Raffles Education Faces Regulatory Scrutiny and Sets Bold Board Diversity Targets Amidst Director Charges

Key Points from Raffles Education Limited’s Response to SGX RegCo Queries

• Director Mr. Joseph Ho Yan Jun Charged Under Securities and Futures Act
• Board Diversity Targets Announced: 30% Female Representation by FY2030
• Exact Remuneration Figures for Directors and CEO Disclosed for First Time
• Board Reaffirms Director’s Continuation Amidst Criminal Charges

Full Details for Investors: Regulatory and Governance Developments

1. Regulatory Investigation and Charges Against Director

Raffles Education Limited has disclosed that Mr. Joseph Ho Yan Jun, a Non-Independent and Non-Executive Director, is currently facing charges under Section 331(1) read with Section 203(1) of the Securities and Futures Act 2001. These charges stem from ongoing investigations by the Monetary Authority of Singapore and the Commercial Affairs Department. Despite these charges, the Company’s Independent Committee and Nominating Committee have assessed Mr. Ho’s suitability and have decided to retain him in his role, citing his experience and the principle of presumption of innocence until proven guilty.

Importantly, the Committees do not anticipate any significant adverse impact on the Company’s operations or management as a result of these charges. Existing safeguards and measures are deemed sufficient and no new measures are considered immediately necessary. Shareholders should closely monitor this situation, as criminal charges against a director for breaches relating to securities laws are potentially price-sensitive and could affect investor confidence and share value.

2. Board Diversity Policy: Ambitious New Targets

Raffles Education has set measurable diversity goals for its Board, including a target of at least 30% female representation by FY2030, and the inclusion of at least one director under the age of 50 to ensure generational diversity. The Company also aims to maintain a mix of directors with expertise in finance, education, digital transformation, and sustainability. As of FY2025, the Board comprises 17% female directors.

The Nominating Committee will use external search firms to identify qualified candidates, aiming to achieve these goals within five years. These commitments signal a significant shift in board composition and governance standards, aligning with global best practices and potentially enhancing the Company’s market reputation and investor appeal.

3. Clarification on Director Independence Policy

The Company clarified its process for reviewing director independence, particularly for those serving nine years or longer. Raffles Education confirmed full adherence to SGX Listing Rules, stating that directors will be reclassified as non-independent after nine years, as required. This proactive review process ensures compliance and transparency, which is crucial for shareholders concerned about governance standards.

4. Disclosure of Exact Remuneration Figures

For the first time, Raffles Education has disclosed the exact remuneration amounts for its directors and CEO in compliance with Listing Rule 1207(10D). Key figures include:

• CEO (Mr. Chew Hua Seng): S\$1,777,291 (S\$1,006,492 salary, S\$770,799 performance-related bonuses)
• Directors:
  • Lim How Teck: S\$100,000
  • Joseph Ho Yan Jun: S\$75,000
  • Ng Kwan Meng: S\$91,847.22
  • Lim Siew Mun: S\$100,000
  • BG (Retd) Chua Chwee Koh: S\$93,152.78

This level of transparency is a positive development and may influence investor perception, particularly in assessing remuneration alignment and governance.

Potentially Price-Sensitive Issues for Shareholders

• Director Facing Criminal Charges: The retention of a director facing regulatory charges may affect investor confidence and could be a catalyst for share price movement.
• Board Diversity Targets: The commitment to significant diversity improvements may attract ESG-focused investors, potentially impacting share value positively over the medium term.
• Remuneration Transparency: Disclosure of exact amounts for senior leadership remuneration may affect stakeholder perceptions of governance and management quality.

Conclusion

Raffles Education Limited’s latest disclosures offer both reassurance and concern for investors. While the Company is making strides in board diversity and governance transparency, the ongoing regulatory investigation into a sitting director remains a material issue. The Board’s stance on retaining Mr. Ho, coupled with the principle of presumption of innocence, is a key factor for shareholders to watch. These developments have the potential to move the market and affect the Company’s share price in the coming months.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. The presence of regulatory investigations or criminal charges is not a determination of guilt, and all individuals are presumed innocent until proven otherwise.

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