UOB Kay Hian says ' disadvantageous' to reveal details of key management' s remuneration

It cites ' highly competitive human resource environment' as a reason

 

BROKERAGE firm UOB Kay Hian on Friday (Apr 19) said it believes that a detailed disclosure of the remuneration of its key management personnel is " disadvantageous to the business and its shareholders' interests given the " highly competitive human resource environment" it operates in.

 

The company was responding to one of the questions from the Singapore Exchange (SGX) regarding its annual report for the fiscal year ended Dec 31, 2023. UOB Kay Hian was also responding to questions it had received from shareholders ahead of its annual general meeting on Apr 25. 

 

SGX had, in its query to UOB Kay Hian, noted that the company did not disclose any details of its remuneration to the key management personnel for the fiscal year. The bourse operator asked the company to clarify how the disclosure of the aggregate remuneration paid to the top five key management persons would affect the competitiveness of the company, given that these people were not named in the annual report. 

 

SGX had also asked UOB Kay Hian to disclose this information in its response. 

 

In its reply, UOB Kay Hian said it " seeks to promote a collegiate senior team culture focused on collective performance" and wishes to minimise individual comparisons.

 

The total remuneration of the top five key management persons excluding the chief executive officer, the company said, stood at S$6.2 million. 

 

The bourse also queried UOB Kay Hian on its diversity-related disclosures and diversity approach. 

 

The company said in its response that its approach to board diversity seeks to achieve an optimal composition by ensuring that it has sufficient diversity &ndash primarily in terms of complementary skills, core competencies and experience &ndash to benefit the group and enhance its long-term success.

 

The company also said it recognises the value of the other aspects of diversity &ndash such as age and gender &ndash and strives to consider these diversity aspects in reviewing its board composition and succession without compromising the primary considerations.

 

" The board seeks to ensure sufficient diversity at all times as far as practicable and the composition of the current board meets its diversity targets," UOB Kay Hian said. 

 

UOB Kay Hian also amended a portion of its annual report after a query from SGX &ndash specifically the declaration item on whether directors who were seeking re-appointment or re-election were concerned with the management or conduct of the affairs of any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere. 

 

The company had initially put down " no" as a response to that point for both its executive chairman Wee Ee Chao and non-executive and non-independent director Tang Wee Loke.

 

The company, following the query from the bourse, amended the response to " yes" for the two directors, in light of the disciplinary actions taken against the company by the Monetary Authority of Singapore (MAS) and the Singapore Exchange Regulation (SGX RegCo) in 2022.

 

In December 2022, SGX RegCo barred UOB Kay Hian from acting as an issue manager and full sponsor for initial public offering and reverse takeover submissions on the bourse. MAS had earlier on Aug 31, 2022 fined the brokerage firm S$375,000 for business conduct compliance failures. 

 

In response to a query from a shareholder on whether the company has applied to the authorities to lift the ban, it said it was working closely with the regulators on the lifting, and will update shareholders when this has been concluded. 

 

Shareholders also asked UOB Kay Hian if there would be any implications on the company following the death of Wee Cho Yaw, and whether Wee Ee Chao' s new appointment as the chairman of Haw Par Corporation would leave him sufficient time and bandwidth to see to his duties at UOB Kay Hian. 

 

The company said there is no material impact on UOB Kay Hian from the demise of Wee Cho Yaw, and there is also no material impact on the company following the recent appointments of Wee Ee Chao. 

 

A shareholder asked the company about the risks of the structured loan receivables, participation trade payables and debts issued that are related to some referenced assets &ndash which were on the company' s balance sheet. The shareholder wanted to know what the maximum exposure was, as well as the likelihood of losses that would arise from " such complex products" . 

 

UOB Kay Hian said it conducts " proper due diligence" of every borrower, and maintains a conservative loan to value ratio for all such transactions. 

 

" This means that all such financing arrangements will always be sufficiently collateralised. Management regularly reviews the risk profile of the receivables and the balance sheet appropriately reflects the value of the receivables," the company added. 

 

SINGAPORE - Brokerage firm UOB Kay Hian (UOBKH) was on Wednesday fined $375,000 for failing to comply with business conduct requirements.

 

The firm breached the Securities and Futures (Licensing and Conduct of Business) Regulations, as well as anti-money laundering and countering the financing of terrorism (AML/CFT) requirements listed by the Monetary Authority of Singapore (MAS).

 

MAS said it had discovered during an inspection these failures, some of which include accepting third-party receipts that " represented a substantial amount of the value of an initial price offering" without conducting adequate due diligence.

 

" As a result, UOBKH failed to detect and report suspicious transactions despite red flags of potential nominee arrangements, which may be abused to conceal beneficial ownerships and facilitate market misconduct," said MAS.

 

UOBKH also failed to verify customers' source of wealth, even though they were determined by the firm to be of higher money laundering risk.

 

These culminated in breaches of MAS' AML/CFT requirements and exposed the firm to the risk of being used as a conduit for financial crime, said the authority.

 

The brokerage was found to have lacked in " sufficiently involving its compliance function" in matters of compliance, thereby compromising its effectiveness. For example, compliance officers were not required to be present at internal business and risk management forums attended by UOBKH' s senior management members, where a range of issues that could potentially result in compliance risks to UOBKH were discussed.

 

MAS also reported that the company had not carried out any internal audits on its corporate finance department since its founding in September 2012.

 

UOBKH has since paid its penalty in full and taken remedial measures to enhance its internal policies and controls, according to MAS.

 

The brokerage was also asked to appoint an independent external party to validate the implementation and effectiveness of its remediation measures and report the findings to MAS.

 

" MAS expects capital markets services licensees to comply with all business conduct and AML/CFT regulations, including ensuring... control functions act as an effective and independent line of defence against risks," said Ms Loo Siew Yee, its assistant managing director for policy, payments and financial crime.

 

" Boards and senior management of licensees should exercise strong oversight of risk management and inculcate a high level of AML/CFT and compliance risk awareness among staff."