CLIENT DETAILS:

Big Smile Image Limited (Big Smile) was founded by Mr. Sunny Day (Sunny) in 1980 after

he left a German camera manufacturer as their Head of Production. Sunny had maintained a total of 61% direct and deemed interest in the company since IPO. The core business of Big Smile was in making film cameras as OEM for major Japanese brands. Due to its reputation as a quality manufacturer, Big Smile commanded about 30% of the OEM market and went on to list on the Singapore Exchange Mainboard in 1995. Sunny had maintained a total of 61% direct and deemed interest in the company since IPO. The Board of Big Smile comprised Sunny as Executive Chairman & CEO and three independent directors.

On 1 July 2020, Sunny, who has 61% shareholdings in Big Smila, sold all his shares in Big Smile to a company jointly owned by his Head of Research & Development, Terence, and a private equity fund (PEF).

On 2 July 2020, all three independent directors resigned from the Board, citing change of

controlling shareholder as the reason for the resignation. Sunny was the only director left on the Board.

On 3 July, Big Smile announced that it had appointed Terence as an executive director,

and two other individuals as new independent directors. All two new independent directors were also concurrently serving as independent director of 2 other PEF's investee companies.

On 4 July, Big Smile announced the resignation of Sunny as director and Executive Chairman & CEO, and the appointment of a former Member of Parliament (Bigshot) as the new nonexecutive chairman. Bigshot is the brother of Terence's mother.

QUESTION:

1. Discuss the process appointment of the 2 new independent directors and if the proper process was followed.
2. Appraise whether the current independent directors can be considered as independent and you are required to support your argument.