Deloitte & Touche will cease to be the auditors of ComfortDelGro (CDG) following the latter’s annual general meeting (AGM) on April 29.
The proxy advisers recommended that shareholders vote against the re-appointment of Deloitte. This is because any non audit fees paid to the auditor can’t exceed 50% of the annual audit fee in a particular year.
Last year when ComfortDelgro was trying to list its Australian business Deloitte was remunerated for advisory work.
As a result this limit was exceeded and proxy advisers thus advised funds to vote against this resolution.
According to section 206(1A) of the Companies Act, a review of the fees, expenses and emoluments of an auditor of a public company shall be undertaken if the total amount of the fees paid to the auditor for non-audit services in any financial year of the company exceeds 50% of the total amount of the fees paid to the auditor in that financial year.
The cessation is effective on the same day.
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Shareholders holding some 74.44% of votes, or 514.6 million shares in CDG, voted against the auditor’s reappointment.
The rest of the resolutions at the AGM, including the renewal of CDG’s share buyback mandate, were passed.
A new auditing firm will be appointed for the FY2022 ending Dec 31.
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In a bourse filing, CDG’s board and management expressed their disappointment at the outcome but said that they will respect the decision of their shareholders.
“The company would like to record its appreciation to Deloitte for its service through the years. Deloitte has always discharged its responsibilities well and duties professionally and the board and management have had no issues with them,” reads the statement.
“The company will commence its search for new auditors and seek shareholders’ approval in relation to such appointment in due course,” it adds.
As at 12.44pm, shares in CDG are trading flat at $1.47.
