Raffles Education: MAS and CAD demand documents in investigation of company

Singapore two-dollar billsSingapore two-dollar bills

Correction: This item incorrectly stated which entity interviewed certain Raffles Education directors. The directors were interviewed by Singapore authorities.

Raffles Education has received a joint order from the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) of the Singapore Police Force requiring the company to provide documents for an investigation of a possible offence under the Securities and Futures Act, the company said in a filing to SGX Thursday.

The documents related to loan facilities from Affin Bank to Raffles K12 Sdn. Bhd. and Raffles Iskandar Sdn. Bhd., Raffles Education said.

In addition, on Tuesday, certain directors of the company were required to attend interviews with the authorities for the investigations, the statement Thursday said.

The directors were Chairman and CEO Chew Hua Seng, Lead Independent Non-Executive Director Lim How Teck, Non-Independent Non-Executive Director Joseph He June, Independent Non-Executive Director Ng Kwan Meng and Independent Non-Executive Director Gan Hui Tin, as well as Doris Chung Gim Lian, a director and key management of Raffles K12 and Raffles Iskandar and spouse of Chew, the filing said.

“As part of the usual procedure, they have surrendered their passports to the authorities. As at the date of this announcement, no further conditions or restrictions were imposed on the relevant individuals and none of the relevant individuals has been placed on bail, arrested or charged with any offence,” Raffles Education said.

“The company understands that the relevant individuals have cooperated, and will continue to fully cooperate with the authorities on the investigations,” Raffles Education added.

Raffles Education said the individuals would continue to serve as directors and/or executive officers. The nominating committee views its recommendation that the routine retirement and re-election of Chew and Ng Kwan Meng should proceed remains unchanged, the filing said.

Gan Hui Tan, in June, had indicated she would not seek re-election as a director, and will retire at the 30 October meeting, the filing said.

In a late August filing to SGX, Raffles Education said Affin Bank had filed writs related to alleged defaults from the borrowers’ failure to make certain repayments. The company said it had already been in talks with the bank on variation to the repayment terms, even before the writs were filed.

The company said in August it had appealed to Affin Bank for an extension of a six moratorium on the payments due to the impact of the Covid-19 pandemic, and “was given to understand” the moratorium would be extended. The borrowers believed Affin Bank did not intend to follow through with court proceedings and the writs were a strategy to obtain improved terms, the company said in August, adding it viewed the legal proceedings were “unmeritorius.” The writs have since been withdrawn.

Comments on Oei Hong Leong letter

Raffles Education also picked several bones over an open letter from substantial shareholder Oei Hong Leong criticising the company hiring Chew’s family members, saying the allegations in the letter were without evidence, baseless and misleading.

The company said it has asked Oei for an explanation for some allegation, including what it called “grossly inflated and inaccurate figures” for the family members’ salaries. Raffles Education also requested the identities of what Oei called Chew’s “unofficial” family members alleged to have been hired.

A previous article from Shenton Wire noted the discrepancy between the salaries in Raffles Education’s audited results and in Oei’s letter, as well as the lack of elaboration on what constitutes an “unofficial” family member.

Raffles Education said it had on Wednesday “written to Mr. Oei to request for an explanation of his bases for making the above allegations,” adding “in the alternative, the company invited Mr. Oei to retract such allegations.”

The company also noted that Oei sold around 52.34 million shares on 18 October, accounting for around 74.38 percent of the day’s trading volume.

Oei’s sale may have caused the stock’s around 26 percent decline that day, rather than the publication of Oei’s letter regarding the Chew family’s compensation from the company.