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Hatton quits FSL Trust over alleged ‘misconduct and breach of duties’

Hatton quits FSL Trust over alleged ‘misconduct and breach of duties’
First Ship Lease Trust’s (FSL Trust) ceo Alan Hatton has resigned over alleged “misconduct and breach of duties”, the trustee-manager FSL Trust Management announced.

Hatton resigned on 2 February and he has been replaced by deputy ceo Roger Woods, who is now promoted to acting ceo with effect from the same date.

FSL Trust Management, trustee-manager of FSL Trust, said in a regulatory filing to the Singapore Exchange (SGX) that the board of directors had called on Hatton to “provide his explanation as to certain matters involved potential misconduct and breach of duties.”

A show cause noticed issued to Hatton stated that his misconduct and breach of duties included disclosing of confidential information to third parties, failing to give correct information and giving wrong information to the board, and setting up and providing services for remuneration through his majority owned Lionwharf, in breach of express and implied duties.

“Prior to the show cause notice, the board noted that Hatton had increasingly displayed antagonistic behavious towards board members who he considered were not aligned to him; in particular, Hatton displayed resistance to the appointment of a cfo and deputy ceo,” the FSL Trust Management statement said.

In his resignation and response, Hatton argued that he was excluded from the decision making process in the appointment of the cfo and deputy ceo. Hatton also gave his reasons as to why he did not consider his actions as amounting to misconduct or breach of duties.

“The board was highly dissatisfied with Hatton’s performance in relation to refinancing; and documents discovered show that he was acting, at the material time, in furtherance of his own agenda and in disregard of his duties as ceo and director and his obligations to unitholders,” FSL Trust Management said.

The board added that documents were discovered showing that Hatton had been acting in furtherance of his own agenda, and in disregard of the board’s views and his obligations to the unitholders and as ceo and director.

“Accordingly the board concluded that Hatton’s conduct represented serious misconduct and sufficient grounds to cease his appointment as director and ceo,” it said.

Meanwhile, Singapore-listed FSL Trust expects to record a “significant net loss for FY2016”, it told the stock exchange in a separate announcement.

The loss is mainly attributable to impairment provisions on vessels and a loss on the disposal of two vessels.

“Despite the accounting loss, FSL Trust continues to generate positive cash flow and income available for distribution,” the company said.