May (US) A study of 322 institutional investors across 19 countries, conducted by US-based consultancy Institutional

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1 May 2006 Institutional Investors Focus On Corporate Governance Criminal Charges And Civil Suit Filed Against Former NKF CEO And Former Directors Toshiba Executives Face Pay Cuts For Falsification Of Data Executives of Shin Corp And AIS Cleared Of Insider Trading Swissco Sets Directorship Limit For Board Former Airocean CEO Charged With Graft Trek 2000 Fined For Breaching Disclosure Rules Company Director Involved In Citiraya Case Sentenced To 45 Months In Prison Former Brilliant MD Fined And Sentenced To One Day In Prison Institutional Investors Focus On Corporate Governance (US) A study of 322 institutional investors across 19 countries, conducted by US-based consultancy Institutional Shareholder Services, has found an increase in global institutional interest in corporate governance. The study, entitled 2006 ISS Global Institutional Investor Study, found that 90 percent of Chinese investors and 88 percent of Japanese investors assign greater importance to corporate governance issues than their counterparts in countries such as the US, Britain or Australia. Eighty percent of the institutions in China nominated risk management as the most important advantage of corporate governance. In Japan, 80 percent cited enhanced returns as the main advantage. In more established markets, risk management is not a major institutional concern only 4 percent, 22 percent and 36 percent of investors in the US, Britain and Australia respectively felt that risk management is the most important advantage of corporate governance. Enhanced returns were generally regarded as the major benefit in these markets. The report also said that above all, investors want better company board structures, aligned executive pay, improved disclosure and CEO performance. ~ Adapted from Institutions muscle up over governance, 20 April 2006; Investors focus on governance issues, www. theage.com.au, 20 April 2006; Corp governance now a mainstream business imperative, 21 April 2006.

2 Toshiba Executives Face Pay Cuts For Falsification Of Data (TOKYO) Top executives of Japanese electronics group Toshiba, including its president Atsutoshi Nishida, will be facing a 20 per cent pay cut for three months after an internal investigation found that employees had falsified data on equipment provided to three nuclear and seven electric power plants. The data falsification was revealed when a whistleblower told Tokyo Power Plant (Tepco) in January that Toshiba had provided incorrect test data on equipment supplied to the company's nuclear power plant in Fukushima. Days later, it was revealed that data had been altered at another plant, which prompted the industry regulator to order an internal investigation by Toshiba and Tepco. Toshiba said that it took the matter seriously and would revise its labour contract to make such inappropriate behaviour punishable. It also admitted that the company had insufficient checks in place to ensure that such falsification did not occur. ~ Adapted from Toshiba executives penalised over data, Financial Times, 12 April Swissco Sets Directorship Limit For Board (SINGAPORE) In what is considered to be a first on the Singapore Exchange, the board of marine-based, Sesdaqlisted Swissco International has formally decided that none of its members can hold more than five directorships in listed companies. According to CEO Alex Yeo, this is to ensure that directors have sufficient time and attention to contribute to the organisation. Even though there are no formal guidelines on the number of directorships in listed companies a person may hold, there are practical limits on how many companies a person can cope with, said an exchange source. The Singapore Exchange is said to be scrutinising more thoroughly the number of seats an independent director holds in companies wanting to list on the Exchange. It is said that there were instances when persons deemed by the Exchange to be holding too many directorships have had to step down from a company seeking listing. ~ Adapted from Swissco board has directorship limit, Business Times Singapore, 20 April Trek 2000 Fined For Breaching Disclosure Rules (SINGAPORE) The Monetary Authority of Singapore (MAS) has fined mainboard-listed thumb-drive maker Trek 2000 International $75,000 for contravening continuous disclosure requirements under the Securities and Futures Act. This is the first time that MAS has used a civil penalty against a company for breaching disclosure rules. The breach was in relation to the company's failure to promptly announce an earnings projection in accordance with listing rules. Trek has said that CEO Henn Tan has volunteered and will personally bear the civil penalty on behalf of the company. MAS initiated an investigation against Trek in February following a public reprimand of the company by the Singapore Exchange for making selective disclosures through the media. ~ Adapted from MAS fines Trek 2000 $75,000 for rule breach, Business Times Singapore, 5 April 2006.

3 Criminal Charges And Civil Suit Filed Against Former NKF CEO And Former Directors (SINGAPORE) The Corrupt Practices Investigation Bureau (CPIB) has charged former National Kidney Foundation (NKF) CEO TT Durai with two counts under the anti-graft Act of submitting to the NKF false invoices between 2003 and 2004 for various consultancy services which were never rendered with the intention to deceive the foundation. The CPIB also charged Ragini Vijayalingam, former assistant manager of the charity's purchasing department, with accepting more than $10,000 of gratifications in exchange for helping a medical supplies company secure various contracts to supply medical products to the NKF. In addition, the Commercial Affairs Department (CAD) filed charges against NKF's former chairman Richard Yong and former treasurer Loo Say San with one count each of breaching Section 157 of the Companies Act for failure to use reasonable diligence in the discharge of their duties as officers of the charity, causing NKF to excessively pay software developer Forte Systems. Meanwhile, NKF has filed a civil suit against Durai, Loo, Yong and former board member Matilda Chua to recover money allegedly improperly paid or used by them. NKF said that its action against the former CEO and former board members was based on alleged breach of fiduciary duties owed to the charity. The charity is seeking damages, including salaries and bonuses paid to former officers as well as money paid to third parties, and compensation for loss of goodwill and damage to its reputation. Durai and Chua are currently out on bail of $50,000 and $20,000 respectively. ~ Adapted from Ex-NKF chief Durai charged with graft, Business Times Singapore, 19 April 2006; NKF suing Durai, others to recover money, Business Times Singapore, 25 April Executives of Shin Corp And AIS Cleared Of Insider Trading (BANGKOK) The management and directors of Thai telecoms conglomerate Shin Corp and its 43 per cent owned subsidiary Advanced Info Services (AIS) have been cleared of any wrongdoing following an investigation by the Stock Exchange of Thailand (SET) into possible insider trading when the companies were sold to Temasek Holdings of Singapore. In filings reported to the Thai Securities and Exchange Commission (SEC), it was shown that some executives had sold their shares during a period when rumours were circulating that Shin Corp will be acquired by a foreign investor. The SET had looked back 30 days prior to the Jan 23 announcement of the sale to Temasek and had found that there was no wrongdoing. It had also looked at dealings which accounted for more than 10 per cent of the daily turnover of shares in the two companies and found that none of the executives had been actively involved in the share trade. Additionally, the SET had investigated trading on foreign exchanges and had not discovered anything which would implicate any of the executives. It was noted that the SET did not have the authority to investigate whether foreign companies were acting as proxies for the management or board members, although the SEC did have such powers. The SET had forwarded its findings to the SEC for further

4 investigation. ~ Adapted from Shin Corp, AIS execs cleared of insider trading, Business Times Singapore, 7 April Former Airocean CEO Charged With Graft (SINGAPORE) Thomas Tay, former chief executive of troubled air cargo logistics company Airocean, has been charged under Section 6 (b) of the Prevention of Corruption Act for using corrupt means to bid for a contract with low-cost airline Jetstar Asia. This sections says anyone who uses corrupt means to induce or reward an agent to do or not to do something, in relation to his principal's affairs or business, is guilty of an offence. A convicted person can be fined up to $100,000 and/or jailed up to five years. The Corrupt Practices Investigation Bureau (CPIB) had received information alleging corruption involving Tay in 2004 when he was still the company's CEO. Upon investigation, the CPIB alleges that Tay had offered a gratification in the form of a favour or advantage through an officer of an Airocean subsidiary, Airline GSA Holdings to Jetstar's head of commercial, Chooi Yee- Chong, to induce Chooi to assist Airline GSA to secure a general sales agent contract with Jetstar which would have given Airocean lucrative rights to handle cargo for Jetstar flights. Airocean did not win the contract and Jetstar had said that it has at no time awarded business to Airocean. Tay has been released on bail of $40,000. ~ Adapted from Airocean ex-ceo faces graft charge today, Business Times Singapore, 5 April 2006; Airocean ex-ceo charged with graft, Business Times Singapore, 6 April Company Director Involved In Citiraya Case Sentenced To 45 Months In Prison (SINGAPORE) Tan Liang Chye, a company director convicted of falsifying accounts in the Citiraya Industries corruption scandal, has been sentenced to 45 months in prison. Tan, a director of Alvertex Pte Ltd and former director of A N Technology, had earlier pleaded guilty to seven out of 53 charges, with the remaining charges taken into consideration for sentencing. Tan was charged last year for conspiring with former Citiraya chief Ng Teck Lee and several others in falsifying the accounts of the two private companies, which included the issue and receipt of false documents involving Citiraya. He was also charged with one count of assisting in concealing stolen properties, mostly electronics scrap. ~ Adapted from Company director gets 45 months in Citiraya case, Business Times Singapore, 11 April Former Brilliant MD Fined And Sentenced To One Day In Prison (SINGAPORE) Harry Koh Soe Khon, former executive chairman and managing director of Brilliant Manufacturing, was fined a total $593,000 and sentenced to one day in prison for three counts of insider trading under the Securities and Futures Act, nine counts of non-disclosure under the Companies Act and one count of attempting to

5 destroy evidence under the Penal Code. He originally faced a total of 125 charges. The remaining charges were taken into consideration for sentencing. The total fine of $593,000 comprised of $160,000 for each of the three insider trading offences, $105,000 in total for the nine non-disclosure charges, and $8,000 plus one day jail for concealing documents. ~ Adapted from $593,000 fine, one day's jail for ex-md, Business Times Singapore, 25 April This newsletter is prepared by the Corporate Governance & Financial Reporting Centre, NUS Business School, National University of Singapore and sponsored by Federal Insurance Company (FIC), Singapore. Federal Insurance Company is the largest writing company of the Chubb Group of Insurance Companies, and as at 1st April 2004, carries a financial rating of AA by S&P and A++ by AM Best. Federal Insurance Company is a leading insurer for Directors and Officers Liability Insurance. For more information, please contact their insurance broker or agent or Federal Insurance Company,18 Cross Street, #11-08 China Square Central, Singapore Telephone: +(65) , Facsimile: +(65) To unsubscribe from this newsletter service, please send us an stating your address at which this e-newsletter was sent. The news summaries are based on original reports in various media including newspapers, publications, websites and other sources. The views, opinions and content expressed herein are those of the authors and do not necessarily represent the views of National University of Singapore, NUS Business School, Corporate Governance and Financial Reporting Centre, or any insurer within the Chubb Group of Insurance Companies. The information should not be relied on as legal or other professional advice or a definitive statement of the law in any jurisdiction. For such advice, an applicant, insured, listener or reader should consult their own legal counsel or other professional adviser. It is not our intention to infringe on any copyrights in any way. Should we have done so unintentionally, please let us know by with the necessary guidelines. Thank you. Corporate Governance and Financial Reporting Centre, NUS Business School, 1 Business Link, Singapore Telephone: +(65) , Fax: +(65) , cgfrc@nus.edu.sg