SingPost board will ensure sale of Australia freight business, continue search for new group CEO

SINGAPORE - Singapore Post’s board of directors will work with the company’s existing management to ensure the sale of its Australia freight business is completed as planned.

In an

exchange filing

late on Dec 29, the board said it will also take into consideration the change in SingPost’s profile following a divestment of the Australia business, and the subsequent need for a review of the group’s strategy in evaluating the appointment of a new group chief executive. 

SingPost’s board said its statement was issued in response to comments and queries regarding the recent termination of the employment of three senior executives – former group chief executive officer Vincent Phang, former chief financial officer (CFO) Vincent Yik, and CEO of an international business unit (IBU) Li Yu – on Dec 21.

This came as a result of investigations into a whistle-blowing report received by SingPost in January, alleging the falsification of e-commerce shipment data at the IBU helmed by Mr Yu. The terminations were disclosed to shareholders on Dec 22.

The Straits Times

had raised concerns

that Mr Phang’s removal could delay ongoing efforts to ensure the long-term commercial viability of the postal service business, and execute a new strategy to focus on logistics for future growth.

Plans to divest non-core assets to pare debt and return excess capital to shareholders were also on the cards, including the proposed sale of the Australia freight management business to a private equity firm for A$776 million (S$656 million) in cash.

This would substantially improve the company’s financial position and make way for a potential special dividend.

Shares of SingPost closed unchanged at 52 cents on Dec 30.

In its Dec 29 statement, SingPost’s board said it will seek shareholders’ approval for the proposed divestment at an extraordinary general meeting expected to be held in February 2025.

It also reaffirmed its intent to progressively divest and unlock the value of non-core businesses and assets as its Singapore business “transitions to an asset-light, carbon-light, and higher-return model”.

In Singapore, SingPost had been finalising an operating model with the Infocomm Media Development Authority, which has oversight over local postal and parcel deliveries.

This includes plans to transition away from post offices to alternative locations and channels where customers can interact with the postal system to send, receive or manage mail and parcels.

The board noted that the transformation of the Singapore postal business is being led by the Singapore business unit’s CEO Shahrin Abdol Salam and his leadership team.

“As part of our ongoing transformation, SingPost is reviewing its customer service touchpoints to meet evolving consumer demands for postal services in a rapidly changing digital landscape.

“Adjustments will be made to some post offices and locations to ensure that postal services remain cost-effective and relevant.”

The Singapore business is also in the process of restructuring the national postal infrastructure and network to cater to the growth of e-commerce logistics, and plans to invest further in increasing capacity and improving productivity via automation.

“These investments will support the transformation of postal operations and provide a pathway for future growth in urban logistics in Singapore,” the board added.

While SingPost continues its search for a new group CEO, it intends for Mr Isaac Mah, currently the CFO of the company’s Australia business, to return to Singapore to take up the group CFO position.

“Mr Mah was identified in SingPost’s succession plan as a high-potential leadership candidate and has been on a development path within the group,” the board said in its exchange filing.

Meanwhile, Mr Gan Heng, currently south district leader at the IBU, has been appointed acting CEO of the unit.

Mr Gan joined SingPost’s Singapore business unit in 2021 before joining the IBU in September.