SingPost chairman exits; more changes expected

Singapore

THE pending departure of Singapore Post chairman Lim Ho Kee is just the tip of the iceberg, and more changes can be expected ahead as the postal carrier transforms itself into an e-commerce and logistics player, a company spokesman told The Business Times.

"Ho Kee is just initiating the start, there will be more announcements coming," SingPost independent director Zulkifli bin Baharudin told BT.

In a late-Friday announcement, SingPost said that Mr Lim would relinquish the chairman post on May 10. He will step down as a director at the company's annual general meeting in July.

Independent director Low Teck Seng will replace Mr Lim as chairman by a unanimous board decision.

Mr Lim cited family commitments for making the move now, and expressed hope that by giving early notice the SingPost board would have enough time to carry out a proper transition.

"Some of you would be aware that I have been planning to step down now for almost three years but had felt compelled to stay and guide management," Mr Lim wrote in a letter to the SingPost board.

The board of directors expressed gratitude for Mr Lim's years of service; he was first appointed as a SingPost director in April 1998 and has been the company's chairman since its initial public offering in 2003.

"He has led us with not just his great intellect and business acumen, but also with his heart," SingPost said. "It is difficult to think of SingPost without Lim Ho Kee."

Mr Lim's pending departure comes in the midst of controversy about the quality of corporate governance at SingPost.

The company recently appointed leadership firm Heidrick & Struggles as an independent consultant to undertake a corporate governance review after the company's December 2015 revelation that it had failed to properly disclose independent director Keith Tay's interest in a 2014 acquisition.

PwC and Drew & Napier have also been appointed to carry out a special audit to look into the matter.

Mr Zulkifli said that the issue of board renewal will take place parallel with the corporate governance review and the special audit.

Asked whether there will be more changes at the board, Mr Zulkifli said that board renewal was an issue that the directors have been looking into for a while, and more changes should be expected as SingPost tries to transform itself from its traditional business.

"We want to do a comprehensive renewal," he said. He sought to reassure stakeholders, explaining that changes are to be expected for a company in transition. SingPost's business strategy, however, remains a constant.

"In terms of the direction and the strategy going forward, there's no change," he said. "The bottom line is that our transition to e-commerce and logistics is not assured. It's fraught with risk, but it's something we have to manage and there's no guarantee we'll succeed.

"As we go along, the transition of the board members is also important, and we need to make sure the board members' skills and experience are relevant to the future. It's not easy, but you're going to see changes because it's reflective of the landscape."

In a separate announcement on Friday, SingPost also said that a planned joint venture with Indonesian mobile phone retailer Trikomsel had been called off by mutual agreement.

The joint-venture company, which was incorporated as recently as August 2015, has been dormant and will be dissolved. The termination of the deal is not expected to have any material impact on SingPost's profit or balance sheet for the year ended March 31, 2016.

Asked about the cancelled partnership, Mr Zulkifli said that it was simply a matter of the planned business no longer being a good fit for SingPost's future plans.

National University of Singapore associate professor Mak Yuen Teen, a corporate governance specialist who has been a vocal critic of SingPost's corporate governance, welcomed Mr Lim's departure, and added that he hoped Mr Tay would also step down.

Mr Tay is a shareholder and office holder at corporate finance adviser Stirling Coleman, which has acted for the sellers in at least three SingPost acquisitions in the past.

His role in those deals has come under criticism in recent months by those who say that he has too much of a conflict of interest to remain as an independent director of SingPost.

"I think Keith Tay will have to go," Prof Mak said. "He's not only long tenured, but because of the conflict of interest issue."

When asked about calls for Mr Tay to step down, a SingPost spokesman said: "This is a matter for the board and for the individual director. There is a due process and protocol to be followed."

Prof Mak said that Mr Lim's departure offered the company an opportunity to add relevant experience, such as e-commerce, to the board, as well as to implement changes such as term limits for independent directors. "Renewal will be institutionalised, that's what I'm hoping for."