Commentary: Absconding CEOs show how corporate governance gaps can be better plugged

Commentary: Absconding CEOs show how corporate governance gaps can be better plugged

SINGAPORE: Absconding with a chest pounds to a tropical island for carefree days sipping pina coladas by the beach is a common movie trope. Yet, disappearing from your face of the planet is no easy accomplishment, even with an upper body of money. Nevertheless, it does happen – even in Singapore – at least until the law captures up with the absconder.

Take for instance the recent high-profile case of former Apple reseller Epicentre Holdings, whose CEO is still at large. Within a special audit record 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 weary Epicentre’s stamp.

However , these loans were neither obtained nor recorded with the company. Almost S$28 million of this kind of loans were highlighted in the report.

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

The 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 Epicentre’s is the way such malfeasance escaped the safety net of dutiful regulatory reporting, which should have uncovered such financial irregularities.

There is also the situation of  Singapore-based Three Arrows Capital , an once high-flying hedge fund whose collapse bankrupted creditors and triggered massive financial distress to investors. Reviews have said Three Arrows Capital owes its creditors US$2. 8  billion (S$3. 9 billion).

According to court documents submitted in early July, the whereabouts of co-founders Zhu Su and Kyle Davies were unknown, and they were “rumoured to get left Singapore”. After weeks of concealing, the founders told Bloomberg in a phone interview in late This summer that they went into concealing because of death dangers. Zhu Su reportedly reappeared in Asia on Aug nineteen to deliver an affidavit in person.