SingPost: Will convene a special audit to investigate corporate governance issues flagged by The Business Times over a 2014 interested party transaction.
The auditors will report directly to the Board and the Audit Committee.
SingPost said that the independent audit will cover corporate governance and a review of the internal processes related to M&As.
The request was made by lead independent director Keith Tay Ah Kee, to which the Chairman had acceded.
Tay has also requested that the report be made available for inspection by the SGX, IDA and other regulators, as well as shareholders and other stakeholders. In addition, Tay will recuse himself from the investigation, and will cooperate fully as required.
This comes a day after SingPost admitted that it had not properly disclosed Tay’s interests in the 2014 acquisition of FS Mackenzie. Tay is also a director and shareholder of Stirling Coleman Capital, the arranger for the acquisition.
Although market watchers welcome the audit, the investigation would have its limits. For instance, the special audit might not be able to establish how Stirling Coleman became the financial adviser for several of SingPost’s acquisitions.
Until such concerns are fully addressed, the ongoing investigation could place a share price overhang on the stock.
SingPost is currently trading at 20.4x FY3/16e consensus P/E and 4.1% indicative yield.
At present, the street has 5 Buy and 3 Hold ratings on the counter with a TP of $2.18.