What assurance do shareholders have that the sale is actually still on and a strategic reset will still be possible, and indeed successful, given the loss of three key management personnel?" 

SingPost said last Sunday that the sale of FMH is not expected to be affected by the sackings.

It also intends for Mr Isaac Mah, the current CFO of FMH, to return to Singapore to take up the group CFO position.

The current head of the South District International Business Unit, Mr Gan Heng, has been appointed CEO of the International Business Unit.

SingPost said it would announce the appointment of a new group CEO in due course, subject to regulatory approvals.

Mr Gerald said an "impartial and professional investigation is essential to address all issues and uncover the truth".

"Retail investors, who form a significant portion of SingPost’s shareholder base, deserve assurance that corporate governance processes are fair and transparent," he added.

"Only through a wholly independent inquiry can transparency, accountability, and trust in SingPost’s governance be fully restored."