Investor concerns: People walk opposite the Marina Bay skyline in Singapore. GE minority shareholders feel short-changed by controlling shareholders during takeover attempts, and that their interests are not protected by the board. — AFP
SINGAPORE: Tensions surface at Great Eastern’s (GE) AGM on April 14 when minority shareholders question the re-election of OCBC Bank chief executive officer (CEO) Helen Wong to the insurer’s board, amid the bank’s ongoing efforts to take GE private.
At the AGM, minority shareholders referred to a Jan 24 Bloomberg report that cited sources as saying that Wong had personally met several GE shareholders to convince them to sell their shares to OCBC.
The report was also published in The Straits Times (ST).
She reportedly met long-time GE shareholders Wong Hong Sun and his brother Hong Yen, as well as representatives of Lee Thor Seng and his family, to persuade them to support the bank’s attempt to buy up all the shares in GE that it does not own.
The Lee family and Wong siblings collectively hold a 3% stake in the insurer.
Minority shareholders pressed the board to confirm whether Wong had disclosed these meetings and if the board had verified the accuracy of the Bloomberg report.
GE chairman Soon Tit Koon responded that Wong had not informed the board about the meetings, which she had conducted in her capacity as OCBC CEO.
The board also did not verify the report with Wong.
“The board does not feel it is our responsibility to verify media reports,” Soon said.
He also said the board does not interfere with Wong’s work as CEO of OCBC, but emphasised that should any material issues affecting GE have surfaced, Wong would be expected to bring those issues to the board.
“It is not for the GE board to ask a director, who happens to be a CEO of a bank, concerning meetings that she might have conducted,” he said.
“From the board’s perspective, Wong is well aware of her responsibilities as a director. If there were matters that were material to GE, we would expect her to bring them to the board.”
He added that since Wong did not raise the meetings for discussion, it was assumed that nothing consequential or material to GE was discussed.
The shareholders on several occasions called on Wong, who was present at the AGM, to personally clarify whether the meetings had taken place and what was discussed in them.
However, Soon repeatedly declined on her behalf, stating that she was attending the AGM as a GE director and not as OCBC’s CEO.
He added that GE’s AGM is not the right forum for “some shareholders to question other shareholders with regard to certain media reports”.
“That is outside the scope of this meeting,” he said.
Professor Lawrence Loh, director of the Centre for Governance and Sustainability at NUS Business School, noted that in the AGM setting, directors are expected to represent the interests of shareholders, regardless of their other roles outside the company.
He added that it is common for top executives of a parent company to serve as directors on a subsidiary’s board.
Loh said it is the board’s prerogative on whether it wishes to verify the veracity of information relating to the company, noting that there were also no queries from the stock exchange regulator or the media on the matter.
“It is a matter of judgment at that point in time,” he said.
Still, the shareholders’ questions raise valid concerns over potential conflict of interest, given Wong’s dual roles in GE and OCBC.
In fact, according to GE’s 2024 annual report, directors’ fees attributable to Wong are payable to OCBC, which implies that she is acting as OCBC’s representative on GE’s board and not in a personal capacity.
Another GE director, Andrew Lee, is chairman of OCBC.
Both Wong and Andrew Lee are non-executive, non-independent directors of GE.
For its part, GE’s board said in reply to submitted questions from a shareholder ahead of the AGM that “directors with conflicts of interest will recuse themselves from discussions and decisions involving issues of conflict”.
It added that Wong recused herself from board discussions or decisions in relation to OCBC’s voluntary unconditional general offer for GE in 2024.
Wong “also abstained from the board’s deliberations on the proposal for her re-election as a director”.
Despite the shareholders questioning Wong’s suitability as a director, however, the resolution to re-elect her to the board was passed with more than 99% shareholder approval.
Still, GE’s AGM tensions reflect growing frustration among minority shareholders who feel short-changed by controlling shareholders during takeover attempts, and that their interests are not protected by the board.
Minority shareholder Ong Chin Woo told ST that the board’s actions matter given that GE is now at a “critical juncture” in its takeover by OCBC.
“The issue is why the independent directors of GE did not seek to clarify if the meetings had taken place at this critical juncture, and instead depended on Wong to report such matters to the board.
“Why were they not proactive in looking after the interests of minority investors?”
OCBC in May 2024 launched a S$1.4bil bid to privatise GE by acquiring the remaining 11.56% stake it did not own at S$25.60 per share, representing a 36.9% premium over GE’s last traded price.
Some minority shareholders, including Ong, opposed the offer, which is also 30 % below GE’s embedded value of S$36.59 as at Dec 31, 2023. — The Straits Times/ANN
