Seatrium addresses overall director fees, commits to ‘highest standards of compliance’

SINGAPORE: Despite recording a net loss of S$1.9 billion for fiscal year 2023, Seatrium, a Singapore-based offshore and marine engineering company, has defended its decision to appoint four additional directors, which increased its overall director fees from S$2.35 million to S$2.9 million.

In a filing to the Singapore Exchange a week prior to Seatrium’s 61st Annual General Meeting (AGM), the company shared the list of questions raised by the shareholders. Among those was the 23% hike in the company’s total director fees.

The shareholders were also keen to understand the need to appoint the additional four non-executive directors to the board, and the value they had brought to the company.

In their reply, Seatrium said, “The increase in directors’ fees is the result of appointing four additional directors to create a world-class board capable of steering the company through a period of integration, strategic renewal and business turnaround.”

In defence of the board appointments, Seatrium highlighted the diversity of its ten directors, who boast a range of nationalities and industry expertise.

This bodes well for the company as it seeks to maintain its existing international clients and pursue new markets globally.

“A diverse and international board is vital to lead and guide the company as it aims to transform itself into becoming a premier global player with world-class talent and engineering capabilities.

An enlarged board also reflects an expanded geographical reach of a combined entity with highly experienced directors who are familiar with the industry and Seatrium’s international clientele,” added Seatrium in its statement to the SGX ahead of their AGM on Friday.

Seatrium sought to appease shareholders by emphasising that the directors’ base fees remained ‘largely unchanged’, mirroring those paid by Sembcorp Marine, even though Seatrium managed a significantly larger and more complex business.

Seatrium also addressed two questions about ‘Operation Car Wash’ that interested the shareholders.

Earlier in February, Seatrium had reached in-principle settlement agreements with Brazilian authorities to settle corruption charges inherited from Sembcorp Marine.

The company agreed to pay approximately S$182.4 million as part of the in-principle settlements with the Attorney-General’s Office, Comptroller General, and Public Prosecutor’s Office. Seatrium attributed this payout to its cooperation with the Brazilian investigations.

In March, two of Seatrium’s former top executives faced corruption charges for allegedly channelling over $20 million in bribes to secure the company’s business interest in Brazil.

Wong Weng Sun, 62, was a former president, executive director and chief executive of Sembcorp Marine for 14 years. 75-year-old Lee Fook Kang was Jurong Shipyard’s senior general manager during the time of the alleged offence.

However, Seatrium, the product of the 2023 merger between Sembcorp Marine and Keppel Offshore & Marine, is determined to come out stronger from its past.

Despite these legacy issues, the company vows to uphold the ‘highest governance standards’ as the bedrock of its future growth.

“The company is committed to the highest standards of compliance with all applicable laws, rules and regulations, including a zero tolerance for bribery and corruption.

We have over time implemented a robust compliance programme, including procedures for anti-corruption risk assessments, mandatory compliance training, third-party due diligence, internal and external anti-corruption audits, and to continuously monitor and improve our policies and procedures,” expressed Seatrium in its reply to their shareholders.