SingPost details 'serious misrepresentations' by 3 former senior executives over whistleblower report

Singapore Post Limited (SingPost) detailed the investigation and disciplinary processes that led to the firing of three senior executives.

This response, published on Dec. 29, addressed comments and queries on the termination of SingPost's group chief executive (CEO) Vincent Phang, group chief financial officer (CFO) Vincent Yik, and chief executive of the company's international business unit (IBU) Li Yu.

The former CEO and CFO previously said on Dec. 23 that their termination was "without merits" and "procedurally unfair".

Li also said he was disappointed by SingPost’s decision to terminate him and “aggrieved that the company has thought it fit to levy such allegations” on Dec. 24.

However, SingPost stated on Dec. 29 that "appropriate diligence was undertaken and the opportunity to be heard was given to the affected parties".

It also added that the objective of its Board of Directors throughout the process was to "act in the best interests of the company and its shareholders by upholding a high level of governance".

“This incident underscores the importance of a robust whistleblowing process within the governance framework. It ensures employees feel protected when coming forward, and assured that their allegations will be addressed impartially and effectively,” said Simon Israel, Chairman of the Board of SingPost in a statement to the media that accompanied the response.

Whistleblower reports made in January and February 2024

SingPost outlined the whole timeline of the investigation and disciplinary process, breaking it down into two phases.

In January 2024, SingPost received the first whistleblowing report about the group's international e-commerce logistics parcel business.

SingPost received a second report in February 2024.

SingPost said the Info-communications Media Development Authority of Singapore (IMDA) was copied on the report, but noted that "the matter had no impact on local postal and parcel deliveries over which IMDA has oversight".

During the first phase of investigations, it was revealed that within the IBU operations, there was a practice of manually keying in the "DF" (delivery failure) status code for a significant number of parcels which SingPost had agreed to deliver.

The "DF" status code falsely indicated that delivery had been attempted.

SingPost explained that a "DF" status code is a valid status code because it indicates that SingPost tried to make the delivery, which would count towards certain key performance indicators.

The whistleblowing reports alleged that the manual "DF" entries were being made to avoid payment of certain contractual penalties to the customer.

At that stage, the allegations were not publicly disclosed as the report was submitted in confidence and was pending investigations.

SingPost's investigation into the reports

SingPost's Group Internal Audit (GIA) department led an investigation into the report, with oversight from the Audit Committee.

It found that SingPost was liable to pay contractual penalties for not meeting specified service level requirements, and for false data entries.

As the GIA's findings contradicted what SingPost's management said on the issue, the Audit Committee engaged external legal counsel and a forensics service provider to independently review the matter and give their advice.

After this was done, SingPost said it "confirmed" GIA's finding that the practice of manual "DF" entries was done to avoid contractual penalties.

SingPost also revealed that its Board of Directors instructed the management to make "the appropriate disclosure" to the customer, and the customer was informed.

SingPost and the customer then agreed on a settlement, though SingPost said its terms are confidential.

Disciplinary proceedings against operations staff

On May 6, disciplinary proceedings were held against three staff from IBU operations, and the staff were allowed to respond to the misconduct allegations.

The three were later terminated, and while they submitted claims against SingPost to challenge the termination, the claims were eventually withdrawn or not proceeded with.

SingPost then filed a police report against the trio.

At that point, SingPost stated that the investigations had determined that the issue was isolated and limited to the specific customer and the practices of the three terminated staff members.

The practice of manual "DF" data entries was stopped, and corrective action was taken to prevent similar occurrences and address all relevant operational gaps.

In addition, the settlement with the customer had no material financial impact, SingPost said, adding that its business with the customer "was not materially affected", and that the contract was renewed in August 2024.

"The assessment therefore was that no announcement was required at this stage," said SingPost.

It added that the incident was "nevertheless reported as a substantiated case relating to fraud" on two pages of its FY2023/24 Sustainability Report.

The report mentions "two substantiated cases" and said "appropriate actions" were taken.

Management's conduct

SingPost also outlined the second phase of its investigations, detailing its management's conduct in handling the whistleblowing reports, though they were not directly involved in the allegations raised in the reports.

During investigations, it was found that while Phang, Yik, and Li were provided with reports and findings, they made serious misrepresentations concerning the whistleblowers' allegations to the Audit Committee.

SingPost said that their false statements included:

• There was no evidence of data manipulation and wrongdoing regarding the manual "DF" data entries.
• There was no evidence of falsification for the purposes of avoiding penalities.
• The purpose of the manual "DF" data entries was not to avoid contractual penalties.
• The practice of manual "DF" data entries itself would not attract any liabilities.
• The practice of manual "DF" data entries was requested by the customer.
• The customer was fully aware of the assumptions of the manual "DF" data entries, and such practice was said to be in line with industry practice.

These misrepresentations, made over three occasions from Mar. 11 to Apr. 3, contradicted the findings in GIA's reports and were made without any independent evidence or substantiation.

SingPost said:

"Mr Phang, Mr Yik and Mr Li were formerly the top management executives of the company and were expected to protect the interests of the company at all times. However, instead of addressing their minds to the findings by GIA (which contained clear evidence that the purpose of the manual “DF” data entries was to avoid the payment of contractual penalties to the relevant customer), Mr Phang, Mr Yik and Mr Li relied on the misrepresentations made by representative(s) from IBU Ops (who were interested parties)."

SingPost added that the misrepresentations "effectively undermined GIA" which was responsible for investigating whistleblower incidents, saying:

"The Board notes that if the Audit Committee had relied on and accepted the misrepresentations by Mr Phang, Mr Yik and Mr Li over GIA’s findings, the practice of the false manual 'DF' data entries which were intended to avoid contractual penalties would likely have continued."

On Nov. 11, 2024, disciplinary proceedings commenced against the three senior executives.

The disciplinary proceedings concluded on Dec. 20, and it was determined that the severity of their misconduct warranted disciplinary action that led to their dismissal.

Before deciding this, the board of directors sought and obtained a second opinion on the matter from a senior counsel at a "leading law firm", and SingPost said this was "to further ensure fairness and independence".

On Dec. 22, it was announced that Phang, Yik and Li were fired from SingPost.

Leadership succession

Following the termination of Phang, Yik and Li, Isaac Mah, the CFO of SingPost's Australia business, will return to Singapore to take up Yik's spot.

Gan Heng, who currently heads SingPost's South District International Business Unit, has been appointed as acting CEO of IBU.

SingPost said it will announce the appointment of its new CEO in due course.

Challenge termination

On Dec. 23, it was reported that Phang and Yik refuted the reasons given for their sacking.

The pair said in a statement to the media on Dec. 23 that their termination over a whistleblower’s report is "without merits, and was also procedurally unfair".

They also "categorically reject" any suggestion that they were "grossly negligent".

Li, in a Dec. 24 statement on his LinkedIn page, also said the decision to terminate his employment was "without merit", and that he would "take affirmative steps" to contest his termination.

He said he was disappointed by SingPost’s decision to terminate him and “aggrieved that the company has thought it fit to levy such allegations”.

Related story

Top photos via SingPost