SINGAPORE &ndash Singapore Post&rsquo s former group chief executive officer and chief financial officer said they welcome any independent inquiry into the case that led to their sacking, in a statement on Jan 3.

 

Former group CEO Vincent Phang and former CFO Vincent Yik were responding to calls from the Securities Investors Association (Singapore), or Sias, for an independent, professional inquiry into the events that led to their dismissal on Dec 21.

 

They were fired following a whistle-blowing report and internal investigations.

 

A third executive, Mr Yu Li, the CEO of the international business unit at the company, was also dismissed along with them.

 

&ldquo We would like to state that we welcome any independent inquiry, including any from other regulatory bodies or authorities, and would participate fully,&rdquo Mr Phang and Mr Yik said.

 

On Jan 2, Sias said shareholders deserve to know what exactly happened, as the sudden dismissal of three senior executives from SingPost, coupled with their vigorous denial of the allegations against them, has raised &ldquo critical questions&rdquo .

 

Mr David Gerald, Sias president and CEO, also pointed out that there are discrepancies between what SingPost said about the three executives and what the executives said about themselves.

 

These discrepancies concerned the number of times and on which occasions the executives made misrepresentations over the whistle-blowing report.

 

&ldquo We have here a fundamental difference in positions taken by the two opposing parties. (The) only way to properly resolve this is via an independent investigation,&rdquo Mr Gerald said.

 

All three executives have contested the termination of their employment, which they said was unfair and without merit.

 

SingPost said on Jan 2 that it is also open to discussions with Sias about its decision to fire the three executives after Sias&rsquo call for an inquiry, media reports said.

 

It added that it fulfilled its disclosure obligations &ldquo while being mindful not to prejudice any potential legal proceedings&rdquo , the reports said.

 

SingPost first received the whistle-blowing report on Jan 17, 2024, and investigations conducted by SingPost&rsquo s internal auditors started that day.

 

Investigations were related to people in the international business unit who had manually keyed in the &ldquo DF&rdquo (delivery failure) status code for a significant number of parcels that SingPost had agreed to deliver. The code indicated that delivery had been attempted but failed. It was, however, alleged that there were no attempts made at delivery.

 

SingPost also conducted investigations related to management&rsquo s conduct in the handling of investigations into the whistle-blowing report, which led to the firing of the three executives.

 

SingPost officially announced the firings and the whistle-blowing report on the Singapore Exchange on Dec 22, 2024.

The bank says that the sale of Famous Holdings should conclude by the end January 2025

 

BELEAGUERED national postal service provider SingPost could offer a potentially &ldquo significant&rdquo special dividend after it completes its planned sale of two business units, said Maybank on Friday (Jan 3).

 

The bank was referring to SingPost&rsquo s proposed divestment of its Australian logistics business Freight Management Holdings and its potential sale of freight forwarding business Famous Holdings.

 

Maybank says that the sale of Famous Holdings should conclude by end January 2025, which should raise between S$80 million and S$100 million in proceeds.

 

&ldquo We expect a significant special dividend after both businesses are sold,&rdquo said Maybank analyst Jarick Seet.

 

Maybank maintains its buy rating on SingPost, with a price target of S$0.77. Shares of the troubled company were at S$0.555 at the end of morning trade on Friday. They have bounced back following the company&rsquo s firing of three C-suite executives in late December. That development had caused the shares to plunge in the days after.

 

SingPost had been engaged in a tussle of words with the fired executives &ndash former group chief executive Vincent Phang, group chief financial officer Vincent Yik, and the chief executive of the company&rsquo s international business unit Li Yu. 

 

They were found to have been negligent in the handling of internal investigations over a whistle-blower&rsquo s report questions have also been raised about whether the divestment of Freight Management Holdings could be scuppered by the sackings.

 

But it will not be affected, buyer Pacific Equity Partners had told The Business Times.

Singapore Post (SingPost) announced on Dec 22 that it had terminated three of its top executives after they were found to have failed in their handling of whistle-blowing reports involving delivery performed for " one of its largest" customers, following an internal probe.

 

They are group CEO Vincent Phang, group CFO Vincent Yik and Li Yu, CEO of SingPost' s international business unit operations. Phang has also been asked to resign from SingPost' s board.

 

Phang and Yik have said they will " vigorously contest" the termination on merits and on the grounds of procedural unfairness.

 

The whole situation has since raised critical questions in the minds of shareholders, investors and the market. 

 

&ldquo The fact that they were told to leave with immediate effect points to an extremely serious breach of the rules which in turn necessitates detailed explanations. Yet it has to be said that the disclosures from the company and the responses from the three executives thus far raise more questions than provide answers,&rdquo says David Gerald, founder, president and CEO of the Securities Investors Association Singapore (SIAS).

&ldquo Shareholders deserve better and so does the market if all are to make informed decisions regarding their investments,&rdquo he adds.

 

Given the seriousness of the incident and the large number questions still circulating, SIAS strongly urges the commissioning of an independent professional inquiry into this matter. 

 

If the investigation were to be conducted by a party independent of the company and its board, these are some of the questions it should answer: 

 

1) Given the apparent severity of the claims, was the board the appropriate body to lead the investigation? 

 

2) Did the group internal audit (GIA) department have the necessary skills and expertise to objectively conduct the probe? How many staff are there in GIA? 

 

3) In SingPost&rsquo s Dec 29, 2024 announcement &ldquo Response to Comments/Queries from Stakeholders&rsquo &rsquo it stated: 

 

&ldquo In the course of these investigations, it was found that, although Phang, Yik and Li were provided with the reports and findings of, and concerns raised by, GIA which contained clear evidence substantiating the allegations by the whistleblowers, they nevertheless made serious misrepresentations concerning the whistleblowers&rsquo allegations to the Audit Committee&rsquo &rsquo . 

 

It goes further to state: &ldquo These misrepresentations, made over three occasions from Mar 11, 2024 to Apr 3, 2024, contradicted the findings in GIA&rsquo s reports and were without any independent evidence or substantiation&rsquo .&rsquo  

 

It appears therefore that the three affected individuals knew of the GIA&rsquo s findings as early as Mar 11, 2024 but nevertheless delivered false testimony three times. 

 

However, Phang and Yik in their Dec 31 release have stated that they were interviewed on only two occasions and not three between Mar 11 to Apr 3, these being on Mar 11 and Apr 3.  

 

Furthermore, they state that when they were interviewed, they were not privy to the GIA&rsquo s findings and so &ldquo responded accordingly based on the facts that were provided&rsquo &rsquo to them at the time, these facts presumably coming from the departments concerned. 

 

They further stated that it was only on Apr 27, 2024 when the external forensics team&rsquo s investigations came to light that they had full knowledge. 

 

So, how many times were Phang and Yik interviewed, was it two or three? When did these two gentlemen know of the GIA&rsquo s findings, was it Mar 11 or Apr 27? What about Mr Li? Was he interviewed two or three times? &ldquo We have here a fundamental difference in positions taken by the two opposing parties. Note that the only way to properly resolve this is via an independent investigation,&rdquo says Gerald.

 

4) Assuming that the three executives knew the GIA&rsquo s findings as early as Mar 11 and therefore knew from the start that the whistleblowing claims were substantiated, the question has to be asked: what prompted them to say otherwise, not once but two or three times?  

 

Note that the answer to this question goes to the very heart of the issue because the repeated provision of information contrary to the findings of the GIA and external investigators by the three was the main reason given for their dismissal. 

 

From the viewpoint of shareholders and the market, Phang, Yik & Li are presumably experienced and intelligent company officers. For them to collectively misrepresent practices on the ground implies they were acting in unison. Was there collusion? If so, what was their motivation? 

 

5) Who were the external senior counsel and forensics service provider engaged to help the GIA? 

 

6) Did the board consider the issue of succession when it terminated the three executives given that such abrupt action would conceivably have been forseen to leave a large leadership vacuum at a time when a significant asset sale in Australia and strategic reset are ongoing? 

 

7) The buyer of the Australian asset has said the deal is still on track. What assurance do shareholders have that a) the sale is actually still on and b) a strategic reset will still be possible, and indeed successful, given the loss of three key management personnel? 

 

8) Were alternative disciplinary measures such as suspensions, pay cuts or demotions considered instead of sacking? 

 

9) Potential litigation between SingPost and the dismissed executives may result in substantial legal costs, further eroding shareholder value. The proceedings could also damage SingPost&rsquo s reputation, potentially undermining investor confidence and the value of shareholders&rsquo investments. Is the Board prepared for this? 

 

&ldquo Many more questions are possible but these should suffice to illustrate the magnitude of the problems facing the company and its shareholders. An impartial and professional investigation is essential to address all issues, uncover the truth, and ensure justice is not only done but seen to be done,&rdquo says Gerald.

 

Retail investors, who form a significant portion of SingPost&rsquo s shareholder base, deserve assurance that corporate governance processes are fair and transparent. Only through a wholly independent inquiry can transparency, accountability, and trust in SingPost&rsquo s governance be fully restored, says SIAS.

She will oversee its Singapore and international business units and property

 

SINGAPORE Post (SingPost : S08 +1.89%) has appointed Neo Su Yin as its group chief operating officer (COO), effective Thursday (Jan 2).

 

Her appointment comes after SingPost sacked three senior executives.

 

In this newly created role, Neo will oversee the group&rsquo s Singapore and international business units and property. She will also take guidance from board chairman Simon Israel, said SingPost.

 

&ldquo The position of the group COO is a pivotal role to translate transformation into tangible results, ensuring high-quality execution, while fostering a culture of innovation and continuous improvement,&rdquo said the group.

 

It added that Neo will also work with the board in a review of the group&rsquo s international business unit.

 

Neo, 44, joined the group in April 2019 as vice-president of its customer experience department.

 

She was appointed as SingPost&rsquo s Singapore chief executive from November 2021 to April 2024. During her tenure, she oversaw enhancements across key operational areas, including last-mile delivery, digital transformation and postal operations optimisation.

 

She then moved to dnata as managing director for Singapore, overseeing ground handling and cargo operations at Changi Airport.

 

Neo is a graduate of the University of Nottingham in the UK, as well as the US Naval War College.

 

Earlier this week, SingPost appointed Isaac Mah, former finance head of Australian operations, as group chief financial officer. The group has yet to name a new CEO.

 

Parcelgate

In December, SingPost fired three of its senior executives after they were found to be negligent in the handling of internal investigations over a whistle-blower&rsquo s report that it received earlier in 2024.

 

The executives are the former group CEO Vincent Phang, group chief financial officer Vincent Yik, and CEO of the company&rsquo s international business unit Li Yu.

 

Phang was also asked to resign as a director of SingPost and all its related companies, said SingPost on Dec 22. All three executives are contesting their terminations.

 

The whistle-blower&rsquo s report was related to its non-regulated international e-commerce logistics parcels business.

 

Investigations by SingPost into the report found that three managers in the international business unit had &ldquo committed serious breaches of the company&rsquo s code of conduct&rdquo for deliveries for &ldquo one of its largest&rdquo customers.

 

They had performed or approved manual updates of the &ldquo delivery failure&rdquo (DF) status code for parcels SingPost had agreed to deliver &ndash without supporting documents and even though no delivery attempt had been made.

 

On Sunday, SingPost released a detailed account of its due process leading up to the three senior executives&rsquo termination. It also said the trio were given the opportunity to be heard before the decision was made to fire them.

 

Subsequently, Phang and Yik issued their joint statement on New Year&rsquo s Eve in response to SingPost&rsquo s detailed account of its due process.

 

They said that management had not been part of initial investigations after the whistle-blowing reports were first received, and were asked for their views on Mar 11 and Apr 3 based on limited information and context.

 

They noted that the full facts of the report were only made known to them on Apr 27.

 

Phang and Yik said a &ldquo significant majority&rdquo of the shipments with false DF codes were linked to destinations where there were known issues, such as conflict zones such as Israel.

 

They added that &ldquo it was therefore important to establish the financial impact prior to communicating with the customer as well as determining any wrongdoing by junior staff members&rdquo .

 

SingPost said all of its contracts with its customers include clauses to cover situations where it is too dangerous for SingPost to render its services, reported The Straits Times.

 

ST had queried SingPost on whether it can manually change the delivery status codes to DF for parcels bound for cities where the situation is too dangerous or expensive for delivery, without first attempting to deliver them.

 

A SingPost spokesman said &ldquo this is not a case of seeking deliveries in challenging conditions where they cannot be done&rdquo .

 

It added that the practice of falsified manual DF entries was made &ldquo even in non-conflict countries&rdquo and such practices are not in accordance with the company&rsquo s standard processes regarding status updates for deliveries.

 

More details have emerged from the abrupt firing of three top SingPost executives and more questions have been raised but Maybank Securities analyst Jarick Seet is urging investors to " ignore the noise" and " focus on the fundamentals" .

 

In the most recent development, the company on Jan 2 announced that the former CEO of its Singapore operations Neo Su Yin has rejoined the company, taking up the newly-created role of group chief operating officer. Later in the day, SIAS called for an independent inquiry. 

 

In his Jan 2 note, Seet says the company' s divestment plan is on track and that should be the focus for investors.

 

" We believe that the roadmap to return shareholder value remains unchanged which has been affirmed by the board," he says.

 

In one of its updates, SingPost' s board reaffirms that the divestment of FMH, its unit in Australia, is going ahead, with an EGM to be called by the end of February to obtain shareholders' go-ahead.

 

According to Seet' s estimates, the divestment of FMH, plus that of other assets including SingPost Centre means shareholders can potentially pocket up to 86 cents per share in proceeds.

 

" We think the downside risk is now limited and maintain a conviction ' buy' on SingPost for its asset monetisation story," says Seet, who has a 77 cents target price on this counter.

 

Singapore Post (SingPost) has appointed Neo Su Yin as its group chief operating officer (COO) effective Jan 2. The newly created role will see Neo overseeing the group&rsquo s Singapore and international business units and property. Neo will &ldquo take guidance&rdquo from SingPost&rsquo s chairman of the board, Simon Israel, amid &ldquo transitional management arrangements&rdquo .

 

Neo was previously the group&rsquo s Singapore CEO, a role she held from November 2021 to April 2024 before becoming dnata&rsquo s managing director for Singapore from May 2024 to November 2024.

 

&ldquo The board is pleased to welcome Su Yin back to SingPost as our group chief operating officer,&rdquo says Israel. &ldquo She has a proven track record and deep understanding of SingPost' s business and operations. Her appointment greatly strengthens our leadership&rsquo s focus on driving operational performance and excellence &ndash a core foundation for sustainable growth.&rdquo

 

On Dec 22, the group announced that it had sacked its group CEO Vincent Pang, group chief financial officer (CFO) Vincent Yik and Li Yu, the CEO of its international business unit operations. Phang was also asked to step down from SingPost&rsquo s board. The termination comes after the trio were said to have failed in their handling of whistleblowing reports pertaining to SingPost&rsquo s international e-commerce logistics parcels business.

All three sacked executives have said they plan to fight the terminations

 

A &ldquo SIGNIFICANT majority&rdquo of the shipments involved in Singapore Post&rsquo s : S08 +1.92%(SingPost) Parcelgate fiasco were linked to known issues like conflict zones.

 

This was the comeback from the company&rsquo s former group chief executive Vincent Phang and group chief financial officer Vincent Yik on Tuesday (Dec 31) &ndash who, along with Li Yu, head of its international business unit (IBU) &ndash were sacked for being &ldquo grossly negligent&rdquo in their handling of a whistle-blower report and subsequent investigations. 

 

SingPost had earlier found and terminated three managers in the IBU for making manual updates of the &ldquo delivery failure&rdquo status code for parcels it had agreed to deliver even though no delivery attempt was made.

 

Phang and Yik issued their joint statement on New Year&rsquo s Eve in response to SingPost&rsquo s detailed account of its due process leading up to the termination of the trio.

 

The statement said: &ldquo As we had shared in our Dec 22 statement, the management was not part of the investigation following receipt of the whistle-blowing report, in line with the company&rsquo s whistle-blowing policy. We were asked for our views on Mar 11 and Apr 3, 2024, and we responded accordingly based on the facts that were provided to us at that time.&rdquo

 

They added that the &ldquo full facts came to light&rdquo for them only after the external forensics team&rsquo s investigations established the causative correlation on Apr 27, 2024. 

 

&ldquo A significant majority of the shipments in question were linked to destinations where there were known issues &ndash such as conflict zones (for example, Israel). It was therefore important to establish the financial impact prior to communicating with the customer as well as determining any wrongdoing by junior staff members.&rdquo

 

SingPost&rsquo s earlier statements had said the trio were given the opportunity to be heard before the decision was made to fire them.

 

The national postal service provider was responding to queries following the fallout from the announcement of the terminations. 

 

Phang and Yik said the management had agreed with and followed the board&rsquo s instructions after they were briefed on the report and its findings, following the investigations by the external forensics team. A settlement with the customer was concluded. It did not have any material financial impact.

 

All three executives have said they plan to fight the terminations.

There has been intense focus among e-commerce platforms on improving customer experience and costs, especially with delivery

 

JUST days before Christmas, three Singapore Post (SingPost) executives got a rude shock when they were unceremoniously fired by the board for being &ldquo grossly negligent&rdquo in their handling of a whistle-blower report.

 

The three former key management executives &ndash group chief executive Vincent Phang, group chief financial officer Vincent Yik, and chief executive of its international business unit Li Yu &ndash were not directly involved in the allegations raised.

 

However, investigations revealed that three managers in SingPost&rsquo s international e-commerce logistics parcels business had manually updated or approved &ldquo delivery failure&rdquo (DF) status codes for parcels the group had agreed to deliver for one of its largest customers &ndash without supporting documents or delivery attempts.

 

SingPost said this was a breach of its code of conduct, and has since owned up to the e-commerce customer and paid a settlement.

 

As the Parcelgate drama unfolds, it appears the fraud allegedly carried out by these three unnamed managers was with the intention of avoiding contractual penalties.

 

In response to queries from stakeholders, SingPost said in a bourse filing that the three key executives, while not directly involved in the infringements, had made &ldquo serious representations&rdquo to the audit committee investigating the whistle-blower&rsquo s allegations.

 

These included false assertions that there was no evidence of data manipulation and wrongdoing in relation to the manual &ldquo DF&rdquo data entries that the practice of manual &ldquo DF&rdquo data entries was requested by the customer and that the customer was fully aware of the assumptions of the manual &ldquo DF&rdquo data entries.

 

They also allegedly claimed that such action was in line with industry practice.

 

All three of the key executives had earlier rejected the findings that they were &ldquo grossly negligent&rdquo and said they will contest the reasons for the termination of their employment.

 

Attempts to improve customer experience

E-commerce platforms have gone through several competitive cycles, and there has been intense focus on improving customer experience and costs &ndash especially with delivery.

 

Platforms have long obsessed over any variable that could improve customer experience and encourage bigger purchases or higher average order value. From the user interface to policies that favour the customer over the merchant, e-commerce platforms have tried it all. And delivery is one of the key customer touchpoints where market share can be won or lost.

 

Shopee, for instance, offered free shipping at the height of the e-commerce customer grab &ndash a factor that helped it take the largest market share in Singapore and the region, consultancy Momentum Works indicated.

 

Third-party logistics (3PL) players such as SingPost and Ninja Van have jumped on to the e-commerce wave by helping to deliver parcels to customers.

 

But with customers now expecting their e-commerce purchases to reach their doorstep in a day or less, there is significant pressure by platforms using 3PL players to meet that expectation.

 

Also, as volumes grew, e-commerce platforms gained more bargaining power to drive costs down. Coupled with a labour crunch and high costs of operating in a market like Singapore, 3PL players&rsquo would have found their margins squeezed.

 

These margins would have been further squeezed when e-commerce platforms started their own logistics arms to deliver a portion of the parcels themselves.

 

Interestingly, Qoo10&rsquo s logistics arm managed to survive the e-commerce platform&rsquo s demise, and has now rebranded from Qxpress to TracX Logis.

 

There is also intense competition in the 3PL segment, with big names including J& T Express, which recorded revenue of US$0.74 per parcel in South-east Asia in the first half of 2024. This was a drop from US$0.87 per parcel in the first half of 2023, due to a flexible pricing strategy to gain more market share.

 

Underlying the drop in revenue was a drop in cost of goods sold from US$0.71 in the first half of 2023 to US$0.60 in the first half of 2024, which was due to improving operational efficiency and expertise in cross-border shipping.

 

These factors are reflected in SingPost&rsquo s financial results. While SingPost does not break down revenue or cost per parcel, revenue from its e-commerce segments in the international and Singapore business has fallen in the recent results for the first half of FY2025 ended Sep 30.

 

The e-commerce revenue contribution in the international business segment fell 29.1 per cent from S$141.8 million in H1 FY2024 to S$100.5 million in H1 FY2025. In the Singapore business segment, e-commerce revenue contribution fell 10.6 per cent to S$35.5 million in H1 FY2025 from S$39.7 million in H1 FY2024.

 

SingPost also noted the increased competition in the international logistics market in its H1 FY2025 results presentation as well as lower volumes for the e-commerce segment. In the Singapore segment, the fall was attributed to a drop in one-off deliveries.

 

With e-commerce platforms looking to differentiate themselves with their customer experience, it is likely that these pressures will remain on 3PL players.

 

SingPost is not the only 3PL player suffering under these conditions competitors including NinjaVan have also decided to diversify into cold chain logistics to get better margins on the delivery business.

 

In this ongoing operating environment, 3PL players will continue to find their margins squeezed by high labour costs and lower delivery fees.

 

For SingPost, even as the Parcelgate scandal plays out, it is unlikely that e-commerce will provide the revenue to lift its fortunes.