Performance bonus spat may be just the tip of an iceberg

ON July 10, the two independent directors (IDs) of Lian Beng - Sitoh Yih Pin and Wan Soon Bee - resigned, citing "differences in opinion from the management over certain company affairs". Both had been on the board since the company's initial public offering in 1999.

The Singapore Exchange (SGX) queried Lian Beng twice following the resignation announcements. The company's first response on July 14 disclosed that the differences in opinion were about the computation of the performance bonus of the three executive directors (EDs) - the chairman and managing director (MD), Ong Pang Aik, and his siblings, Ong Lay Huan and Ong Lay Koon.

According to the company, service agreements signed with the EDs since the company's listing in 1999 stipulated that the performance bonus is based on "net profits of the group before tax and before extraordinary items as reflected in the audited accounts of the group". This has been interpreted as group net profit before tax and before minority interest over the years.