CSE Global independent director quits after clashes with chairman Eugene Lai over board refresh
Tan Chian Khong says Lai, who is also Heliconia chairman, requested his resignation from board, committee roles
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[SINGAPORE] Technology systems integrator CSE Global on Tuesday (Jun 16) disclosed the exchanges between board chairman Eugene Lai and former independent director Tan Chian Khong over corporate governance, board renewal and management oversight that led to Tan’s resignation on Jun 2.
The company, which has been on investors’ radar since a tie-up with Amazon late last year, traced the exchanges between the two men concerning the role of the company’s controlling shareholder, Heliconia Capital Management – where Lai also serves as chairman.
Tan stepped down from his positions as lead independent director, audit committee chairman and nominating committee chairman, citing a breakdown in trust and confidence.
In its response to Singapore Exchange queries on Tuesday, CSE said the differences in views between the two board members originated from a telephone conversation on May 19 and continued through subsequent written correspondence over the following weeks.
Tan said the chairman requested his resignation from the board and his committee roles during that initial call.
In a follow-up letter, Tan refused to step down, maintaining that he was elected by ordinary shareholders at the annual general meeting and was answerable to them.
He added that the request to step aside early was a breach of good governance.
Lai, who is also a board member of Temasek’s 65 Equity Partners, provided a different account of the discussion.
He said that he was sharing a view held by himself and Heliconia that the company required a board refresh.
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Specifically, he noted that the company would benefit from a lead independent director with strong mergers and acquisitions experience to manage an upcoming workload.
Lai said that he shared this transparently, so Tan could decide what was in the best interests of the company and that it was not an explicit direction to resign.
He added that he respected Tan’s right to serve his full term and that the conversation would have remained private had Tan chosen to stay.
Operational and management concerns
The correspondence also revealed divergent perspectives regarding senior management and group operations.
Tan said that he was unable to agree with what he characterised as repeated attempts by the chairman to pressure the audit committee chairman into taking punitive action against a member of senior management.
This disagreement arose from differing views on the pace of preparatory legal and due diligence work for a proposed strategic review by financial services firm Jefferies.
Tan also cited broader differences regarding the operational direction of the group and said that the chairman wanted to reconstitute the nominating committee without good reason.
Lai disputed these assertions, stating that he only reached out to share concerns and seek input regarding the employee because Tan worked closely with that individual.
He said that he did not at any time apply pressure for punitive action.
Regarding operational strategy, Lai said he was unaware of any differences until reading Tan’s resignation letter.
He also disputed the account regarding the nominating committee, noting that Tan had previously indicated a willingness to hand over his chairmanship during past board discussions.
Business operations and board governance
“The board is of the view that there has-to-date been no significant differences of views with regards to working with controlling shareholders which have had a material adverse impact on the business and operations of the company,” said CSE Global.
Addressing the potential impact on operations, CSE Global said that the disagreements have not had a material adverse effect on its business, operations, or the ability of management personnel to perform their duties.
The board added that diverse views during boardroom discussions are normal and encouraged as part of constructive debate.
To ensure independent oversight remains intact pending a replacement, the company noted that four of its seven remaining directors are independent, maintaining an independent majority on the board.
Furthermore, the majority of the nominating, remuneration, and audit and risk committees continue to comprise independent directors, in line with the code of corporate governance.
The reconstituted nominating committee is currently identifying and evaluating candidates to fill the vacant lead independent director and audit and risk committee chairman roles, said CSE.
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