On Thursday (23 April), Workers’ Party Non-Constituency Member of Parliament (NCMP) Dennis Tan Lip Fong took to his Facebook, voicing his concern on the issue of corporate governance of companies in Singapore.
Citing the news report from The Straits Times on the oil trader Hin Leong who hid about US$800 million in losses earlier this week, Mr Tan, who is also a shipping lawyer, said that this news has been circulated in the maritime industry last week.
He added, “A household name to many of us in the maritime industry, many have dealt with the company in one way or other.”
To this, Mr Tan mentioned that he had called out the Government to strengthen the corporate governance of companies in the Parliament over the last two years.
In 2019, he spoke out regarding the corporate governance in companies. He wrote in his post, “I had mentioned the Swiber and Keppel prosecutions (and we are still waiting for the outcome of the investigations for these two cases, in case you are wondering) and the Hyflux case.”
He said in the Parliament that it is inadequate for the current oversight processes and regime on the cases of corporate governance.
“In some of these cases, the problems reported seemed to have escaped the attention of their auditors or the problems have not been commented upon by their auditors.
“In cases where the executive management of a company or its board is aware of serious malfeasances or malpractices, or is not aware of such malfeasances but ought to be aware, the buck should never stop anywhere below executive management and its board,” he said.
As such, he had urged the regulators to be more proactive to take account of the errant or neglectful directors if they fail in their duties and obligations.
Noting that the Government should be responsible for improving corporate governance regime, he suggested last year that an independent taskforce is required for evaluating the need for a government agency to provide oversight on corporate governance standards and to improve audit quality.
Meanwhile in 2018, under his speech titled “Anti-Corruption Measures for Companies”, Mr Tan also called out the Government to review and enhance existing company regulations as well as requirements for whistle blowing policies in companies and the independence of the board.
With such reviewing and enhancement, he said all listed companies should establish appropriate policy on anti-corruption measures and other improprieties.
Besides, Mr Tan also suggested the Government to consider inspecting and imposing penalties against the companies, directors and audit committee members for non-compliance issues.
He had asked the Government to follow the principle of Norwegian company law, where a company has controlling shareholders, the independence of the board is principally intended to protect minority shareholders.
“So, for example, an independent director to our government linked companies should have no past or present political affiliation to the ruling party or occupational affiliation to the public service,” he added.
As Hin Leong, the oil trading company is not a listed company, Mr Tan in his post noted that of his suggestions, some were intended for listed companies while there are still “useful applications” for non-listed companies, such as the issue of audit, whistle blowing from employees, and call for more proactive regulator
“I will leave it to others to see for themselves what are the regulatory changes made in the past 2 years,” he wrote.
Earlier, the oil trading company Hin Leong has been reported covered up US$800 million (S$1139.38 million) losses of incurred losses in futures trading from its creditors.
According to the source, several lenders stopped providing their line of credit in early April due to worries over Hin Leong’s ability to repay its debt as the company experienced financial trouble.
It was said that the oil trader has owed almost US$4 billion (S$5.70 billion) to more than 20 banks.
This suggests a larger financial mess than expected before, the sources added.