Corporate Governance Case Study Volume 9
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CPAAOM3661_A5_Corporate Governance Cover_FA.indd 1 27/10/20 9:40 am Corporate Governance Case Studies Volume nine Mak Yuen Teen, PhD, FCPA (Aust.) Editor © Mak Yuen Teen and CPA Australia Ltd, 2019-2020. All rights reserved. The reproduction, adaptation, communication or sale of these materials (‘the Materials’) is strictly prohibited unless expressly permitted under copyright laws in your jurisdiction. For permission to reproduce any part of these materials, please contact Professor Mak Yuen Teen - [email protected] or the CPA Australia Legal Business Unit - [email protected]. Disclaimer CPA Australia and Mak Yuen Teen do not provide any warranties or make representations as to the accuracy, completeness, suitability or fitness for purpose of the Materials and accept no responsibility for any acts or omissions made in reliance of the Materials. These Materials have been produced for reference purposes only and are not intended, in part or full, to constitute legal or professional advice. To the extent permitted by the applicable laws in your jurisdiction, Mak Yuen Teen and CPA Australia Ltd (including its employees, agents and consultants) exclude all liability for any loss, damage, claim, proceeding and or expense including but not limited to legal costs, indirect special or consequential loss or damage, arising from acts or omissions made in reliance of the Materials. Where any law prohibits the exclusion of such liability, Mak Yuen Teen and CPA Australia Ltd limit their respective liability to the resupply of the information. Corporate Governance Case Studies Volume Nine Editor : Mak Yuen Teen, PhD, FCPA (Aust.) Editor’s email : [email protected] Published by : CPA Australia Ltd 1 Raffles Place #31-01 One Raffles Place Singapore 048616 Website : cpaaustralia.com.au Email : [email protected] ISBN : 978-981-14-8585-5 II Contents Foreword Preface Singapore Cases Allied Technologies: Where’s Our Money? .............................................................................1 ASTI & Co: Triple Whammy .................................................................................................24 Best World: Beauty Is Only Skin Deep ................................................................................43 Camsing Healthcare: An Unhealthy State Of Affairs ............................................................61 Ezra And The Tri-Tanic ........................................................................................................79 Kimly: Kopi-O In Hot Water ...............................................................................................113 No Sign(Board) Of Governance ........................................................................................128 Y Like That? .....................................................................................................................144 Asia-Pacific Cases India’s Leading & Financial Scam ......................................................................................162 Malaysian Airlines: Bad Luck Or Poor Governance?..........................................................183 III Global Bayer-Monsanto: A “Killer” Deal ........................................................................................201 Boeing: A Plane Wreck ...................................................................................................222 Patisserie Valerie: The Missing Layer Cake .......................................................................246 PG&E: Fire In Paradise .....................................................................................................261 Samherji: The Fishing Titan-ic ...........................................................................................285 SNC-Lavalin: A Murky Past ...............................................................................................306 Thomas Overcooked It .....................................................................................................326 U.S. College Admissions Scandal: Desperate Housewives (& Husbands) ................................................................................................349 Why Didn’t Wework? ........................................................................................................367 Wirecard Gone Haywire ....................................................................................................404 IV Foreword The COVID-19 pandemic has dramatically changed and disrupted the operating environment for organisations, creating new risks that need to be managed. Coupled with other factors such as growing global trade tensions, advances in technology, and ever-increasing cyber threats, boards and senior management now have very diverse challenges on their agenda. Achieving good governance and robust risk management under these circumstances have become even more complex. The release of this 9th volume of Corporate Governance Case Studies comes at a time when COVID-19 is still defining the new business landscape. While traditional issues affecting good governance remain, the pandemic has made it crucial for companies to focus their efforts in strengthening governance. Strong leadership and sound corporate governance processes are fundamental to a company’s ability to survive and thrive. Companies are now expected to be more transparent and accountable to their stakeholders. Therefore, corporate governance structures and practices need to evolve to remain relevant and effective. Good corporate governance is more than just complying with rules and regulations or about legal duties and liabilities of directors. CPA Australia continues to play a part on the journey towards a better corporate governance culture and is privileged to have partnered Associate Professor Mak Yuen Teen FCPA (Aust.) of the NUS Business School in this successful series of corporate governance teaching case studies since 2012. We thank Professor Mak for his significant efforts in writing and editing the case studies, and the students of the NUS Business School for their work in researching the cases. We hope Corporate Governance Case Studies Volume 9 will continue to enhance discussions around governance and contribute to advancing corporate governance standards in Singapore and internationally. Chng Lay Chew FCPA (Aust.) Dr Gary Pflugrath CPA (Aust.) Melvin Yong Divisional President Executive General Manager Country Head – Singapore Policy and Advocacy – Singapore CPA Australia CPA Australia CPA Australia November 2020 V Preface When I started this partnership with CPA Australia in 2012 with the publication of Volume 1, the cases were based on abridged versions of those initially prepared by students in my course. The past eight volumes have been well received, with universities and professional bodies around the world using them in undergraduate and graduate courses, and in programs for directors, regulators and other professionals. A number of the cases and several volumes have been translated into Chinese and Vietnamese following interest from overseas markets. Starting from volume 7, we started including some full-length cases. I became more involved in writing these longer cases. Often, I have written extensive articles on the companies concerned. Abridged versions, while easily digestible, have their limitations as they may lack the necessary depth for the reader to fully appreciate the context surrounding the issues covered. As I used the abridged versions for my own course at the university and in training programs for directors, regulators and other professionals, I found that they were suitable for introductory courses in corporate governance, but may not have sufficient depth for programs targeted at more experienced executives and professionals, such as company directors. Including some shorter and longer versions will provide greater variety and choice depending on the type of programs using them. In this latest volume, many of the cases are full-length versions. This was partly a result of COVID-19, as staying home meant that I had more time to work personally on the longer versions. Some had considerable content added by me. The aim is to make the cases as comprehensive and up-to-date as possible, covering the issues in depth to allow for richer discussions. This volume contains 20 cases, with 8 Singapore cases, 2 Asia-Pacific cases, and 10 global cases. The Singapore cases include Best World which currently remains suspended, and following the release of an independent reviewer’s report, is pending further action from the company and possible regulatory action. It also includes an older case involving the Ezra group of companies, all currently still under judicial management. This case is based on a series of five articles I wrote this year. As it involves the collapse of three listed companies within the group, all with myriad issues, the case is long. The two Asia-Pacific cases include Malaysia Airlines. which had the truly unfortunate experience of two airline tragedies within a space of just over four months in 2014, resulting in the loss of more than 500 lives. The tragedies put the spotlight on risk management, crisis management and communications with stakeholders. Malaysia Airlines was subsequently privatised and had two foreign CEOs who did not stay long, also raising issues of governance of government- linked companies and politically-connected boards. One of the global cases is about Boeing, which has to deal with two airline tragedies of its own as two