SINGAPORE companies that do not comply with regulatory standards or committed commercial crimes are not sanctioned adequately by regulators and enforcement agencies, said Amar Gill, secretary-general of the Asian Corporate Governance Association (ACGA).
He raised the collapse of Noble Group over misleading financial accounting statements, as well as the corruption scandal of Keppel’s former offshore and marine unit in Brazil as examples of a possible lack in political will to deal with corporate scandals, during a forum with board directors on Tuesday (Sep 17).
Noble was fined S$12.6 million by the Monetary Authority of Singapore in August 2022 – seven years after the short-sell report by Iceberg Research – while former employees of then-Keppel Offshore and Marine were only issued stern warnings. The company, though, paid fines totalling more than S$500 million as directed by Brazilian and United States authorities.
“The issue that we found a little bit surprising was that the penalties for companies, when they have transgressions, are not that high… The fines are not as high as it could be on some of these companies,” said Gill, who was speaking at an event organised by the Singapore Institute of Directors and Singapore Exchange Regulation (SGX RegCo).
Gill’s comments are based on a series of ACGA reports which assessed the corporate governance landscape of Asia-Pacific markets in 2023.
The research team looked at various criteria, including government and public governance, regulatory reform and enforcement, corporate governance rules, as well as engagement with investors to score each market performed.
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Singapore’s scoring in the government and public governance category in 2023 declined from the previous assessment in 2020.
In addition to the approach taken towards high-profile corporate scandals, the reports noted that there was no progress on a whistleblower law and ombudsman, or in providing a class-action framework.
The market also continues to be held back by the lack of a securities commission independent of government.
However, the reports also noted that Singapore can “play a long game on market misconduct”, as seen in authorities’ pursuit of the two culprits behind the 2013 penny stock crash. In December 2022, John Soh was sentenced to 36 years’ imprisonment and Quah Su-Ling 20 years’ jail for market manipulation that wiped S$8 billion in market capitalisation from penny stocks on SGX.
Singapore also performed well in bank governance, having a competent judiciary and for upgrading its securities-related laws.
