SGX probes Healthway's announcement on its director

Turns out Dr Lu Jiade had 'inaccurate declarations'.

According to a release, SGX has investigated an announcement, issued by Healthway Medical Corporation Limited (Healthway) on 14 July 2009, on the appointment of Dr Lu Jiade (Dr Lu) as an independent director.

The investigation concluded that the disclosure in the announcement was inaccurate pursuant to Catalist Rule 704(6).

The announcement failed to disclose disciplinary proceedings and actions against Dr Lu while he was practising as a doctor in the US. Dr Lu has admitted that the inaccurate declaration to Healthway and the sponsor, PrimePartners Corporate Finance Pte Ltd (PrimePartners), was an “error on his part” and arose due to his “limited corporate experience” prior to his appointment. Dr Lu had not undergone any director training during the tenure of his directorship.

SGX is of the view that Dr Lu will need to undergo and complete training on director’s duties and obligations before he seeks directorship on any SGX-listed company. Dr Lu resigned from the board of Healthway effective 22 March 2012 and was no longer a director at the time of the investigation.

The board of Healthway and PrimePartners relied significantly on the declaration from Dr Lu for the announcement, given his seniority and professional standing in established medical and academic institutions.

Under Catalist Rule 226(2)(d), the company’s sponsor is responsible for advising the company on the suitability of directors.

Healthway has agreed to review, together with PrimePartners, its board appointment process to improve its rigour and robustness. The company, together with its Sponsor, will enhance its existing director training programme consistent with the Code of Corporate Governance 2012.

SGX has also reminded PrimePartners the importance of being thorough and circumspect in assessing the suitability of board appointees of their sponsored companies.

In the disclosure-based regime, all SGX-listed companies, boards of directors and sponsors play equally important roles in upholding disclosure standards, including the accuracy of information submitted to SGX and released to the market.