The directors left their amidst unresolved audit matters.
The three former independent directors of Camsing Healthcare, who formed the company’s previous audit committee, defended their decisions to resign even though the audit matters they partly cited as reasons for their departure had yet to be resolved.
In a filing with the Singapore Exchange (SGX), Kenneth Chin Hock Raphael Lau, Maurice Tan Huck Liang and On Wei Jin apologised for not having consulted with the Singapore Exchange Regulation (SGX RegCo) on how to best deal with the difficulties they were facing leading up to their resignations on 20 March.
“There were several key considerations which ultimately led to our decision to resign en masse,” they explained. “First, we were of the opinion that management did not take the audit matters seriously.”
Their opinions were based on several factors, such as how as early as 7 December 2018, the auditors already had concerns with the audit, which were duly communicated to Lau. “Up until the special board meeting on 8 March 2019, the management had more than ample time of about three months to resolve the auditors’ concerns. Yet, we understand from the auditors that the management had either not responded or only given partial responses,” they explained.
Additionally, they revealed that when two special board meetings were convened solely to address the auditors’ concerns, executive chairperson Lo Chi and executive director Liu Hui did not attend. Despite being given until 15 March to respond to the auditors’ concerns, management only issued a formal response dated 18 March 2019, and sent this to the auditors on 19 March. This response was unsatisfactory to the auditors.
“We were of the opinion that management was not receptive towards our inputs on corporate-governance related issues which we provided in the discharge of our duties as the company’s independent directors,” they added. “What should have been straightforward and routine matters took months to resolve. We formed this opinion based on our past experience with management, such as our concerns and inputs regarding the $2.7m (HK$15.6m) upfront payment for BrainCo devices in October 2018.”
The three former independent directors acknowledged how their resignation appeared to be a sudden decision triggered by an adverse audit finding, and reiterated that they resigned in an effort to force management to deal with the issues “they had been avoiding for months.”
“We felt that the only way to compel the executive directors to act was to resign en masse and to address our concerns in the resignation announcements,” they said.
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