Xpress Holdings - 2 responses in the press

Subsequent to Ms Michelle Quah's article on Xpress and its auditors, Mr Christopher Chong, Chairman, Audit Committee, Xpress Holdings Limited and Mr Mak Yuen Teen, director of Corporate Governance and Financial Reporting Centre NUS Business School presented their respective views on the Jan 9/10, 2007 respectively.

Mr Chong covered the following areas in his letter:-

• He said the statement that " 'problems' began in Nov 2006 with the dismissal of Deloitte & Touche ('Deloitte')" is incorrect. He said the issue with Deloitte started in Sep 2006 and the committee reacted with increase allocation of resources to address those concerns raised. So Mr Chong, are you making an issue on the 2 month's difference?
• The statement by Ms Quah that Deloitte 'refused to pass the company's accounts' is wrong as per Mr Chong. From his response, I couldn't see what is wrong with the statement. Yes I can read from Mr Chong's letter that Xpress has taken steps to address the concerns of Deloitte. But I am also sure the brains in Deloitte must have taken all these into consideration before deciding not to complete the audit exercise.
• To be fair to Xpress, I note that it has secured help and endorsement from other experts such as RSM Nelson Wheeler in Hong Kong, KPMG Corporate Finance Pte Ltd and Foo Kon Tan Grant Thornton at an estimated cost of $500,000, in its effort to work with Deloitte.
• Mr Chong said he couldn't understand why ACRA is not agreeable to the extension request. While I may understand that ACRA or any other governmental/business entities may take the position that it is not obliged to give you a reason for rejecting your application, we should however ask whether such position is good for the maturity of Singapore's corporate scene.

Mr Mak, a recognised authority, in the field of corporate governance, came forward with the following views:-

• On the Xpress' issue with its auditors, the shareholders should direct questions at the audit committee, who has the primary responsibility on audit matters. The committee should state its views on the matters raised by the auditors, and share any plans to do to address the concerns.
• On a more a macro level, he suggests that "shareholders carefully study the independence, expertise and activities of the audit committee of companies they invest in and ask more questions about it at AGMs. Companies should consider following higher standards on matters such as the independence, expertise and frequency of meetings of the audit committee..."

Well Jan 15, 2007 is the AGM for Xpress. Perhaps we will have more daylight on the issue after "the day after tomorrow".

Till then, cheers.

Reference
- Jan 9, 2007, "Why Xpress changed auditors", Business Times, Letter to the Editor.
- Jan 10, 2007, "Ask the Xpress audit committee", Business Times, Letter to the Editor.