Absconding CEOs show how corporate governance gaps can be better plugged

Posted 4 years ago in News and Politics. 243 Views

Absconding CEOs show how corporate governance gaps can be better plugged

Absconding CEOs show how corporate governance gaps can be better plugged

Absconding with a chest of money to a tropical island for carefree days sipping pina coladas by the beach is a common movie trope. Yet, disappearing from the face of the earth is no easy feat, even with a chest of money. Nevertheless, it does happen - even in Singapore - at least until the law catches up with the absconder.

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Take for example the recent high-profile case of former Apple reseller Epicentre Holdings, whose CEO is still at large. In a special audit report on Catalist-listed Epicentre, it was said that Kenneth Lim, who is also the chairman, had arranged for loans with various external parties, some of which bore Epicentres stamp.

However, these loans were neither received nor recorded by the company. Almost S$28 million of such loans were highlighted in the report.

The plot thickened when Epicentre announced that Lim had been uncontactable since May 2019, and his whereabouts were unknown.

A Catalist-listed entity like Epicentre is subject to Catalist Rules and the obligations arising from the Code of Corporate Governance. Part of the intrigue of cases such as Epicentres is the manner in which such malfeasance escaped the safety net of dutiful regulatory reporting, which should have uncovered such financial irregularities.

There is also the case of Singapore-based Three Arrows Capital, a once high-flying hedge fund whose collapse bankrupted creditors and caused massive financial distress to investors. Reports have said Three Arrows Capital owes its creditors US$2.8 billion (S$3.9 billion).

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