Asti amends internal processes after controversy over S$1.4m payment to retrenched CEO

ASTI will put in place internal processes to ensure the future accuracy of its remuneration disclosures, following the public debacle over its S$1.4 million payout to retrenched chief executive Michael Loh Soon Gnee.

Last month, NUS Business School professor Mak Yuen Teen raised questions on the circumstances behind the payout, given that the company's Corporate Governance Report (CGR) had stated that there are no termination benefits in the employment contracts with its directors, CEO or top 5 key management personnel.

The semiconductor manufacturing services company subsequently said that Loh's contract did contain a clause on termination benefits, and the CGR was not updated. Due to errors, it had previously paid Loh only a month of annual wage supplement instead of 2, as stipulated in his employment contract. His entitlement was therefore in line with the company's remuneration policy, Asti had said.

In a Tuesday bourse filing, the company disclosed that SGX had questioned whether the company's internal controls were adequate and effective. The board responded in the affirmative, and said that the discrepancy was due to an inadvertent oversight by HR on the clauses in Loh's latest employment contract.

Asti's chief financial officer will take over the independent review function for key management compensation against their employment contracts. This is because the company retrenched its group administration officer on Nov 30.

The company will also put in place internal processes, such as key management's reviewing of the accuracy of compensation information and signing declaration forms, following which the CGR will be updated.

Asti's board became aware of the discrepancies between the disclosure in the annual report and Loh's employment contract only on Dec 23, after Prof Mak's article. It made the clarification announcement on Dec 30.

Shares of Asti closed at S$0.028 on Tuesday, down 3.45 per cent.