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SGX RegCo queries DLF Holdings on CFO's resignation
THE Singapore Exchange Regulation (SGX RegCo) on Thursday asked DLF Holdings to disclose, among other things, reasons for its chief financial officer's (CFO) resignation three months into the job, and flagged concerns over a series of key personnel departures in a short period of time.
Chong Kwang Shih's stated reason for resigning on Jan 15 was to pursue other career opportunities, and SGX RegCo queried whether there were other reasons not disclosed.
It requested for information on who would oversee the finance function and whether a new CFO had been identified, and highlighted the lateness of the announcement, which was made on the SGX website on the night of Mr Chong's last day of service. SGX RegCo also asked about his resignation date and whether he had served a notice period.
It noted that DLF has seen a series of departures of board and key management since its July 2018 listing, and asked what plans the nomination committee (NC) and board have to ensure smooth business and operations and continuity in knowledge and information of the group.
SGX RegCo also called on DLF's sponsor, NC and board to provide their views on Mr Chong's resignation and the other departures within a short period of time.
In DLF's response on Sunday, the mechanical and electrical engineering services provider said it was not aware of other reasons for Mr Chong's resignation, and the finance function would be overseen by Lu Yeen May, who joined the company as finance manager on June 11, 2019. The company is in the final stages of securing a new finance head, DLF added.
It said that Mr Chong had served one month of notice, but his resignation was uncertain because the board was trying to convince him to stay during that time. They had hoped he would change his mind and continue in his post.
DLF noted that Mr Chong's resignation has been the only executive change since its new majority shareholder QRC Pte Ltd took over late in 2019. The new board and NC were constituted on Dec 12, and as a result are unable to comment on previous departures of board and key management. DLF said that Fan Chee Seng, one of DLF's founders, and his existing management team are still involved in the company and are ensuring that the ongoing business and daily operations proceed smoothly.
DLF's sponsor said that aside from Mr Chong's resignation, which was of his own accord, the previous key personnel departures should be viewed in the context of Mr Fan acting in his capacity of a controlling shareholder in April 2019 to remove a large number of directors, and the recent change in controlling shareholder resulting in the cessation of independent directors to make way for new directors.
It said it has highlighted to DLF the urgent need to strengthen the management team to ensure continuity, which would enhance the meeting of operational and compliance requirements, and notes the current board's efforts in this respect.
DLF shares last closed at S$0.185 on Sept 5, 2019.