Questioning Singapore's corporate governance standards

Questioning Singapore's corporate governance standards

The Edge Singapore
29/06/18, 11:21 am

SINGAPORE (June 29): Poor corporate governance recently became an issue at a number of locally listed companies, both large and small.

Rig builder Keppel Corp was found to have paid bribes to secure contracts in Brazil.

Commodity supply chain manager Noble Group has posted massive write-downs on values it had previously defended vigorously.

And Datapulse Technology, an optical disc maker, bought a shampoo business without proper due diligence.

Midas Holdings on Feb 8 announced that severe financial irregularities had been uncovered. Its shares have been suspended from trading shareholders may see their holdings wiped out.

See: Irregularities uncovered in Midas' Dalian subsidiary implicate former top executives

See: Midas CEO Patrick Chew quits; stamp was used without his approval to take out loans

The Singapore market shifted to a disclosure regime in the late 1990s with “comply or explain” rules. Companies are obliged to disseminate accurate and timely information to investors, who are then responsible for their own investment decisions.

The Singapore Exchange and Monetary Authority of Singapore (MAS) both have regulatory duties, although only MAS has the power to investigate and bring a court action for market misconduct under a civil penalty regime. The civil penalty regime complements the criminal penalty regime administered by the Commercial Affairs Department.

Directors have in the past been reprimanded, charged, fined or otherwise penalised for lapses in corporate governance. But some say disclosure lapses are still largely unpunished and directors rarely investigated.

Just who should be accountable for wrongdoings when they occur?

Some market observers have placed the blame on intermediaries such as auditors and advisers who produce information that shareholders rely on.

Can the Singapore market’s reputation be fixed? What needs to be done?

In our cover story of The Edge Singapore this week (Issue 826), "Ticked off", we discuss Singapore’s disclosure regime and what makes for a well-governed company.

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