SINGAPORE: On Dec 22, Singapore Post (SingPost) plunged into its latest crisis when it announced the sudden termination of three senior executives.
The company accused group chief executive officer Vincent Phang, group chief financial officer Vincent Yik and chief executive of the company’s international business unit Li Yu of being “grossly negligent” in their handling of internal investigations into a whistleblower’s report.
All three have said that they will take steps to contest their firing, calling their sacking without merit and procedurally unfair.
SingPost’s latest crisis adds to its ongoing business challenges and leaves a vacuum in leadership as the company executes the sale of its Australian business, announced on Dec 2.
At that time, Mr Phang had said: “Once the transaction is complete, the board and management will review and reset the group’s strategic plan, with a continued focus on shareholder value.”
Mr Phang is now gone and there has been a further destruction in shareholder value, with SingPost’s share price falling nearly 11 per cent the day after the announcement.
Its share price of 52 cents as at Dec 27 is a far cry from its peak of S$2.16 in January 2015.
It is unfortunate that this is the third major controversy that has plagued SingPost over the past 20 years, not counting the operational and service issues during this period.
In March 2005, SingPost had proposed to invest in another SGX-listed company Accord Customer Care Solutions (ACCS), which had seen its share price collapse after losing almost all its Nokia contracts, and which had overstated its earnings and was under Commercial Affairs Departmentinvestigation. It was later disclosed that three SingPost directors held stakes in ACCS. One of the directors later resigned.
Ten years later, the then group CEO Wolfgang Baier abruptly resigned. The company’s corporate governance came under scrutiny. One independent director had a conflict of interest involving three companies acquired by SingPost and there were issues of lack of proper disclosure of interest.
Two other major acquisitions in the US were subsequently written off. A special audit was commissioned by the company. A string of retirements and resignations of directors and senior management followed. Four of the current directors on SingPost’s board, including the chairman, were part of the new slate of directors appointed following that scandal.
Each new scandal is another blow to its reputation. In my view, SingPost has never fully regained stakeholder trust from its earlier crises.
Last week’s developments only serve to raise more questions about SingPost’s corporate governance, including its communication, internal controls, internal audit, whistleblowing policy, investigation process, succession planning and corporate culture.
