Datapulse slapped with SGX compliance notice, ordered to hold independent review

Singapore

AN independent review of mainboard-listed Datapulse Technology is needed - and soon, the Singapore Exchange (SGX) said on Friday.

The move is a fresh blow to the embattled Datapulse, which is facing regulatory scrutiny and a shareholder feud over a new board's allegedly hasty business acquisition.

The SGX has now slapped the company with a notice of compliance, mandating that independent professionals look at internal controls and corporate governance practices.

The reviewers must be appointed by March 9 and will have to report their findings - including recommendations for improvement - to both the SGX and Datapulse's audit committee. The Business Times understands that these reviewers will have to be approved by the SGX.

Central to the dispute is the Datapulse board's decision to buy personal care product company Wayco Manufacturing on Dec 12, 2017, the day after four new directors were appointed. It later emerged that one of the directors - then CEO Kee Swee Ann, who has since stepped down - had previously worked for businessman Ang Kong Meng, the vendor in the deal.

The board also said that members were introduced to Mr Ang by controlling shareholder Ng Siew Hong about two weeks before their appointment.

The SGX said in its notice, which was signed by head of listing compliance June Sim, that it wishes to highlight the requirement for companies to have "a robust and effective system of internal controls". It asked for the independent review to determine the facts and circumstances around the new board's approval of the Wayco acquisition.

The review should also cover the adequacy of Datapulse's internal policies, processes and procedures surrounding the evaluation and approval of mergers and acquisitions and conflict of interest, as well as processes pertaining to board appointment and nomination by shareholders.

The SGX has already asked to be told in advance of any possible acquisitions involving Mr Ang.

Datapulse last month commissioned an unrelated review of the acquisition. Ernst & Young Solutions LLP was appointed on Jan 25 to advise the company on strategic options for Wayco's business.

Datapulse ended flat at S$0.315, after the announcement.