SINGAPORE: Singapore Post fired three top executives after a probe into a whistleblower’s report found “grossly negligent” behaviour in their handling of internal investigations.
Investors reacted negatively to the news on Monday (Dec 23), with SingPost’s share price falling by more than 8 per cent to open trading at 51 cents, down sharply from Friday’s close of 56 cents.
What led to SingPost firing three top executives? Who is involved? Here’s what you need to know.
WHAT WAS THE TRIGGER?
A whistleblowing report was filed earlier this year about SingPost’s international e-commerce logistics parcel business.
In a filing on Sunday to the Singapore Exchange (SGX), where SingPost is listed, the national postal service provider said it started investigations into the matter after the report was filed.
The report alleged there were manual entries of certain delivery status codes by SingPost’s international business unit. These were for international transhipment parcels which the company had agreed to deliver under an agreement with one of its largest customers.
These manual entries were allegedly done without basis or supporting documentation and with the intention of avoiding contractual penalties under the agreement.
SingPost’s group internal audit, under its audit committee, launched an internal investigation after receiving the whistleblowing report.
An audit committee is typically a group of board members that look after a company’s financial reporting, risk management and internal controls.
After the investigation, three unidentified managers who were directly involved in the case went through disciplinary proceedings, and they were found to have committed serious breaches of the company’s code of conduct.
They performed or approved manual “delivery failure” status codes for parcels, even though no delivery attempt had been made and without supporting documents, said SingPost.
The three managers have since been sacked and a police report was made against them, it added.
WHAT LED TO TOP EXECUTIVES BEING FIRED?
A whistleblowing report on the same issue was also sent to the Infocomm Media Development Authority of Singapore, the country’s postal regulator.
CNA has asked IMDA for more information about its investigation into the whistleblowing report.
External professional advisers were also engaged to review and assess the matter independently of SingPost management.
This is because its audit committee had “no assurance” on management’s representations and handling of the internal investigations. An external law firm was engaged to review management’s conduct, said SingPost.
After the independent review, SingPost’s three senior executives were found to be “grossly negligent” in their handling of the internal investigations into the whistleblowing report and the renewal of the related agreement.
They also “omitted to consider material facts that compromised their decision-making and/or failed to perform their duties responsibly and reliably”, SingPost said in the SGX filing.
In their handling of the whistleblowing report, the three executives “accorded undue weight” to the misrepresentations by some employees in the international business unit operations.
They did so without any independent substantiation or evidence, and in turn made various serious misrepresentations to the audit committee.
The three top executives were found to have failed to exercise due diligence and breached their duties to the company.
SingPost said its board lost confidence and trust in the judgment of the three executives and their ability to perform their duties, given the seriousness of these lapses.
Disciplinary proceedings against the three concluded at the close of business on Friday, and their employment was terminated with immediate effect on Saturday.
WHO IS INVOLVED?
SingPost fired its group chief executive officer Vincent Phang, group chief financial officer Vincent Yik and chief executive of the company’s international business unit Li Yu.
Mr Phang first joined SingPost in 2019 as the CEO for postal services and Singapore, which comprises post, parcel and logistics. He was appointed group CEO of SingPost in September 2021.
According to his profile on SingPost’s website, the group expanded into Australia under his leadership and developed its cross-border e-commerce logistics business globally.
He previously held senior leadership roles at ST Logistics and Toll and is deputy chairman of the Workplace Safety and Health Council.
As a result of disciplinary proceedings, Mr Phang was also asked to resign as a director of SingPost and all its related companies as per his contractual obligations.
Before joining SingPost in December 2021, Mr Yik was CFO at OUE Lippo Healthcare.
His profile on the SingPost website shows he also previously held various key executive roles including at Far East Orchard and Australia Properties of Far East Organization, Sydney, as well as the Singapore branch of Australia & New Zealand Banking Group.
Mr Li was appointed CEO of SingPost’s international business unit in September 2022. He previously oversaw global logistics and distribution for Asia-Pacific at the United Parcel Service and has worked in North America and Shanghai.
HOW DID THEY RESPOND?
Mr Phang and Mr Yik have indicated that they will “vigorously contest” their termination, both on merits and on the grounds of procedural unfairness, said SingPost.
In a media statement on Monday morning, the two said they disagree with and are disappointed in the SingPost board’s decision to terminate their employment.
“It is our position that the termination is without merits, and was also procedurally unfair,” the statement read.
They said the independent group internal audit investigates all whistleblowing cases according to company policy.
They “dutifully presented the case to GIA to investigate, providing it with the required space and latitude to conduct its investigation”, said Mr Phang and Mr Yik in their joint statement.
“The board has stated that we had failed to consider material facts in the case. The facts unfolded over time and the causative correlation and impact was not established immediately,” they said.
“We had responded to questions based on facts that were presented to us at the time while respecting the independent investigation that was ongoing. We acted immediately once the correlation and impact had been established.”
The two men said they “categorically reject” any suggestion that they were grossly negligent, had behaved inappropriately or had sought to misrepresent facts.
“We have at all times during our tenure at SingPost acted in the best interests of the company and held ourselves to the highest standards of leadership and management, and will seek recourse against any allegations to the contrary.”
WHAT’S NEXT FOR SINGPOST?
SingPost said it would announce the appointment of a new group CEO in due course.
The current CFO of its Australian business, Mr Isaac Mah, will be the new group CFO.
In the interim, board chairman Simon Israel will “provide increased guidance to and exercise greater oversight of the senior management leadership team in the company”.
Postal services will not be affected, SingPost added.
An acting CEO will be appointed to lead the international business unit pending a board review. No appointment of a new chief executive is being proposed at this stage, said SingPost.
SingPost has also informed the customer involved about the whistleblowing report and investigation findings, and a settlement sum in lieu of penalties has been agreed upon.
Its business with the customer “has not been materially affected” and the contract was renewed following the settlement.