Hwa Hong served notice of compliance to appoint independent reviewer to review company’s board nomination process

THE Singapore Exchange (SGX) on Friday (May 6) issued Hwa Hong Corporation a notice of compliance, after the property company responded to SGX’s queries concerning the resignation of its former independent and non-executive director, Mak Lye Mun.

SGX said it requires Hwa Hong Corporation to appoint an independent reviewer to review the company’s internal controls, processes and practices relating to the board nomination process.

On Wednesday, Hwa Hong Corporation announced Mak’s cessation as independent and non-executive director, attributing the reason to a “disagreement with certain board members on the selection and appointment process of 2 new independent directors.”

In response to SGX’s queries on Thursday, the company disclosed that Mak’s statement of disagreement with “certain board members” refers to the current board members of the company, with the exception of Huang Yuan Chiang. It said: “Mak had requested the deferment of the board meeting as himself and Huang were travelling for 2 weeks and will not be able to dial in or attend the board meeting remotely. In addition, Mak was of the view that the board should consider more candidates and accord more time to the process of considering the appointment of the aforesaid 2 potential Independent Directors.” 

SGX said it has noted the circumstances leading to the resignation of Mak, with effect from 1 May 2022. In response, it requires the company to release an announcement via SGXNet no later than May 9, disclosing whether “any of the potential candidates were introduced or nominated by, or has any connections or relationships (including business relationships), with any of the directors and/or controlling shareholders of the company.”

Hwa Hong Corporation is also required to appoint independent professionals to undertake an independent review of the terms of reference of the nominating committee and the company’s internal controls, processes and practices relating to the board nomination process, SGX said. This includes the selection and appointment of the potential candidates, and to make recommendations on improvements. 

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In addition, the company must also consult the appointed independent reviewer on the proposed appointment of new directors, including any of the potential candidates, prior to the completion of the review and implementation of all recommendations, SGX added.

Shares of Hwa Hong Corporation closed flat at S$0.29 on Friday, before the announcement.