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EY review finds lapses in corporate governance at Kingboard Copper Foil

Joan Ng Published on Mon, Oct 24, 2016 / 9:00 AM GMT+8

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SINGAPORE (Oct 24): Weaknesses in the maintenance of accounting records, undocumented decisions at meetings, and inaccurate announcements ó these are some of the corporate governance matters that Ernst & Young Advisory has highlighted in its report to the audit committee of Kingboard Copper Foil Holdings and to the Singapore Exchange. The company, which supplies the copper foil used in printed circuit boards, says it will put in place measures to enhance its corporate governance processes and procedures.

On Oct 11, Kingboard Copper Foil released a long-awaited report on investigation into some interested person transactions that it had entered into and its relationship with a company called Harvest Resource Management. EY was appointed in November 2011 to investigate some IPTs after allegations by minority shareholders that Kingboard Copper Foil was selling the bulk of its output to its parent group on unfair terms. Kingboard Copper Foil is 66% held by Kingboard Laminates Holdings, which in turn is 74.5% owned by Kingboard Chemical Holdings.

In January 2012, EY was also asked to assess the relations between Harvest Resource Management and the Kingboard group. After minority shareholders withheld an IPT mandate in April 2011, preventing Kingboard Copper Foil from selling its output to related companies, Kingboard Copper Foil licensed its facilities to Harvest Resource Management. Harvest Resource Management in turn sold the output from the facilities to the Kingboard group, an arrangement that circumvented the minority shareholdersí decision.