ComfortDelGro's shareholders reject Deloitte as auditor

THE shareholders of ComfortDelGro have rejected its auditors after a majority did not vote for their re-appointment during the transport operator's annual general meeting (AGM) on Friday (Apr 29), an outcome that disappointed the company's board.

Announcing this in a bourse filing on the same day, ComfortDelGro said that Deloitte & Touche would no longer be the auditors of the company from Apr 29, 2022.

"The board and management wish to express their disappointment at this outcome but will respect shareholders’ decision," read ComfortDelGro's update on its AGM.  

"The company would like to record its appreciation to Deloitte for its service through the years. Deloitte has always discharged its responsibilities well and duties professionally, and the board and management have had no issues with them," it added.

A report from the Institutional Shareholder Services (ISS) noted that proxy advisers recommended that shareholders vote against the re-appointment of Deloitte as its remuneration for advisory work last year to list ComfortDelGro's Australian business, which is considered non-audit fees, had exceeded the limit of 50 per cent of the annual audit fee in a particular year.

ISS said ComfortDelGro had paid "excessive fees" to its audit firm for non-audit services, which pose a potential conflict of interest. As the audit committee members are responsible for the selection of the independent auditor, ISS said a vote against the re-election of these committee members was warranted.

It also recommended voting against fixing the auditors' remuneration, noting that the non-audit fees paid to the firms last fiscal year exceeded the total audit fees "without satisfactory explanation".

ComfortDelGro said it will start searching for new auditors and seek shareholders’ approval on their appointment.

That said, ISS recommended voting against the re-appointment of Chiang Chie Foo only, as the other 2 members are relatively new and have not had the opportunity to attend an audit committee meeting.

Separately, 3 directors have retired from its board.

Wang Kai Yuen had expressed his wish to not seek re-election at the AGM and retired as a non-independent non-executive director of the company, after serving on the board since 2003. He was also a former Member of Parliament for the Bukit Timah ward between 1984 and 2006.

Chiang Chie Foo had also expressed his wish to not seek re-election at the AGM and retired as an independent non-executive director. He had served on the board for 4 years. 

Kyle Lee Khai Fatt retired as an independent non-executive director of the company to focus on his personal projects and activities after serving on the board over the last 5 years. 

Shares of ComfortDelGro closed unchanged at S$1.47 on Friday.