Directors’ nationalities and seeming lack of experience with SGX-listed companies are among their concerns
[SINGAPORE] Shareholders of components manufacturer Fu Yu Corporation have raised concerns over the credentials and composition of the company’s board of directors, in the lead-up to its annual general meeting (AGM) on Apr 30.
The questions come amid a governance dispute that saw the company dismiss its group chief executive officer for “gross default and misconduct” last October.
In responses published on Friday (Apr 24), Fu Yu’s board addressed shareholder queries on the nationalities of its directors, their lack of experience serving on the boards of Singapore-listed companies, and whether their fees remained justified given three consecutive years of financial losses.
One question asked why the board comprised directors who were “foreign-sounding”, arguing that non-Singaporean directors pose a governance risk in the event of fraud as they could “easily run away from Singapore and escape liability”.
The board said that director appointments are based on qualifications, experience and expertise, as well as “ability to contribute effectively to the strategic oversight and governance of the group”. This is regardless of nationality.
“To date, the directors’ professional backgrounds and expertise have been essential in navigating our internal review and ensuring business continuity,” it added.
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It also pointed out that all directors are subject to the same fiduciary duties and statutory obligations under the Singapore Companies Act and Singapore Exchange (SGX) listing rules.
A separate question noted that many of Fu Yu’s current directors appeared to lack prior experience serving on SGX-listed company boards, and asked the group to identify which of them, if any, had this background.
The board acknowledged that such past experience is “a relevant consideration”, but said it is “not the sole criterion” for appointment.
The details of the directors’ SGX-listed company board experience, where applicable, were disclosed in their appointment announcements.
Fu Yu’s board added that the directors had attended, or would attend, relevant training sessions, and were regularly updated on their duties under applicable regulations.
Fees and shareholder alignment
Shareholders also questioned the board on whether maintaining director fees during a period of losses was consistent with shareholder alignment.
They pointed to the Fu Yu Supply Chain Solutions (FYSCS) venture as an example of management missteps that had contributed to three consecutive years of losses, and asked how the board had taken responsibility and accountability for those decisions.
The board responded that it had helped to resolve legacy issues stemming from the FYSCS episode and other matters, and cited improving operational performance as evidence of progress.
Further, the board said the proposed aggregate fees of S$232,000 for the 2026 financial year and a pro-rated S$118,615 for FY2025 were now divided among four independent directors rather than three.
This results in a per-director amount lower than the S$233,000 proposed – but not passed – at the FY2024 AGM.
The board also noted that total key management remuneration fell from S$3.27 million in FY2024 to S$2.48 million in FY2025.
No dividends have been declared for FY2025, as the company remains loss-making. Fu Yu said its dividend policy of returning at least 50 per cent of profits to shareholders remains unchanged.
Shares of Fu Yu closed at S$0.118 on Friday, up S$0.007 or 6.3 per cent, before the announcement.
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