RBB Bancorp in Los Angeles, which replaced its CEO after a probe found violations of company policies, is facing criticism from its former vice chairman.
Raymond Yu resigned from the $4.2 billion-asset company last week. In his resignation letter, Yu said he was leaving due to “ongoing disagreements with the board regarding corporate governance and other matters.”
Yu, who had been vice chairman since 2018, claimed that “historical and potentially current conflicts of interest” exist among directors and senior management. He also express concerns about public disclosures and pushed his colleagues for an independent investigation into potential conflicts of interest, the letter said.
Despite my repeated requests for further action regarding these matters, the board has affirmatively decided to not address these material concerns,” Yu added.
RBB said in a regulatory filing that its board takes Yu’s accusations “very seriously.” It noted two directors – Peter Change and Christopher Koo – had stepped down from certain committees due to previously undisclosed outside business with its chief strategy officer.
The company also said it had withdrawn its independence determination for the two directors.
“The board has resolved to investigate the issues raised in … Yu’s resignation letter in order to determine whether the involved directors may be deemed to be independent,” the company said.
Yu is the second RBB director to resign this month.
Alfonso Lau resigned on May 5, citing a “private decision” to leave the board.
The departures come a month after Alan Thian resigned as president and CEO after an internal investigation conducted by an outside law firm, identified violations of company policies and procedures, including those tied to personnel decisions.
Thian had been on paid leave since Feb. 22, when RBB first disclosed the investigation. David Morris, RBB’s chief financial officer, has been serving as interim president and CEO.
The board and management indicated that the violations did not have an adverse financial impact on the company.
“Our highly skilled workforce and experienced management team are confident that RBB … will continue to deliver on their reputation for meeting and exceeding our customers’ high standards,” James Kao, the company’s chairman, said in the release announcing Thian’s departure.
“This team has delivered growth while continuing to invest in people, product development and production capabilities, and the company is well positioned to further deliver value to its stakeholders,” Kao added.