Governance Gaps Highlighted as Vmoto Holds Only One FY25 Board Meeting

Board Governance Under the Microscope

Vmoto Limited (ASX:VMT) has confirmed it held just one formal board meeting during the entire financial year ended 31 December 2025, a disclosure that triggered an ASX query on its governance practices. The meeting took place on 26 August 2025, with Managing Director Charles Chen notably absent due to a last-minute business engagement. Instead of multiple formal meetings as outlined in its Board Charter, Vmoto relied on eleven circular resolutions signed by all directors to pass key decisions throughout the year.

This reliance on circular resolutions, while constitutionally valid under Vmoto’s articles, falls short of the quarterly formal meetings the company’s Board Charter mandates. Vmoto acknowledged this gap and attributed it partly to its status as a smaller listed entity, supplementing formal meetings with frequent electronic communications and direct engagement with management. The Board has since scheduled four formal meetings for FY26, signalling a commitment to align governance practices with its charter.

Vmoto’s approach to approving its FY24 Annual Report and HY25 Interim Report followed this circular resolution process. Both reports were reviewed, interrogated, and signed off by all directors, including Mr Chen, who participated remotely. The company conceded that while the circular resolution process is constitutionally equivalent to formal meetings, convening in-person board meetings for financial approvals would provide better oversight and deliberation.

Trade Insurance Explained and Its Market Impact

Vmoto also addressed questions about its use of trade insurance, provided by China Export & Credit Insurance Corporation, known as Sinosure. This policy, renewed annually since 2022, insures up to USD 26 million of export receivables, compensating 90% of defaulted amounts up to USD 3.2 million. Vmoto described the insurance as a standard risk mitigation tool common in international trade, rather than a revenue driver.

The company clarified that trade insurance was one element among several sales strategies contributing to a 68.3% surge in 4Q25 unit sales, including volume discounts and third-party trade finance support. This nuanced explanation aims to temper market expectations about the insurance’s direct impact on Vmoto’s financial performance, despite its mention in the company’s 4Q25 sales surge announcement.

Director Independence and Conflict of Interest

Concerns regarding former non-executive director Blair Sergeant’s independence were also addressed. Vmoto confirmed that Mr Sergeant did not concurrently hold any executive role, including CFO, at advertising firm Ad-MOTO Limited during his tenure. The Board conducted its own enquiries and was satisfied that no undisclosed conflicts of interest existed. Mr Sergeant’s classification as an independent director remained appropriate, with no related party transactions involving Ad-MOTO during his directorship.

These clarifications come as Vmoto continues to expand its operations internationally, investing in new manufacturing facilities in China and assembly plants in Thailand, alongside strategic partnerships such as with Uber for fleet electrification in Europe. The company reported FY25 revenue of A$46.8 million and a strong cash position of A$32.4 million, underpinning its growth trajectory despite governance questions.

Vmoto’s governance response highlights a tension between maintaining nimble decision-making in a smaller listed company and adhering to formal governance standards expected by regulators and investors. The scheduled increase in formal board meetings for FY26 and a comprehensive Board Charter review suggest the company is seeking to recalibrate this balance.