You are here
New Datapulse CEO quits; board says directors were in touch with controversial vendor two weeks before their appointment
MAINBOARD-LISTED Datapulse Technology's chief executive, Kee Swee Ann, has quit with effect from Friday, barely a month into the job.
The news came on Tuesday with a separate announcement that addressed criticism over both Datapulse's acquisition of a Malaysian personal care product business, and the role of the recently appointed board.
The board said in an after-market notice on the Singapore Exchange website that it "did not act improperly" with regard to the purchase of Wayco Manufacturing in December 2017.
The S$3.5 million acquisition of the personal care and household product manufacturer has drawn ire from the family of Datapulse co-founder and former chairman, Ng Khim Guan.
Mr Ng's daughter, Ng Bie Tjin, has launched a bid through the family investment vehicle to halt the business diversification and throw out the board.
The board has now come out to say that its decision to buy Wayco was driven in part by the possibility that Datapulse might be deemed a cash company if it ceased to have any operating business after the sale of its disk drive manufacturing site in Tai Seng.
This could leave the company facing the possibility of a trading suspension and delisting.
Datapulse's previous leadership had set up the disposal of the site - a move that will go through on Wednesday - and the company will likely have to take a breather from its manufacturing operations, as it has not been able to secure an alternative site.
The board said that that it did not act with undue haste in the Wayco deal, and denied making the acquisition decision "without having done due diligence on the asset".
Datapulse had previously told the Singapore Exchange on Dec 28, 2017 that it "did not conduct extensive due diligence" on Wayco before the acquisition, as Mr Kee was a former Way Company staff member and "is familiar with the business and operations" at Wayco.
The share purchase agreement for the acquisition was signed on Dec 12 - just one day after the board was reconstituted in the wake of third-party Ng Siew Hong's arrival on the scene as controlling shareholder.
But the board said that its members had in fact already been introduced to vendor Way Company and given information about Wayco "about two weeks prior to their appointment to the board, so they did have sufficient opportunity to review and consider before deciding to undertake the transaction".
Given a buyback undertaking that would let Datapulse return Wayco to the vendor at the same price it paid, should material adverse events crop up, the board said that the company would in such a scenario generally be "in the same position it would have been in had it conducted prior due diligence, and decide not to complete due to unsatisfactory due diligence".
The board added that "there is nothing in the applicable laws or listing rules" that would have precluded the Wayco deal on the basis of pre-existing ties among Ms Ng, Mr Kee, or Ang Kong Meng, the owner of Way Company.
As one example, the board noted: "While Ms Ng and Mr Ang has (sic) certain past and current business relationships or ties, the board has taken steps to confirm that they are not 'associates' as defined under the listing rules."
The board acknowledged that Ms Ng had introduced the board to Mr Ang and Way Company, and had thought Wayco a suitable investment target for Datapulse.
But it said that "the board did not form its decision to make the acquisition (or the terms on which it was made) purely based on the direction" of Ms Ng.
It said that it had, instead, taken into consideration "the interests of the company and shareholders" and "is acting with the interests of the company and shareholders in mind, rather than the controlling shareholder or her allies".
The board put forward its position that buying either Wayco or any other companies owned by Way Company or Mr Ang "can and should be considered so long as, inter alia, such acquisition can be justified as an arms-length commercial transaction, is within the ambit of its business mandated by shareholders, and complies with relevant laws and listing rules".
It said that, to ensure that there are proper internal controls for using and safeguarding company assets, the Datapulse management has been told not to provide funding for Wayco until the business diversification has been approved by shareholders.
The "recent events surrounding the company" have taken their toll on the health of Mr Kee, 66, said the board, which cited a pre-existing medical condition that "has taken a turn for the worse".
But Mr Kee, who is also executive director, will remain a consultant to advise and assist Datapulse on Wayco-related matters, "for such period to be mutually agreed and pending further developments".
Chief financial officer Lee Kam Seng, 64, who also goes by "Michael", will serve as interim CEO and will be in charge of the company's finances, internal controls and corporate governance-related issues.
The board said that it will consider the appointment of a permanent CEO "once there is more clarity on the future business direction and strategy" of the company.
Datapulse closed up by half a Singapore cent, or 1.41 per cent, to S$0.36, before the announcement.