Sias finds Chemical Industries’ rebuttal ‘contradictory’; requests timeline to appoint new CEO

THE Securities Investors Association (Singapore), or Sias, has responded to Chemical Industries’ Feb 18 rebuttal of minority shareholder concerns with a fresh round of queries, while also requesting that the company provide a timeline for the appointment of a new chief executive. 

The association has particularly taken issue with Chemical Industries’ statement that its co-founder and emeritus chairman, Lim Soo Peng, “does not use (the company’s) premises as his personal office”.

Sias founder and chief executive David Gerald on Wednesday (Feb 21) said a “visual inspection” conducted by Sias on Chemical Industries’ office directory showed that the company shared the fifth floor of the building with five other companies.

Gerald noted that two of these companies, namely Juta Properties and Kimia Trading, are subsidiaries of Chemical Industries.

He however highlighted that another two entities, SP Lim & Company and Eastern Rubber Company (Malaya), are owned by Lim as the sole shareholder and sole director as disclosed by the group in a 2020 filing.

Another search on the Accounting and Corporate Regulatory Authority’s (Acra) system found that a total of eight companies appear to have shared the same address as Chemical Industries at 17 Upper Circular Road, #05-00, Juta Building.

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While four of these companies had “clear links” to Lim – SP Lim & Company, SP Lim Holdings, SP Lim Trust, Eastern Rubber Company (Malaya) – Gerald underscored another entity, ELYT Investments, as also owned by Lim based on Acra’s records.

He observed that another three companies that were struck off from the records – TLGC Investments, CLYK Investments, ALYC Investments – “also seem to be associated” with Lim.

“Sias would like to seek clarifications from the board regarding its statement that Mr Lim does not use the listed company’s premises as his ‘personal office’, which appears contradictory to the findings shown above,” wrote Gerald.

“What was the board’s basis in making that statement? Otherwise, please also clarify how long this arrangement has been in place, and whether the company’s premises will continue to be utilised by Mr Lim as the registered address for his private companies.”

Gerald also asked if allowing Lim to use the address for his private companies would be considered a “private benefit”, and thus be considered as part of his remuneration.

The Sias chief executive further highlighted the issue of Chemical Industries’ company secretary, Foo Soon Soo, also serving as the secretary of SP Lim Holdings and “possibly for some of (Lim’s) other companies as well”.

On this matter he raised queries including a potential conflict of interest, a “mixing of resources” between both Chemical Industries and Lim’s personal entities, as well as Foo’s compensation for her services. 

Chemical Industries had earlier stated that it was hiring a new chief executive, having already shortlisted and interviewed certain candidates.

“As a follow-up enquiry, Sias seeks to understand the outcome of the nominating committee’s interviews with the shortlisted candidates and requests a timeline regarding the appointment of a new CEO,” said Gerald.

He also asked if the candidate would be required to go through a final round of interview with the entire board, prior to being appointed.

Further, he asked all board members of the company – especially its independent chairman and independent directors – to clarify if they reviewed and approved the company’s SGX announcements, including its Feb 18 responses to Sias and the SGX RegCo.

“Who drafted the responses and what level of due diligence did the board undertake regarding the company’s announcements on SGX?”