SIAS clears Parkway directors over independence issue

In an extraordinary press conference, SIAS president David Gerald said Parkway independent director Richard Seow had acted correctly within the law, but asked that authorities review the laws pertaining to independent directors.

The press conference was in relation to the fact that Parkway’s chief executive officer, executive vice-chairman and vice-chairman had entered into a co-investment agreement with Fortis in March to secure the retention of their respective roles in the takeover of Asia’s largest healthcare chain, yet Richard Seow remains on the board as an independent director.

The question raised in some quarters was whether Seow could still fulfil his fiduciary duties as an independent director given that he had entered into relation with the takeover suitor to vote a certain way. It is a contentious issue, and one which has concerned investors in Singapore.

Following their arrangement becoming public, the three directors on the board of Parkway told the Singapore Stock Exchange that the agreement did not prevent them from taking independent decisions in the interest of the company. The communiqué was signed jointly by Richard Seow, Parkway vice-chairman, the company’s executive vice-chairman Lim Cheok Peng and CEO Tan See Leng.

They said, "In general, we have agreed to vote with Fortis as shareholders of the company." Given that both Khazanah and Fortis are engaged in a bidding war for control of Parkway, some analysts have posed that this violates corporate governance rules in Singapore.

Said Seow: "Fortis cannot direct any of us to vote against our fiduciary duty. Our economic payout is not determined by whether we vote with Fortis… We have a fiduciary out. You can express your desire to me, but I have a free pass, I will vote however I like. There are two parts - as a shareholder and as a director."

On whether Fortis can direct Mr Seow as a director of the company, as opposed as a shareholder, Mr Seow had this to say, "Someone can direct me but I am not good at taking these kind of directions."

SIAS President David Gerald said: "SIAS would like to take this position going forward.. there must be independence from major shareholders.. like in the UK. In the marketplace there is misperception, but there is no evidence here they have breached the spirit of the law.. and they have acted properly and within the spirit of the law."

Watch the video here.