White Collar Crime

Our White Collar Crime Team

Trident Law’s White Collar Crime Team is different. Our white collar criminal lawyers are first and foremost criminal defence specialists.

To put it simply, we are lawyers with significant game time in defending subjects at trials. As seasoned trial lawyers, you have the assurance that our advice will always be premised on our years of experience in the real world of criminal litigation.

With one of the largest criminal defence teams in Singapore, we have the capacity to be mobilised to crises situations in a matter of hours. On the capability front, we stand out for having lawyers with finance and tech expertise.

For close to a decade, Trident Law has been regularly instructed by local and overseas based clients to act in matters involving bribery and corruption allegations including those involving foreign public officials, money laundering, tax frauds, insider trading and market manipulations. We have been actively involved in cases originating in Singapore, Hong Kong, Australia and India.

When instructed on a white collar criminal defence matter, we devote substantial resources to ascertain the facts (through internal investigations, reviews and analyses of large volumes of documents/data and evidence preservation) and to thereafter provide advice to our clients as early as possible during investigations by the authorities. We also engage the authorities at an early stage to set out our clients’ positions to prevent charges from being preferred.

Our greatest victories have been such cases where investigations do not lead to charges being laid against our clients, thereby averting any reputational damage to our clients.

You should consider seeing a lawyer if you are being investigated, regardless of whether you have been charged. This is because your lawyer can guide you through the process, take instructions from you, and advise you on the next steps accordingly, based on your instructions. Please understand that your lawyer cannot follow instructions that would break the law, or breach the lawyer’s duty to the Court or professional conduct duties.

Click here to see a brief overview of the criminal process.

White Collar Crime in Singapore

It is worth noting that law enforcement authorities have moved forward to effectively tackle white collar crimes in Singapore by carrying out meticulous, robust investigations, particularly in this day and age of rapid technological advancement cutting across jurisdictions. Considering the fluid and sophisticated nature of such crimes, which are often also referred to as business or corporate crimes, it is probably best not to set out a comprehensive, exhaustive definition. White collar crimes may take place in the context of commercial dealings, involving a person and/or entity seeking to derive some financial or other material benefit. Suspects may include, amongst others, Directors, CEOs, officers, employees, or others serving a company who may be alleged to have engaged in dishonest, fraudulent or even misguided dealings to these ends.

The primary motivation for engaging in such conduct is economic, often to support a lifestyle beyond means. However, this is not always the case, as can be seen from the definition of “gratification” under section 2 of the Prevention of Corruption Act 1960. Hence, it is imperative that people who hold offices or positions concerned with corporate governance understand what amounts to white collar crimes, and develop a proactive risk management culture.

White collar crimes in Singapore may trigger offences or prohibitions under the Penal Code 1871, Companies Act 1967, Prevention of Corruption Act 1960, Securities and Futures Act 2001, Computer Misuse Act 1993, and Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992, to name a few.

The authorities take a dim view of white collar crimes given Singapore’s position as a commercial city and finance hub. Those duly convicted of white collar crimes face severe penalties considering the broader public interest.

You may wish to engage one of our specialist criminal lawyers to negotiate the complex legal issues that you face.

We now set out some white collar crimes that may attract prosecution and punishment.

 

Bribery or Corruption

Singapore is amongst the least corrupt countries in the world. In 2021, Singapore was tied for 4th place with Norway and Sweden in the Corruption Perceptions Index.

What is Corruption?

Corruption is getting, giving, requesting or seeking any gratification to induce someone into doing a favour, with corrupt intent.

The Corrupt Practices Investigation Bureau (“CPIB“) stated that: “Corruption in Singapore is broadly defined as a bribe offered in return for a favour. The bribe can be in the form of monetary or non-monetary nature.”

However, there does not seem to be an evident definition of “corrupt” under the Prevention of Corruption Act 1960 or from Singapore cases. The case law tends to reflect that more must be proven than just a conflict of interest to establish corruption. In Chan Wing Seng v Public Prosecutor [1997] 1 SLR(R) 721, the then Chief Justice held as follows:

“I have been very hesitant to define what ‘corrupt’ means because the factual permutations of corruption can be endless. Any definition may thus unnecessarily circumscribe the effect of this section. However, as a starting point, it is useful to keep in view the natural and ordinary meaning of the word ‘corrupt’ as a working guide. In this regard, one of the meanings of ‘corrupt’ as given in The New Shorter Oxford Dictionary (1993 Ed) is:

Induce to act dishonesty or unfaithfully; bribe.

And, in further ascribing a meaning to ‘corruption’, it states:

Perversion of a person’s integrity in the performance of (especially official or public) duty or work by bribery etc.

The above is probably already what most laypersons understand by corruption. However, I stress once again that this is no more than a preliminary guide to what ‘corrupt’ means and is clearly not definitive or exhaustive. Each case must be examined on its own facts.”

What are the main provisions on corruption offences under the Prevention of Corruption Act 1960 (“PCA”), Penal Code 1871 and other Singapore legislation?

Broadly, Singapore law forbids both the giving and the taking of a bribe.

Prevention of Corruption Act 1960 (“PCA”)

Sections 5 and 6 of the PCA make it an offence to engage in bribery. The main laws invoked to bring charges for domestic or foreign bribery are contained in the PCA and the Penal Code 1871.

Section 5 of the PCA criminalises and provides for the punishment of any person who corruptly gives or receives gratification to induce or reward a person to carry out or to refrain from carrying out a transaction. Section 6 of the PCA criminalises and provides for the punishment of the conduct of agents, including employees who act on behalf of their principal. If found guilty, the person held responsible faces a fine of up to $100,000, or 5-years’ imprisonment, or both.

Section 8 of the PCA states that in cases concerning section 5 or 6 of the PCA where it is proved that gratification was given, paid or received by a public servant, it would be presumed that such gratification was given, paid or received corruptly as an inducement or reward unless proven otherwise.

Sections 5, 11 and 12 of the PCA forbid such payment to and such receipt by a Singapore public officer.

Sections 11 and 12 of the PCA criminalise and provide for the punishment of the bribery of a national public official, such as Members of Parliament or Members of a “public body” respectively. If found guilty, the person held responsible faces a fine of up to $100,000, or 7 years’ imprisonment, or both.

While the PCA does not expressly provide for bribery of foreign public officers, such conduct could come under the purview of section 6 of the PCA.

Section 14 of the PCA specifically enables a principal to get back as a civil remedy the amount received by its agent either from the agent or the giver of the bribe, over and above any other available remedy. The rationale for this provision is to remove the offender’s profits from the corrupt transaction.

Penal Code 1871

In addition, sections 161 to 165 of the Penal Code 1871 cover the bribery of public officers, primarily local ones. The said provisions set out the following situations as amounting to bribery:

• A public officer accepting an unauthorised gratification in regard to an official act;
• A person accepting a gratification to affect a public officer in a corrupt or unlawful way;
• A person accepting a gratification for exerting control over a public officer;
• A public officer who assists in the above crimes would be caught under the Penal Code 1871 as well;
• A public officer who gets a material benefit without any consideration or with consideration that s/he is aware is not sufficient from a person involved in any business or proceedings that the public officer is responsible for carrying out.

Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (“CDSA”)

The CDSA which is Singapore’s primary anti-money laundering law enables the seizing of proceeds from corruption and other unlawful acts.

What is considered gratification?

Gratification can take many forms and is broadly defined under the PCA. Examples include but are not limited to: commission, contractual agreement, money (or a loan), gifts, payment, property, services, favours, engagement for work purposes, taking up a position, a promise, or protection from criminal or disciplinary proceedings. Gratification under Singapore law includes an offer, promise, or promise of gratification that falls within the Section 2(a),(b) and (c) of the PCA.

What amounts to a corrupt component?

If there was a corrupt component in the transaction and the person giving or receiving the gratification had corrupt intent, that person could be charged, convicted and punished for corruption (sections 5 and 6 of the PCA).

In determining whether there is a corrupt component in a transaction, the Court will look into precisely what is forbidden by the law, rules or code of conduct that regulated the relevant activity.

What amounts to guilty knowledge?

In the past, it was observed that in most cases involving corruption, there was no disagreement that something of value had been given or received, but much turned on the accused person’s state of mind.

In evaluating whether the accused had acted with guilty knowledge, the Court will take into account whether s/he knew that it was wrong or improper to have given or accepted the relevant gratification. To this end the Court will draw inferences from the evidence the accused person’s behaviour and the circumstances under which s/he allegedly gave or received gratification.

In short, to prove corruption it must first be shown that there was a corrupt component to the transaction (an objective inquiry), then secondly, that the accused knew that what s/he did was corrupt by the ordinary and objective standard (a subjective inquiry). Both these factors must be proven beyond a reasonable doubt.

What are the 4 elements that amount to a corruption offence under section 6(a) of the PCA?

Singapore courts have held that the following 4 elements must be proven to convict an accused pursuant to section 6(a) of the PCA:

• the taking of the gratification;
• as an inducement or reward;
• corrupt component in transaction; and
• the accused had guilty knowledge in taking the gratification.

In January 2021, Teo Chu Ha and his sister were imprisoned for working together to acquire tenders for 2 companies in China in return for bribes that came up to S$2.3 million. The crimes had taken place in China. Teo Chu Ha was a previous Senior Director of Logistics at Seagate Technology International (“Seagate”), and used his authority in Seagate as well as his role as a member of the Committee that gave the tenders, to get confidential information from Seagate. His sister who had access to such information used it to assist 2 Chinese transport companies to secure tenders given by Seagate. In return, the sister would get 10% “commission” on Seagate’s payment to the Chinese transport companies. Both brother and sister were also found guilty of handling the proceeds derived from their criminal behaviour, as Teo had transferred S$700,000 (part of which came from the bribes) from his sister’s account to his own. The sum was used to buy property in Singapore in his sister’s name. Teo Chu Ha received a 4-year and 2-month prison sentence, while his sister received a 3-year and 5-month sentence. She was also required to return more than S$2 million and would have been imprisoned for a further 18 months if she could not pay this amount.

Both Teo Chu Ha and his sister were found guilty of offences under the PCA despite their acts in China given the PCA’s extraterritorial jurisdiction over Singaporeans whose corrupt conduct abroad would be treated as though they had engaged in such acts in Singapore.

Taking Gratification

In Teo Chu Ha v Public Prosecutor [2013] 4 SLR 869, the accused appealed to the High Court against his conviction of 12 charges of corruption under s 6(a) of the PCA. The accused was alleged to have corruptly taken gratification to assist a company to get contracts from his employer. The first charge was in regard to the accused’s taking of 20,000 shares of the company. The remaining charges pertained to the accused getting 11 separate payments. The primary issue before the High Court was the motivation for the giving and receiving of the shares and 11 payments. The High Court found that the gratification would have to be provided as a reward or inducement for the accused’s conduct with regard to his principal to amount to a corruption offence under section 6(a) of the PCA. In particular, there must be a direct causal connection between the reported gratification and the offending conduct from the perception of both the giver and receiver of it. On the first charge, the High Court held that the Prosecution had to establish beyond reasonable doubt that the payment of shares was actually a “reward or inducement” as opposed to a “sham or cover up”. Only a weak connection between the share transaction and contracts were found, and no evidence was given on the real worth of the shares. On the remaining charges pertaining to the 11 payments that the accused had accepted, the payments did not tally with the tender dates of the contracts that the Prosecution claimed the accused had secured in return for the payment. While there might have been a conflict of interest, corruption had not been proven. In this regard, a conflict of interest in and of itself may not amount to corruption. While the Prosecution would have to establish a direct causal connection it would not have to show that the inducement or reward under the PCA corresponded precisely to particular corrupt behaviour or a particular favour, so long as it was provided to buy the receiver’s “goodwill” and “as a form of retainer” to secure further services. The accused was acquitted on appeal.

The Prosecution then brought the matter before the Court of Appeal in Public Prosecutor v Teo Chu Ha [2014] 4 SLR 600; [2014] SGCA 45 through a criminal reference pursuant to section 397 of the then Criminal Procedure Code. The Court of Appeal held that a charge of corruption can be proven even if consideration had been paid for the gratification. The Prosecution need not establish that the consideration was insufficient or that the transaction was a “sham”.

The Court of Appeal noted Parliament’s desire to ensure the broad application of the PCA to stamp out corruption. Accordingly, the provisions under section 2 of the PCA were inclusive and not exhaustive. Rather, to determine whether gratification under the PCA had taken place, the Honourable Court held that one had to assess the scheme as a whole.

The Court of Appeal understood that the accused would not be in a position to buy shares in the company considering that it was private and not public. Accordingly, it was the chance to buy the shares and/or the facilitation to this end that coupled with the shares amounted to the gratification in this case. In addition, considering the contents of the remaining charges (other than the first charge), the gratification was also present when it was realised later, i.e. when the accused received the shares. Considering that it was important that such elaborate schemes came within the purview of the PCA and its purpose to tackle corruption in its different forms, it would be too onerous on the Prosecution to show that the share transaction was a sham or that the shares were bought at a heavily reduced rate.

The upshot of the above is that the PCA is rather broad in its application, and could cover situations where payment has been made by the receiver for the supposed gratification e.g. a gift. In such a case, the onus does not lie with the Prosecution to have to establish beyond a reasonable doubt that the payment was a “sham”, or that consideration was not sufficient.

Inducement or reward

In Leng Kah Poh v Public Prosecutor [2013] 4 SLR 878, the accused appealed to the High Court against his conviction of 80 charges of corruptly taking gratification pursuant to s 6(a) of the PCA. During his role as a manager in IKEA, the accused was charged with accepting payments in return for preferring a company that provided food to IKEA over others. The issue before the High Court was whether the transaction had a corrupt component and whether the accused had “guilty knowledge”. The High Court was not persuaded that the accused had been induced as an agent of IKEA Singapore to engage in certain acts that affected matters concerning his principal. While the accused had been acquitted, the High Court stated that IKEA could still bring a civil suit for fraud or infringement of his fiduciary responsibilities.

Corrupt component in transaction

In Public Prosecutor v Tan Boon Yeong [2013] SGDC 124, the accused who was a Market Development Manager of his company, was charged with corruptly accepting a Rolex watch from an Edward Wong as a reward to enable Wong’s agents to move to a new firm, and for clients to engage its services, under s 6(a) of the PCA. The Court held that the accused was aware that he received the watch not only as a birthday present. The watch was a reward to enable the movement of Wong’s agents and clients. The Court also held that the transaction carried a corrupt aspect, finding that the reward was given in the pretext of a gift. In this regard, the Court took the following considerations into account: (i) the cordial but somewhat superficial working relationship between Wong and the accused; (ii) the high price of the watch; (iii) the accused’s position having put himself in a conflict of interest; and (iv) the accused’s breach of his own company’s human resources protocols and provisions. Further, the Court held that the accused was aware that the transaction was corrupt “by the ordinary and objective standard”. The Court observed that the accused had declined to accept the watch at first, and subsequently tried to conceal the watch during investigations. Regardless of whether or not Wong had given the watch to the accused with corrupt intent, what was important was that the accused had taken the gift with the requisite “guilty knowledge”.

In Public Prosecutor v Ng Boon Gay [2013] SGDC 132, the accused was charged with 4 counts of corruptly getting sexual gratification from one Cecilia in return for his preferential treatment to her employer with regard to his principal (Central Narcotic Bureau [“CNB”])’s affairs. The accused was the Director of CNB at the time. The Court did not accept the accused’s submission that physical intimacy between willing adults was not gratification for the purposes of the PCA. The Court held that the relationship would only be important when looking into the accused’s intentions, particularly if there was guilty knowledge on his part. Considering the accused’s role in the CNB and Cecilia’s position as a sales representative in which she sold IT goods to CNB, the Court found that the presumption under section 8 of the PCA had been triggered. The Court held that the accused and Cecilia had truly been in a relationship, which took place before the preferential treatment reportedly secured by Cecilia’s employers. The physical intimacy between the accused and Cecilia were in the context of a relationship; it was not pursuant to any extraneous purpose. In addition, the Court held that the ongoing relationship between the accused and Cecilia disproved the existence of a corrupt component. Finally, the Court held that while the accused had acted in conflict, not every conflict of interest would result in the finding of corruption.

Guilty knowledge and/or Corrupt Intent

In Public Prosecutor v Tey Tsun Hang [2013] SGDC 165, the accused claimed trial to 6 counts pursuant to s 6(a) of the PCA for accepting gifts and physical intimacy from his ex-student one Darrine as bribes.

The primary consideration before the Court was the accused’s supposed “corrupt intent”. The Court held that the presumptions under section 8 of the PCA had been triggered, considering that the National University of Singapore (“NUS”) engaged in the public service of university education, and was a public body given that it got funds from the Government and handled public money. The Court was satisfied that the transaction carried a corrupt component, in that the relationship was “an illicit romantic” one with an agenda in which the accused deliberately exploited his authority. Further the accused was able to show preferential treatment to his student. The Court took several considerations into account to determine whether the accused had corrupt intent. Several of these considerations were relevant to the relationship between the accused and Darrine, particularly his taking advantage of his authority over her. To this end, the accused had: started the inappropriate relationship and initiated physical intimacy; implied that he had to use a fountain pen and iPod, told Darrine to buy 2 shirts and pay for a group dinner at a restaurant. In evaluating “guilty knowledge”, the Court held that the accused was aware of his corrupt actions in that he had consciously infringed the NUS Code of Conduct and other protocols in place. The accused’s attempt to hide his activities was indicative of corrupt intent. Accordingly, the accused was unable to rebut the presumptions under section 8 of the PCA. The Court was satisfied that even if the presumptions had not come into play, the Prosecution’s evidence was substantial.

In Public Prosecutor v Peter Benedict Lim Sin Pang [2013] SGDC 192, the accused faced one charge of corruption under section 6(a) of the PCA, for corruptly getting physical intimacy from one Ms Pang. During the period of the alleged acts, the accused was Commissioner of the Singapore Civil Defence Force (“SCDF”), while Ms Pang was the General Manager of a company that had an existing contract with SCDF and other Government agencies. Though Angie was not directly involved in sales, she did contribute to the pricing of the company’s goods. The presumptions under section 8 of the PCA had been triggered. In assessing if the transaction had a corrupt component, the Court looked into the accused’s intentions, finding that the accused had exploited his position of power over Ms Pang. The Court held that when the accused had requested Ms Pang for physical intimacy, he would have been aware that she would be worried for her company’s legitimate economic interests and would have prioritised those interests. On “guilty knowledge”, the Court held that the accused had secured such gratification from Ms Pang being aware that his actions were corrupt under an ordinary and objective standard. The accused had infringed provisions on conflict of interest and given his position and years of experience in the public service, ought to have been aware that his actions would have placed him in a position of obvious conflict.

What is a domestic public officer under Singapore law?

A domestic public officer is “a member, officer or servant of a public body” under the PCA. Members of Parliament are covered under section 11 of the PCA. “Public body” refers to any: “corporation, board, council, commissioners or other body which has the power to act under and for the purposes of any written law relating to public health or to undertakings or public utility or otherwise administer money levied or raised by rates or charges in pursuance of any written law”, pursuant to section 2 of the PCA.

In addition, the Penal Code 1871 expressly refers to “public servant”. Section 21 of the said Code provides that public servants include the following:

• an officer of the Singapore Armed Forces;
• a judge;
• an officer of a Court of Justice;
• an assessor assisting a Court of Justice or public servant;
• an arbitrator;
• an officer with the authority to confine a person;
• a Singapore Government officer;
• an officer acting on the Singapore Government’s behalf; and
• a Public Service Commission or Legal Service Commission member.

Do our laws limit or regulate the giving of presents, travel costs, food expenses or entertainment to domestic public officers?

Such officers are not allowed to get any money or presents from people who engage with them on an official basis, nor are they allowed to receive any travel arrangement or costs and any entertainment that would put them in an obligatory position, whether actual or ostensible.

Does Singapore law cover “rub of the green” payments to domestic public officers?

Such payments could be caught by the PCA or the Penal Code 1871. Specifically, section 12 of the PCA forbids proposing any gratification to Singapore public officers as an inducement or reward for carrying out or “expediting” any official task. Likewise, it would also be a crime under the same section for a Singapore public officer to take any gratification in discharging the said responsibilities.

What are the limitations on local public officers involved in business activities while in office?

The Singapore Government’s Instruction Manual governs all Singapore public officers, and sets out provisions that advice on how such officers should conduct themselves to stay away from corruption. The Instruction Manual permits public officers to engage in business activities but provides certain limitations, such as proscribing public officers from benefiting from their office.

Does Singapore law regulate payments through other parties to Singapore public officers?

Bribing through payments to other parties is forbidden, whether any of such payments are handed over to domestic or foreign public officers. This is because section 5 of the PCA states that a person can engage in bribery either alone or together with another person.

When can foreign companies be held responsible for committing domestic bribery?

Foreign companies face prosecution for bribing a foreign public officer if the offending acts have been carried out in Singapore. Section 29 of the PCA coupled with section 108A of the Penal Code 1871 contemplates the prosecution of foreign companies for bribery that had taken place abroad, if the aiding and abetting in such acts occurred in Singapore.

What are the laws that criminalise and punish bribery of a foreign public officer?

Neither the PCA nor the Penal Code 1871 expressly provide for the bribery of a foreign public officer. However, the general provisions in the PCA against bribery covers private bribery in business dealings and bribery involving foreign public officers, whether they are local or foreign.

In particular, section 6 of the PCA on corrupt transactions with agents, coupled with section 37 of the PCA, essentially cover the bribery of a foreign public officer by a Singapore citizen outside Singapore. Section 37 of the PCA confers extraterritorial jurisdiction given that where the bribery is alleged to have taken place outside Singapore and is conducted by a Singapore citizen, the accused would be treated as though the alleged conduct had taken place in Singapore.

In addition, section 4 of the Penal Code 1871 imposes extraterritorial responsibilities on Singapore public officers and states that any act or omission carried out by a public officer outside of Singapore within the scope of her or his employment would amount to a crime in Singapore and would be treated as though it had been carried out in Singapore. Hence, if the Singapore public officer took a bribe abroad, s/he would be held criminally responsible under Singapore law.

Do our laws limit or regulate the giving of presents, travel costs, food expenses or entertainment to foreign officers?

While there are no specific limitations in the PCA or Penal Code 1871, any present, travel cost, food expense or entertainment given with the prohibited guilty knowledge or corrupt intent would amount to a crime and be punishable under the PCA.

The PCA forbids the proposing or giving of any gratification if it is coupled with the prohibited guilty knowledge or corrupt intent. The definition of “gratification” is wide and covers the following:

• Money;
• Gifts;
• Loans;
• Fees;
• Rewards;
• Commissions;
• Valuable security;
• Property;
• Interest in property;
• Employment contract or services or any part or full payment;
• Discharge from carrying out any commitment or discharge from fulfilling any responsibility; and
• Any other service, preferential treatment or benefit whatsoever: Public Prosecutor v Teo Chu Ha [2014] SGCA 45.

Singapore Courts have also found that payments made in accordance with business, industry or trade practices would not be a defence to charges brought under the PCA.

Does Singapore law allow facilitating “rub of the green” payments to foreign public officers?

While such payments are not specifically set out under the PCA or Penal Code 1871, they would likely amount to an act of bribery under both. In particular, this includes being caught by section 12(a)(ii) of the PCA, which criminalises and punishes a proposed gratification to any member of a public body as an inducement or reward for “expediting” any official procedures.

Does Singapore law regulate payments through other parties to foreign public officers?

Bribing through payments to other parties is forbidden, whether any of such payments are handed over to domestic or foreign public officers. This is because section 5 of the PCA states that a person can engage in bribery either alone or together with another person.

What defences can be made in response to allegations of engaging in domestic or foreign bribery?

There are no express provisions under the PCA. The accused would have to rely on disputing the elements of the charge(s).

Can persons and corporations be held criminally responsible for bribery of a domestic or foreign officer?

Yes. The sections in the PCA and the Penal Code 1871 provide for select crimes that can be carried out by a person if s/he or it were to participate in corrupt conduct. “Person” covers “any company or association of body of persons, corporate or unincorporated” under the Interpretation Act 1965. The assessment of whether to take action against a person or company for criminal behaviour is done by the Prosecution, in its exercise of prosecutorial discretion.

Companies

Our case law also suggests that a company can be held criminally responsible for offences carried out by its employees or agents. In applying the “identification doctrine”, the Court will consider whether the person who engaged in such criminal behaviour may be considered as the “embodiment” of the corporation, or whose acts fall under the purview of his role as a manager duly attributed to her or him. In Singapore, the Court may also look into the reason for the relevant section that made such conduct a crime in determining whether the requisite state of mind should attach to the corporation. The Court has done so in conspiracy and shipping cases but has not done so yet in bribery cases.

It is easier to hold a company criminally responsible for its involvement in money laundering. Section 52 of the CDSA states that if it is a requirement to prove the mental element of a body corporate with regard to its behaviour, it is enough to provide evidence that its Director, employee or agent who acted pursuant to real or ostensible authority had the requisite mental element, such as intention. If the Director, employee or agent, or any other individual who participated in such conduct with the requisite approval or permission, the company would be caught under the CDSA.

Directors and employees

Broadly, Directors and employees of a corporation will not be punished for crimes that were carried out by the corporation if they were not participating or personally involved. But section 59 of the CDSA states that where the crime was committed by a company under the CDSA with the “consent”, “connivance” or neglect on the part of the officer responsible, both the officer and the company would be guilty of the crime. It also remains open for the person responsible to be prosecuted and convicted for results that flow from such crimes, such as money laundering, even though s/he may not be caught for engaging in corrupt behaviour. Further, Directors who turn a blind eye to employees involved in criminal misconduct could be held accountable for not using reasonable diligence in carrying out their responsibilities under the Companies Act 1967.

What Government authorities are responsible for enforcement against bribery of foreign officers?

The main authority for enforcement in Singapore is the CPIB. The CPIB’s authority is provided for under the PCA, and it has the mandate to investigate and tackle corruption in Singapore, with an emphasis on crimes involving corruption under the PCA and the Penal Code 1871.

Under the PCA, the CPIB has wide-ranging authority in investigation, such as the authority to call for witnesses to be interviewed, to probe an alleged offender’s financial documents and the ability to investigate other “arrestable offences” (where an arrest can take place without a warrant). The Prosecution can confer additional specific investigative powers including the authority to investigate financial accounts or safe deposit boxes, and to call for the disclosure of documents and information to assist in the investigation.

The CPIB conducts investigations into corruption complaints, but it does not bring criminal charges. It directs applicable selected cases to the Prosecution, which determines whether or not to proceed with the charge(s).

The Commercial Affairs Department (“CAD“) is mainly responsible for looking into white collar offences in Singapore. The CAD (including its Financial Investigation Division) looks into elaborate or sophisticated fraud, white collar offences, money laundering and the funding of terrorism. The Attorney-General’s Chambers (“AGC“) consolidated its Criminal Justice Division and Financial and Technology Crime Division into the Crime Division to enable its prosecution of all crimes that came within its remit. Within the Crime Division of the AGC there are specific teams with the requisite experience in enforcement against corruption and financial offences within and beyond Singapore.

The Monetary Authority of Singapore (“MAS“) also prescribes standards to address money laundering and funding of terrorism to financial authorities and bodies who carry out investigations into such offences. The MAS can also delegate certain cases that may involve such conduct to the CAD to look into them further. In 2015, both MAS and CAD worked together to look into crimes involving market misconduct under the Securities and Futures Act 2001. The MAS has also developed working ties with the CPIB. In addition, the MAS has meted out S$3.3 million in fines for infringements relating to money-laundering.

Trends in enforcement to tackle domestic bribery

The CPIB has taken a proactive approach to tackle domestic bribery. This factor, coupled with the relatively good remuneration for public officers tends to minimise domestic bribery taking place. Hence, most of the CPIB’s enforcement addresses pervasive risks of such bribery arising in the private space. The CPIB identified building and maintenance as well as construction activities as sectors at risk of non-compliance.

In addition, the AGC has reportedly stated that it would rely on technology to prosecute white collar crimes, over and above its working relationship with the CPIB and the MAS.

Trends in enforcement to tackle foreign bribery

The Mutual Assistance in Criminal Matters Act 2000 was amended in July 2014 to enhance Singapore’s capacity to render mutual legal assistance to other States and reflects its willingness to tackle transnational crimes. The revisions to the said Act essentially make it easier for other States to seek legal assistance and broadens the ambit for Singapore to render assistance to them. On a related note, on 5 July 2017, the CPIB connected with its foreign equivalents from Australia, Canada, New Zealand, the United Kingdom and the United States to unveil the International Anti-Corruption Centre (“IACCC”). Singapore’s involvement with the IACCC suggests that it will be more prepared to look into foreign bribery matters involving Singapore connections.

On 1 April 2019, the Serious Crimes and Counter-Terrorism (Miscellaneous Amendments) Act 2018 (“SCCT Act”) took effect, which improves the capacity for Government agencies to disclose financial information with financial authorities abroad. The SCCT Act revises the CDSA by permitting Singapore agencies to reveal information pursuant to international cooperation rather than having to do so pursuant to a bilateral agreement, so long as there are controls in place that respect confidentiality. As a result, Singapore is now in a position to share intelligence involving finance with over 150 financial authorities abroad that have joined the Egmont Group.

The authorities might tend to resort to anti-money laundering legislation and/or sections that cover account falsification such as section 477A of the Penal Code 1871 to bring charges in cases involving foreign bribery, given that important Prosecution witnesses may be based abroad.

What are the penalties for persons and companies that break bribery laws in Singapore?

As mentioned above, a person or company found guilty of breaching the broad sections on anti-corruption offences including sections 5 and 6 of the PCA face a fine of up to $100,000 or up to 5-years’ imprisonment, or both. These also cover the bribery of foreign public officers in Singapore, and bribery of foreign public officers abroad by a Singapore citizen when the above provisions are coupled with section 37 of the PCA.

Where the crime concerns a Government contract or bribery of a Member of Parliament, the maximum imprisonment term has been increase to 7 years. There are also civil sanctions that enable the disposal of property under the PCA. In addition, a person found guilty of the crime of bribery under the Penal Code 1871 can be fined and sentenced to up to 3-years’ imprisonment. In addition, pursuant to the CDSA, where an accused person is found guilty of a serious crime that includes bribery, the Court can under section 4 of the same, give an order to take back the proceeds or profits gained from such criminal acts. Under the Companies Act 1967, a Director found guilty of bribery could be removed from acting as Director.

What are the recent cases involving foreign bribery?

The case involving Teo Chu Ha and his sister has already been covered above.

In October 2020, a US asset management bank was prepared to comply with a Deferred Prosecution Agreement (“DPA”) with the US Department of Justice with regard to a cross-border money-laundering investigation related to a Malaysian state investment dealing. The Singapore subsidiary of the said bank was to pay US$122 million to the Singapore Government for its participation in offering bonds associated with the investment fund under the DPA. The Singapore subsidiary was to make the payment under a 36-month conditional warning rather than prosecution, which was given by the CAD for 3 charges of corruption pursuant to section 5(b)(i) of the PCA. Under the conditional warning, the said subsidiary was also to assist the CAD in its investigations concerning the investment fund and conform to the DPA’s conditions. In addition, the DPA provided for the subsidiary’s return of US$61 million to the Malaysian Government agencies. The MAS also ordered the subsidiary to select an independent third party to consider and advise on its follow up remedial action. The US$122 million is the biggest payment made by a financial entity to the Singapore Government to date to settle matters that came about from its participation in such criminal activity.

In July 2018, a Singaporean was imprisoned for 33 months for participating in the greatest bribery and fraud conspiracy involving the United States Navy. As a primary contract expert hired by the US Navy, Sharon Rachael Gursharan Kaur got over S$130,000 in money and luxury holidays for providing confidential information to a Malaysian defence contractor, one Leonard Glenn Francis. Francis bribed US Navy employees so that they would give him “inside information” that assisted in his Singapore company obtaining contracts and charging high prices for goods and services, defrauding the US Navy of roughly US$35 million. Kaur gave information associated with 16 US Navy agreements to Francis of which 11 contracts amounting to US$48 million were given to his company. The High Court sentenced Kaur to 40 months’ imprisonment on the Prosecution’s appeal. The High Court was not persuaded by Kaur’s submission that she was just a civilian working for the US Navy rather than a public officer. The High Court found that a Singaporean who is hired by a foreign Government would already be considered involved in foreign public sector corruption, regardless of whether s/he was engaged as a civilian rather than as a military officer.

In December 2017, a shipbuilding company with its headquarters in Singapore committed to a DPA with the United States Department of Justice in relation to corrupt money paid to officers working for a Brazilian state-owned business, Petroleo Brasileiro SA (“Petrobras”) and others. The company hid such payments by giving kickbacks to a third party, on the pretext of lawful consulting contracts, which then, in turn, transferred the kickbacks for Petrobras and others. Under the DPA with the United States Department of Justice, the company was agreeable to a financial penalty of US$422.2 million to the United States, Brazil and Singapore.

In Singapore, the company was given a conditional warning from the CPIB for participating in corrupt activities under section 5(1)(b)(i) of the PCA and had to comply with the conditions under that warning, which included committing to pay US$105.5 million to Singapore as part of the global payment sum mentioned above.

Further, a lawyer from the company who prepared contracts between the company and its Brazilian agent was aware that the contracts had a fraudulent character, intended to hide bribes to Government party officers. The bribes were represented to be lawful consulting contracts given to a third party, and facilitated the company getting agreements for building rigs. In 2017, the lawyer responsible made a plea arrangement with the United States Department of Justice to assist in investigations against the company and its American office. He was duly convicted of engaging in a conspiracy to breach the bribery laws of the Foreign Corrupt Practices Act and received probation for 1 year as well, amongst others, a fine of US$75,000. He was permitted to carry out his probation obligations in Singapore, where he lived.

What are the recent cases involving domestic bribery?

Conventional or traditional cases

In October 2020, 7 persons associated with a Singapore shipbuilding practice were prosecuted for several crimes involving corruption supposedly committed in the period 2014-2017. The practice’s manager and two others (from other corporations) were prosecuted for conspiracy to secure gratification from certain subcontractors. The 3 of them had been accused of jointly securing about S$879,900 in bribes from the subcontractors that they would distribute amongst themselves. The subcontractors’ respective Directors were prosecuted for bribing the 3 accused to incentivise them to advance their business motives with the shipbuilding practice. The manager of a separate logistics corporation also received bribes as a reward for drafting fake receipts using the corporation’s letterhead. The corporation’s manager was accused of falsifying the corporation’s documents several times, and to have provided false documentation to 2 subcontractors to make it seem like they had sought such services when they had not done so.

In July 2020, a previous Deputy Group Director of the Land Transport Authority (“LTA”), one Henry Foo, was prosecuted for taking around S$1.24 million in bribes, via loans, to promote the financial interests of contractors and subcontractors with the LTA during the period 2014 to 2019. The largest bribe reportedly requested by Foo was S$200,000. Foo also allegedly sought to get gratification through a roughly S$30,000 loan from a subcontractor in exchange for promoting the subcontractor’s financial interests with the LTA.

6 persons and a corporation that were involved in making the loans out to Foo to promote their own financial interests were also prosecuted.

Over and above the charges involving bribery, Foo was alleged to have cheated his fellow LTA employees into loaning him about S$726,500 during the period 2008 to 2019. Foo intentionally hid the fact that he borrowed the said amount to continue gambling.

Cases involving technology

In October 2020, a previous manager from the National Library Board (“NLB”), one Ivan Koh, confessed to accepting bribes amounting to roughly S$581,000 from a previous employee, one Low, in return for promoting that employee’s economic interests with NLB. Low had also confessed to giving bribes to Koh. Back then, Koh’s role was to lead NLB’s foray into e-books and other computer and information technology sources and let Low know that this was a business opportunity worth exploring. Low subsequently established 3 corporations that specialised in creating digital resources. To facilitate Low’s economic interests with NLB, Koh revealed confidential intelligence to Low on the resources that NLB had been considering and how such resources were evaluated. With such inside knowledge, Low could provide such material to NLB given the chance. Koh also guided Low on quotations. In exchange, Koh requested for money for personal reasons. Low consequently allocated roughly 30% of all proceeds from the 3 corporations’ contracts with NLB to be provided as bribes to Koh. Both Koh and Low pleaded guilty to bribery offences.

Separately, in October 2020, 2 Directors of a network solutions corporation had to pay fines amounting to S$5,400 for committing crimes pursuant to the PCA and the Penal Code. A previous assistant manager had already been fined S$3,000 and S$2,400 for crimes under the PCA in June 2020. He had received S$2,400 in corrupt payments from the 2 Directors in return for suggesting that their corporation be the supplier for his events management company. To “cover up” the bribes, one of the Directors of the corporation fabricated data in accounting files by stating that the payments were necessary business costs that the corporation had to bear.

It has been observed that with great strides in information technology (“IT”) especially in response to the coronavirus pandemic, there may be more corruption cases involving IT or technology procurement. Hence the authorities may concentrate on corrupt behaviour in these areas.

 

Insider Trading

With effect from 17 March 2015, the MAS and the CAD have been working together to probe wrongdoing, including insider trading, under the SFA. Both authorities entered this new working relationship to consolidate effective and efficient enforcement against such wrongdoing. Under this consolidated regime both MAS and CAD work together to conduct investigations from the outset. The discretion over whether a matter involving market misconduct calls for a civil or criminal punishment would be exercised upon conclusion of investigations.

MAS officials have been “gazetted” as CAD officers, conferring more authority to them to look into wrongdoing under the SFA and enabling more thorough investigations into market misconduct. MAS’ greater investigative authority enables them to carry out search and seizure, and to require financial establishments to observe client accounts.

Depending on the applicable provisions, with effect from 1 or 8 October 2018, the SFA was revised to extend to cover: (i) “over-the-counter” contracts over and above “exchange-traded futures contracts”; (ii) certain trades in the capital market and (iii) derivative contracts from securities, subject to certain exceptions or limited exceptions.

In collaboration with other bodies or organisations, the Singapore Institute of Directors have issued a “Guide on the Prevention of Insider Trading”, which sets out some best practices, accessible here.

What amounts to insider trading?

Insider trading is a type of corporate fraud that may take place when handling the buying and/or selling of stocks during a securities (or related) transaction. It occurs when the transaction has been affected by the individuals involved who come to know of future events, thereby putting the trader in a position of unfair financial advantage as s/he can profit from it.

Insider trading involves knowingly trading in a company’s stocks or other securities by a person who gets or has access to confidential or non-public information about the company. If a person takes advantage of such exclusive or privileged access, s/he would be in breach of fiduciary duty.

The provisions that criminalise insider trading are set out in sections 218 and 219 of the SFA which applies to connected persons and “insiders” respectively. The requirements to attribute criminal responsibility are standardised in both provisions, save for connected persons, who would be presumed to know about the significant, non-public information that was “not generally available” when s/he has such information [section 218 of the SFA].

To hold someone responsible for insider trading under section 218 or 219 of the SFA, it must be shown that:

• The accused has information pertaining to a company, business trust or collective investment scheme (“CIS”);
• The information is “not generally available”;
• The information is materially market-sensitive;
• The accused is aware or should be aware that the information is not generally available and is of a materially market-sensitive nature; and
• The accused deals with the securities, securities-based derivatives contracts or CIS units, get another person to do so, or conveys the information to a third party who s/he is aware or ought to be aware is likely to handle capital markets products or get another person to do so.

What are the types of insider trading?

The typical insider trading case involves a corporate official like a Director or Chief Financial Officer misusing non-public information to trade in the corporation’s shares to derive some advantage or get around some detriment. Corporate “insiders” who are in a fiduciary position could be in breach of the SFA if they use significant non-public information for their own personal gain.

Typically, there are 2 participants in the world of insider trading – the “tipper” and “tippee”. The tipper is the individual who breaches her or his fiduciary duty to the company by leaking material, privileged, non-public information that has been given to her or him. The “tippee” is the individual who exploits the leaked information to try to profit from trading in such information.

In other cases, a third party “outsider” who receives such non-public insider information such as the partner of a corporate official or a stockbroker might be held responsible for breaching insider trading laws if s/he took advantage of learning of such information.

What is the reason for criminalising insider trading?

The “mischief” of insider trading is in adjusting the playing field in such a way that it would be unfair to others who have legitimate interests in the market. Anyone who knowingly has access to such non-public information should not be permitted to trade, regardless of whether or not they are associated with the company. Trading while knowingly having access to non-public, price-sensitive information is forbidden because it prioritises some investors in the company over others who do not have such privileged access.

The applicable provisions of the SFA have been designed to “level the playing field” by holding fiduciary corporate insiders and non-fiduciary outsiders responsible for their involvement in such wrongdoing.

The rationale for criminalising insider trading in Singapore is that such activities are “antithetical to the most fundamental tenets of market fairness and efficiency, and erodes the confidence of investors”. Even if such trading does not cause harm to innocent parties, insider trading would harm the overall market.

What is Singapore’s approach to insider trading?

Singapore takes an “information-connected” approach to insider trading. If a person trades while knowingly accessing inside information, s/he will be held criminally responsible for insider trading. Criminal responsibility no longer depends on her or his connection with the company.

Singapore’s approach set out above enables the authorities to take action against insider trading more effectively, because it is not necessary for them to prove the individual’s connection with the company. In particular, others not connected to the company who managed to get access to insider information can still be held criminally responsible.

What are the main provisions on insider trading under Singapore law?

Insider trading is covered, amongst others, in sections 218 and 219 of the SFA. Applicable provisions, including section 54 of the CDSA on acquiring, possessing, using, concealing or transferring benefits from criminal conduct may also be invoked to confiscate such proceeds.

Connected persons

The following considerations have to be proven to hold a connected person criminally responsible for a breach of section 218 of the SFA:

• the individual concerned is connected to a company;
• the individual concerned has information concerning that company;
• the information is “not generally available” (for the purposes of s 215 of the SFA);
• materiality of information: a reasonable person would, if such information were available, appreciate that it would have a “material effect” on the price or value of that company’s securities (on this point, considering s 216 of the SFA, the Prosecution need not demonstrate an actual effect on the company’s share price);
• the individual concerned knows or should know that the information is generally not available; and
• the individual concerned knows or should know that if such information were available, it would influence the price or value of that company’s securities.

Unconnected persons who are “Insiders” in that they access material market-sensitive information

In the main, section 219(2)(a) of the SFA forbids an individual who has no connection to a company but holds significant market-sensitive information that s/he knows or should know is significant, market-sensitive and not generally available, and such information could have a “material effect” on the price or value of securities, from entering into certain transactions related to those securities.

The following considerations have to be proven to hold such “insiders” criminally responsible for a breach of section 219 of the SFA:

• the person involved (i.e. the “insider”) comes into information that is generally not available, but if the information were so, a reasonable person would appreciate that it could have a “material effect” on the price or value of the company’s securities and related proprietary interests, where applicable (again, on this point, considering s 216 of the SFA, the Prosecution need not demonstrate an actual effect on the company’s share price); and
• the “insider” is aware that:
  the information is “not generally available” (for the purposes of section 215 of the SFA);
  if such information were available, it could influence the price or value of those securities or related proprietary interests, where applicable, and;
• the “insider”, whether as principal or agent, subscribes for, buys, sells, or enters into an agreement to any of these ends such securities, securities-based derivatives contracts or CIS units, where applicable, or procures a third party to do so [section 219(2) of the SFA]; or
• the “insider” communicates, whether directly or indirectly, such information to another person if s/he knows or should know that the other person would or probably subscribe for, buy, sell, or enter into an agreement to any of these ends such securities, securities-based derivatives contracts or CIS units, where applicable, or procures a third party to do so [section 219(3) of the SFA].

How is the law applied? Case Study – Lee Chee Fai Kevin v Monetary Authority of Singapore (on breach of section 218 of the SFA)

In Lee Chee Fai Kevin v Monetary Authority of Singapore [2012] SGCA 12, the facts were as follows. Lee Chee Fai Kevin (“Lee”) was a Senior Officer at WBL Corporate Private Limited (“WBL”), a public company listed in Singapore Exchange Ltd (“SGX”). He was the Group Manager of WBL’s Enterprise Risk Management section. On 2 July 2007, Lee came across certain information regarding the corporation’s financial status. Consequently, he sold 90,000 of his shares in WBL on 4 July 2007. On 3 occasions from 12-17 July 2007, WLB and its subsidiaries made declarative warnings on the SGX website regarding its Q3 FY07 position. On 14 August 2007, WBL declared a loss of S$27.3 million for the said quarter. The MAS brought a civil action against Lee on the basis of insider trading, requiring that he pay a civil penalty. The High Court held in favour of MAS. Lee appealed against the decision.

“Not generally available”

The Court of Appeal upheld the High Court’s judgment, finding that the transaction amounted to insider trading. On the element of information “not generally available”, the Honourable Court referred to section 215 of the SFA, holding that a “commonsensical” interpretation of the provision should be taken. The Honourable Court was not persuaded by Lee’s submission that he had generally available information such that another ordinary investor would have arrived at the same conclusion. It held that the particulars of the information that Lee showed that the inferences drawn from such information were of “better quality”. The information was derived from financial outcomes and the awareness of the Board’s relevant conversations. In addition, the information in this case was from WBL’s Senior Management, which made it more dependable than information from outside sources. Hence, the Court of Appeal held that the information that Lee had was “not generally available” for the purposes of section 215 of the SFA. The “presumption of knowledge” pursuant to section 218(4) of the SFA was invoked, with the burden of proof moving to Lee to rebut the presumption.

“Might have a Material effect”

The Court of Appeal held that to prove that information was “material”, it must be shown that there was a “substantial likelihood” that the information would affect the ordinary investor’s conclusion. Lee’s prior knowledge of WBL’s financial standing that was revealed at the meeting on 2 July 2007 was the reason why he had sold his shares in the company two days later. The Honourable Court turned to section 216 of the SFA, and mindful of section 218(4) of the same, found that it was not necessary to show an actual effect on the company’s share price to demonstrate materiality.

“Knows or ought to know that information is not ‘generally available’”

For the purposes of section 218(1)(b) of the SFA on the “ought reasonably to know” aspect, the Court of Appeal maintained that this aspect called for an objective followed by a subjective interpretation, with due regard to all relevant considerations, such as the accused’s state of mind. Accordingly, when looking into questions of whether the accused should reasonably have known that the information was “not generally available” or that such information could have a “material effect”, the Court would first take into account the perception of a reasonable person. The Court would then look into the accused’s situation (including her or his state of mind, commercial acumen and experience) to ascertain if there were subjective considerations that would affect his reaching the same conclusion.

In this case, even in the absence of the presumption of knowledge pursuant to section 218(4) of the SFA, there was enough evidence on the balance of probabilities to conclude that Lee knew that the information was “not generally available”, and that if it were so, it could have a “material effect” on the WBL share price.

In the premises, the civil penalty of S$67,500 was maintained.

What penalties does a person accused of insider trading face?

The SFA provides for separate civil and criminal punishments for insider trading. Section 232(1) of the SFA enables the MAS to take civil action against the accused with the agreement of the Prosecution.

Civil penalty

Section 232(2) of the SFA essentially states that should the Court be convinced on the balance of probabilities that the party accused has breached a provision under Part 12 of the SFA, the Court can require her or him to pay a civil penalty of the amount: (i) up to three times the value of the financial benefit obtained, or loss averted from the wrongdoing; or (ii) S$2 million, whichever is the higher amount.

If the Court is of the view on the balance of probabilities that the party accused has breached a provision under Part 12 of the SFA but did not make financial gains or avert any loss from its actions, it is open for the Court to require payment of at least S$50,000 if the party is not a company, or at least S$100,000 if the party is a company.

The advantage of proceeding with a civil action is that the requisite standard of proof is on the balance of probabilities rather than beyond a reasonable doubt. This means that all the Prosecution would have to show is that, on balance, the party so accused is more likely than not to have committed the offence.

Criminal punishment

Section 221 of the SFA states that a person who is found guilty of breaching sections 218 or 219 of the same faces a fine of up to $250,000, or 7 years’ imprisonment or both.

However, if a Court has made an order against the party involved to pay a civil penalty under section 232 of the SFA, or the party involved has agreed with the MAS to pay a civil penalty under the said section, then that party cannot be further held criminally responsible.

Section 333 of the SFA enables a Court to impose a fine of up to two times the highest amount set out for the relevant crime. Section 331 of the SFA provides that where a company has committed a crime under the SFA, its corporate officers, such as the Director, Executive or Secretary who was aware or participated in the forbidden transaction can be held responsible, over and above the company.

Section 54 (previously section 47) of the CDSA provides that a person found guilty of acquiring, possessing, using, concealing or transferring benefits from criminal conduct faces a fine of up to S$500,000, or up to 10 years’ imprisonment, or both on each charge. If the wrongdoer duly convicted is a corporation, it faces a fine of up to S$1 million or twice the value of the asset in regard to the offence, whichever is the higher amount.

If I accept a civil penalty to avoid criminal prosecution, what is the likely amount I would have to pay?

The primary objective of the civil penalty regime is to discourage conduct that can harm the business community in Singapore in a balanced, measured way. Aside from the provisions mentioned above, the SFA does not provide guidance on the considerations that should be taken into account in deciding the civil penalty that should apply. In the past, some judges have suggested a three-tiered approach in determining the appropriate civil penalty:

• First, determine the “starting point”. Under section 232(2) of the SFA, the starting point is S$2 million, which can be modified upwards. If the party accused did not make financial gains or avert any loss from its actions, the starting point would be S$50,000 for a person, or S$100,000 for a company.

• Next, take into account the following 7 considerations:
  1. Negative impact on markets and the severity of the impact;
  2. The degree of intent or recklessness from the wrongful conduct;
  3. If the party that incurs the penalty is an individual person as opposed to a corporation or entity;
  4. The quantum of financial gains made or loss averted, if at all;
  5. The party’s actions after having committed the wrongdoing;
  6. How hard it was to find out about the offending conduct and take action against it; and
  7. The party’s actions before having committed the wrongdoing.

• Then, address the following pertinent questions:
  1. Would there be a “deterrent effect” from making the order for a civil penalty?
  2. Would such a penalty be “arbitrary or capricious”?
  3. Would such a penalty contravene “totality and parity principles” (here due regard must be had not to impose an “unduly crushing” penalty, and a distinction should be drawn between individual persons and companies).

Cases involving Insider Trading

Civil sanctions instead of criminal prosecution

In 2015, the MAS imposed civil sanctions of S$9.597 million on one Lim Oon Cheng (“Lim”) for breaching the relevant provisions forbidding insider and wrongful trading under the SFA. By accepting the civil sanction, Lim was would not face criminal prosecution.

Lim bought shares of Singapore Petroleum Company (“SPC”) amounting to S2.27 million and Keppel Corporation Ltd (“KCL”) shares from mid to late May 2009, while having non-public, market-sensitive information concerning PetroChina International (Singapore) Pte Ltd [“PIPL”]’s purchasing of SPC shares from KCL’s and PIPL’s offer of those shares. PIPL’s purchase of SPC shares and the latter offer of those shares were declared after Lim’s purchase. In doing so, Lim had infringed section 219(a) of the SFA for insider trading, with profits of S$3.818 million from such trades. On 19 May 2009, Lim declared that he would sell 300,000 SPC shares at the heightened value of S$4.39. In doing so he committed false trading pursuant to section 197(1)(b) of the SFA because he did not really wish to effect the sale, but create a deceptive impression in the market for SPC shares.

Lim confessed to the crimes and accepted the civil sanction of S$9.547 million for insider trading and another S$50,000 for wrongful trading.

Default Judgment for failing to enter an appearance in Court

On 27 January 2022, the MAS stated that it secured a civil default judgment of S$164,750 against one Liao Chun-Te for his involvement in insider trading in Oceanus Group shares. The default judgment against Liao had been secured on 26 October 2021 because he did not enter an appearance in Court.

Liao, a foreigner, sold those shares when he had come to know of non-public and significant market-sensitive information involving Oceanus Group’s potential rights issue.

Oceanus Group was listed in SGX. On 7 July 2013, Oceanus Group declared the issuance of fresh ordinary shares. The price of S$0.029 per rights share was a discount amounting to about 42% of the closing price for each ordinary share on the day before. Prior to Oceanus Group’s declaration, Liao had committed to subscribe for the newly-issued shares, knowing that they would be issued at a discounted rate. While having such non-public and market-sensitive information, Liao sold 6 million Oceanus Group shares three times, thereby averting a loss of about S$65,900.

MAS invoked the civil sanctions regime under section 219(2)(a) of the SFA against Liao for insider trading, serving the Court documents on him while he was abroad. As he did not enter an appearance, judgment in default was entered against him on 26 October 2021.

Giving “insider information” to outsiders

On 22 July 2021, in a case involving the collaborative investigations of both the MAS and CAD, three persons were charged with various counts of breaches under the SFA and CDSA, attributable to their alleged insider trading of shares of the SGX-listed company, BIGL. The offences were reported to involve conveying “insider information” about the company’s shares, and the receipt or transfer of property that were proceeds from their criminal conduct.

The three persons facing the charges were one Tan Chee Keong, Tay Yew Khem and Hui Choy Leng. Tan was the CFO of BIGL, and was alleged to have given “insider information” regarding the sale of BIGL’s businesses to Tay and Hui, who were suspected of buying BIGL shares knowing of such information. Further, Tan reportedly got S$30,000 from Tay in exchange for giving such “insider information”. In addition, Hui was reported to have misled OCBC Securities Private Limited (“OSPL”) through buying BIGL shares from her father’s account without informing OSPL that she was the one responsible for those purchases.

Tan has been accused of 3 charges, including 2 charges of conveying “insider information” involving BIGL shares pursuant to section 218(3)(a) of the SFA and 1 charge of securing property considered to be proceeds from his alleged wrongdoing pursuant to section 47(1)(c) of the CDSA (as it was then).

Tay has been accused of 13 charges, consisting of 12 charges of insider trading in BIGL shares under section 219(2)(a) of the SFA and 1 charge of handing over property considered to be Tan’s proceeds from his alleged wrongdoing pursuant to section 47(2)(b) of the CDSA (as it was then).

Hui has been accused of 7 charges consisting of 6 charges of insider trading in BIGL shares pursuant to section 219(2) of the SFA and 1 charge of unauthorised trading pursuant to section 201(b) of the SFA.

Imprisonment

Leong Chee Wai, E Seck Peng Simon and Toh Chew Leong

On 10 July 2019, the State Courts found that two traders from a transnational fund management company had plotted with their friend, an agent of a stockbroking company to secure financial gains of S$8.07 million over a 7-year period. About 40 SGX-listed companies such as Ascendas Real Estate Investment Trust, CapitaMalls Asia and Global Logistic Properties along with foreign-listed companies were affected or targeted.

Leong Chee Wai, E Seck Peng Simon and Toh Chew Leong pleaded guilty to over 30 charges each under the SFA. The illicit trading scheme enabled the culprits to make over S$2 million each.

The offenders were involved in “front-running”, where a broker takes advantage of his prior knowledge of confidential, price-sensitive information regarding share orders to wrongfully use such information to trade in advance in the same security, with a view to profiting for his own benefit when the stock price changes.

Leong and Toh were senior equity representatives of First State Investments Singapore (“FSIS”) at the material time. Leong colluded with E Seck Peng to benefit financially from confidential information about FSIS intended orders. The terms of reference for his office included carrying out the trading orders made by FSIS’ portfolio managers. E Seck Peng would rely on his personal trading account with UOB Kay Hian to make orders, often before the FSIS trades had been lodged. When the share price began to increase due to the substantial FSIS trades, E Seck Peng would sell his stock to reap the financial rewards. The proceeds would be divided equally between the pair.

The States Courts sentenced Leong to 3 years’ imprisonment; E Seck Peng to 2 ½ years’ imprisonment; and Toh to 1 year and 8 months’ imprisonment.

Over and above their respective imprisonment terms, the MAS meted out 15-year prohibition orders against Leong and E Seck Peng and a 13-year prohibition order against Toh. This means that they have been barred from carrying out trading activities regulated by the SFA for the said periods.

Soh Guan Cheow Anthony v Public Prosecutor and another appeal

In Soh Guan Cheow Anthony v Public Prosecutor and another appeal [2017] 3 SLR 147; [2016] SGHC 235, the facts were as follows. Soh was the Director and majority shareholder of Jade Technologies Holdings Ltd (“Jade”), which had shares that were traded in SGX. Sometime in September 2007, Soh concluded a credit/loan facility agreement that promised Jade shares as security for the loan. Under the agreement, a threshold limit was set for the value of Jade shares. If the market value of such shares fell below the limit, Soh would have to make up for the difference.

When the market value of the shares fell below the limit, Soh suggested a voluntary general offer (“VGO”) for the other shares in Jade that were not held by him. The VGO had been declared in SGX, prepared by Soh’s “investment vehicle”, Asia Pacific Links Ltd (“APLL”). At the time, Soh was the Director and only shareholder of APLL and also was the Director of Jade. During the VGO period, Soh traded in a considerable number of Jade shares without notifying Jade and SGX. Soh also ensured that Oversea-Chinese Banking Corporation (“OCBC”), which was APLL’s financial adviser for the transaction, to receive documents that claimed to state that the funds in a particular account of another bank were accessible to meet APLL’s responsibilities under the VGO. OCBC later found that the documents had not been given by the other bank. The VGO was retracted shortly after, due to lack of proof of sufficient funds. Before the VGO announcement, Soh told Jade’s Company Secretary that he had bought 5.5 million shares.

In short, Soh faced charges under the SFA in regard to insider trading, wrongful trading and market-rigging, manipulating the creation of take-over offers that he did not intend to implement.

The High Court held that Soh was aware that both he and APLL did not have sufficient funds to carry out their responsibilities under the VGO. It found that the evidence demonstrated that Soh did not have a reasonable basis to believe that the funds allegedly in the other bank account could be used as security on which banker’s guarantees could be secured. Further, even if Soh had reason to have such a belief, he did not have reasonable basis to think that OCBC wished to grant a loan relying on the banker’s guarantee taken from the other account. In addition, the supposed breaches of duty by APLL’s advisers were mere distractions, i.e. “red herrings”.

The High Court found that Soh effected the VGO declaration intending to increase or retain Jade’s share price for his own benefit. First, he was surreptitiously selling his Jade shares while offering to purchase other shareholders’ shares and used a substantial portion of the money from those sales to discharge his financial responsibilities. Second, he depended on a draft report that supposedly presented a healthy estimate of coal reserves involving Jade’s subsidiary, which did not have such an estimate. Third, Soh concluded a conditional agreement with the largest individual shareholder in Jade to keep him from tendering his shares for the purposes of the VGO.

While the VGO was in effect, Soh traded in Jade shares fully aware that APLL did not have enough funds to realise the VGO. The High Court found that Soh’s sale of 15,000,000 shares after being informed that the requisite documents had not been submitted by the other bank and after deciding to retract the VGO was particularly striking. Soh had also sanctioned the provision of a false report to SGX declaring that he had bought 5.5 million Jade shares, which was false in two ways. First, Soh had not bought that number of shares on the day he said he had. Second, the 5.5 million Jade shares that were bought earlier were not purchased under his own name.

Soh was convicted considering that he had made others trade in Jade shares while having information that was not generally available, but were it so, a reasonable person would have expected it to affect the share price. The relevant information that Soh had was that he did not have enough financial means to effect or realise the VGO. From his wrongful conduct, Soh was able to delay further margin calls and evaded default of his financial responsibilities, securing S$7.8 million from selling his shares in Jade.

As dishonesty could be considered an aggravating consideration for crimes that did not include it as an element, the High Court, having duly considered the gravity of the offences coupled with other relevant considerations, imposed three sentences to run consecutively – indicative of Soh’s culpability. Accordingly, Soh’s 8-year imprisonment term was increased to an aggregate sentence of 11 years’ imprisonment.

Conclusion

Considering the Singapore Courts’ close scrutiny of insider trading, corporate officers from Directors to Company Secretaries should err on the side of caution when making the choice to trade in their company’s shares should they come to know of confidential, privileged and/or market-sensitive information.

 

Money Laundering

What does money laundering mean?

Money laundering refers to the “washing” (laundering of) “dirty money” derived from criminal activities to make it seem like the money comes from a legally valid source. It enables wrongdoers to cover up their ill-gotten gains and enjoy them, without revealing their source.

Prohibited weapons sales, smuggling and organised criminal conduct involving drug dealing and/or prostitution can be profitable. So can bribery and corruption, computer fraud, embezzlement and insider trading. Such activities may encourage wrongdoers to “wash” their “dirty money”.

How is the money “washed”?

Placement. First, the ill-gotten gains are placed into the financial system, either by dividing a large amount of money into less obvious, smaller amounts that are then put into a bank account, or through using money in other forms such as cheques or bank drafts which are then placed into accounts elsewhere. During the placement stage, funds are often placed fairly near where the criminal activity has taken place.

Layering. At this stage, the suspect moves the funds around to disguise their source. S/he might convert the funds into investments or transfer the funds to different accounts worldwide, particularly in countries that are indifferent to money laundering activities. Sometimes the suspect can indicate that the converted funds involve goods and services, making them seem to be legitimate. During the layering stage, the suspect might opt to use an offshore location or a well-known regional or international centre. To this end, transient bank accounts at different places might be used, concealing where the proceeds had originally come from.

Integration. Next, the suspect seeks to re-introduce the funds into the economy, by purchasing assets, property or investing in a business. In doing so, s/he is trying to disguise the illegal origin of the funds. The suspect might resort to investing in other countries.

What are the main provisions on money laundering under Singapore law?

Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (“CDSA”), the laundering of finances from criminal activities including 13 kinds of drug dealing in its First Schedule and a considerable number of other crimes set out in the Second Schedule would be considered money laundering, which is a criminal offence. While the CDSA provisions do not specifically refer to “money laundering”, they make it an offence to handle property that represents the benefits of drug dealing or other criminal conduct. The Terrorism (Suppression of Financing Act) 2002 was passed to implement the International Convention for the Suppression of the Financing of Terrorism and related matters. There can be an interplay between terrorism financing and money laundering when a person collects money from legitimate or illegal sources, then uses methods of “placement, layering (covering up), and integration (into the economy for easy use)” to support terrorist ends.

The CDSA criminalises, amongst others, 3 kinds of money laundering activity:

When individuals suspected of criminal conduct “wash” their own “dirty money”

Sections 53(1) and 54(1) of the CDSA provide that any person who launders her or his own money from drug dealing or other criminal conduct respectively would be guilty of an offence. When a person: (i) hides any proceeds from drug dealing or criminal conduct; (ii) transforms or distributes such proceeds; or (iii) takes such proceeds away from Singapore, then s/he would be guilty of a criminal offence.

When a person gains from another’s money laundering

Sections 53(2) and 54(2) of the CDSA provide that any person who knowingly or has reasonable grounds to believe that any proceeds from drug dealing or other criminal conduct respectively and receives or uses such proceeds would be guilty of a criminal offence. These sections cover other individuals who are not suspected of drug dealing or other criminal conduct. If you purchase a product from a person who is participating in certain serious criminal activities knowing that the product was derived from such activities, you may be charged under either of these sections.

Assisting in money laundering, or going into an arrangement that involves money laundering

Sections 50(1) and 51(1) of the CDSA provide that any person who knowingly or has reasonable grounds to believe that another person’s proceeds came from drug dealing or other criminal conduct respectively and goes into an arrangement that involves hiding, converting or distributing such proceeds, or taking such proceeds away from Singapore would be guilty of a criminal offence.

If you knowingly help another person in hiding any proceeds that s/he derived from drug dealing or other criminal conduct for the purpose of escaping criminal prosecution or confiscation of those proceeds, you could be caught by either of these sections.

Generally, the Prosecution would have to show that the person responsible had entered into some type of arrangement (e.g. involving commission) with the money launderer to secure a conviction under either of these sections.

A person who breaks any of the above laws faces a fine of up to $500,000 or up to 10 years’ in prison, or both. If the party duly convicted is a corporation or entity, that party can be fined either up to $1 million or up to twice the relevant property’s value, whichever is the higher amount.

Having or using any property reasonably suspected of being proceeds from money laundering

Section 55(1) of the CDSA makes it an offence to have or use any property which may reasonably be suspected of being proceeds from drug dealing or other criminal conduct. The accused would have to show how s/he came to have or use such property, or risk being found guilty of the offence. Any person found guilty faces up to $150,000 fine and/or 3 years’ imprisonment. Any corporation or entity found guilty faces a fine of up to $300,000.

Dishonestly receiving stolen property

Section 411 of the Penal Code 1871 makes it an offence to dishonestly receive stolen property. Any person who knows or has reason to believe property to be stolen and dishonestly gets or keeps such stolen property faces up to 5 years’ imprisonment or fine or both. This provision can be used in situations such as when you are aware that your friend has taken money from her or his employer and you knowingly hold on to that money for your friend.

Assisting in hiding or distributing stolen property

Section 414 of the Penal Code 1871 makes it an offence to willingly help in hiding or distributing stolen property so long as the individual responsible knows or has reason to believe that the property was stolen. Any person who is found guilty of committing this offence faces the same sentence as set out above i.e. up to 5 years’ imprisonment or fine or both.

Do I have a duty to report suspicious transactions?

Yes. As mandated by section 45(1) of the CDSA, you should submit a Suspicious Transaction Report (“STR”) if you have knowledge or reasonable grounds to believe that any proceeds have some link, or is intended to be used in relation to, drug dealing or other criminal conduct. Failure to do so as soon as is reasonably possible is an offence. An individual who breaches section 45(1) of the CDSA faces a fine of up to $250,000 or 3 years’ imprisonment or both, and a corporation or entity can be fined up to $500,000 for doing so.

Can I be charged for having or using property that I have reason to believe represents proceeds from drug dealing or other criminal conduct?

Yes. Section 55(1) of the CDSA states that any person who has or uses any property that can be reasonably suspected of representing any proceeds from drug dealing or other criminal conduct without verifying how the other person got such property would be guilty of an offence. Section 55(2) provides that an individual who is duly convicted can be fined up to $150,000 or imprisoned for up to 3 years, or both. If the party duly convicted is a corporation or entity, it can be fined up to $300,000.

Can I be charged for moving money valued at above SGD$20,000 into Singapore, or outside Singapore?

Yes. Section 60(1) of the CDSA makes it a crime to move or try to move money into or outside of Singapore that is above the “prescribed” or “threshold” amount (or an amount of equal value should it be in foreign currency) without reporting it to the authorities. Generally, the “prescribed amount” is SGD$20,000 or its equivalent. This means that a person who moves or tries to move money into or outside Singapore that is over SGD$20,000 or its foreign equivalent without reporting it could be charged. Section 60(3) of the CDSA provides that a person charged accordingly can defend herself or himself if s/he can show that s/he did not know and had no reasonable ground to believe that the container used had money in it.

Section 60(2) of the CDSA states that a person duly convicted faces a fine of up to $50,000 or up to 3 years’ imprisonment or both. The Corruption, Drug Trafficking and Other Serious Crimes (Cross Border Movements of Physical Currency and Bearer Negotiable Instruments) (Exemption) Order 2007 and the Corruption, Drug Trafficking and Other Serious Crimes (Cross Border Movements of Physical Currency and Bearer Negotiable Instruments) (Exemption) Order 2010 provide for some exceptions.

Considering the above, you should not travel out of Singapore with over SGD$20,000 or its foreign equivalent without declaring it to the authorities.

Is money laundering in the proceeds of offences committed in other countries punishable in Singapore?

Yes. Section 2(1) of the CDSA on general interpretation contemplates that the primary offence (whether drug dealing or other criminal conduct) that resulted in money laundering could happen elsewhere, provided that the primary offence was against the law of the other country, and that offence would amount to an offence under the First or Second Schedules of the CDSA had it taken place in Singapore. Under section 56(3) of the CDSA, the Prosecution would have to submit some evidence that meets each of the elements of foreign drug dealing or a foreign serious offence to trigger the presumption of drug dealing or other criminal conduct.

Which government agencies in Singapore investigate and prosecute money laundering activities?

The main agency responsible for investigating offences that involve money laundering is the CAD of the Singapore Police Force. The CNB and CPIB also investigate specific types of offences that involve money laundering.

The Prosecution looks into the charge for such an offence after consulting with the relevant authorities set out above.

Which authorities ensure compliance with anti-money laundering requirements?

Singapore is a member of the Financial Action Task Force (“FATF”) and the Asia/Pacific Group on Money Laundering (“APG”). Accordingly, amendments to relevant laws may be proposed to keep up with the standards set by the FATF or APG.

The MAS ensures compliance by promulgating guidelines and regulations, particularly for Banks and other Financial Institutions (“FIs”) in Singapore. On 1 March 2022, the MAS issued Notice 626 on the “Prevention of Money Laundering and Countering the Financing of Terrorism – Banks” which included guidelines on the following:

• Risk management;
• Customer due diligence;
• Record maintenance;
• Suspicious transaction reporting; and
• Policies within banks and financial institutions, auditing and training.

On 2 July 2021, the MAS shared a Consultation Paper that proposed to expand its investigative authority to enable it to collect evidence of misconduct. The Financial Institutions (Miscellaneous Amendments) Bill contemplates enabling the MAS to go into premises without notice beforehand or with a warrant from the Court in relation to investigations under the Securities and Futures Act 2001 or Financial Advisers Act 2001 if it is of the considered view that evidence may be destroyed. It also envisages that the MAS could seize evidence pursuant to a Court warrant when the accused does not conform to an order to produce evidence particularly when it is in danger of being destroyed or interfered with. The Bill seeks to empower the MAS to mandate that any person attend a verbal examination and statement-recording, with a warrant to ensure compliance. In certain cases, the MAS would have to provide the interviewee with a copy of the examination record when requested, particularly when doing so would not frustrate investigations. The proposed amendments also make it clear that the MAS could reprimand a former employee of a financial institution, or someone who has left the finance industry. In addition, the proposed amendments provide for the more efficient transfer of evidence between the MAS, CAD and the Prosecution.

Other agencies or bodies set out requirements for industries and professions to comply with, including:

• Casino Regulatory Authority of Singapore (regulates casinos);
• Accounting and Corporate Regulatory Authority (regulates corporate service providers and accounting body corporates or companies);
• Council for Estate Agents (regulates estate agents);
• The Law Society of Singapore (regulates lawyers [including ensuring compliance with and maintaining discipline with reference to the Legal Profession Act and the Legal Profession (Prevention of Money Laundering and Financing of Terrorism Rules 2015)]); and
• The Institute of Singapore Chartered Accountants (regulates professional accountants).

On 10 January 2022, the Legislature passed the Corporate Registers (Miscellaneous Amendments) Act 2022 that revises the Companies Act 1967 and Limited Liability Partnerships (“LLPs”) Act 2005 to enhance the transparency and beneficial ownership of companies and LLPs. The amendments were to bring corporate governance in line with the standards set by the FATF to make it more difficult to participate in money laundering and terrorist financing activities.

What is a confiscation order? When can it be invoked?

Generally, sections 6(1) and 7(1) of the CDSA provide that where an accused is convicted of one or more drug dealing or other criminal conduct offences, the Prosecution can seek a confiscation order from the Court. The Court will grant a confiscation order if it is convinced that the proceeds from the accused’s drug dealing or other criminal conduct have been obtained from such conduct.

If the accused has not been found guilty under the CDSA, proceeds of organised crime can still be confiscated pursuant to the Organised Crime Act 2015 (“OCA”). Under the OCA confiscation regime, it is not necessary to show that the organised criminal conduct is in the midst of criminal proceedings. The confiscation order would also not be affected by an acquittal. Here, the Prosecution can seek a confiscation order and the Court will grant one if it is persuaded, on the balance of probabilities, that the accused has participated in organised criminal conduct under the OCA and has obtained financial benefits from such conduct.

What is a prohibition order? When can it be invoked?

It is worth noting that a prohibition order can be imposed on both persons and entities. For our purposes we shall briefly touch on prohibition orders against individuals.

The MAS can issue prohibition orders against individuals to stop them from participating in activities that the MAS covers under the Securities and Futures Act 2001 (“SFA”), the Financial Advisers Act 2001 (“FAA”) and the Insurance Act 1966 (“IA”), which only applies to insurance intermediaries. In addition, most banks are answerable to the current prohibition order framework under the SFA and/or the FAA. Generally the prohibition order framework under the SFA, FAA and IA are comparable.

Section 101A of the SFA sets out various provisions on the basis for issuing a prohibition order against an individual. The MAS can give notice of such an order in, amongst others, the following circumstances:

• Where an individual’s status as a representative of the company or financial institution has been suspended or revoked;
• Where there is a legal basis for the MAS to withdraw an individual’s status as a representative;
• Where an individual has been found guilty of a crime pursuant to the SFA, or has breached or will probably breach any SFA provision, limitations or written directions issued by the MAS pursuant to the SFA;
• Where an individual has been found guilty of a crime under the SFA or has been found guilty of a crime whether in Singapore or abroad, involving dishonesty or fraud, or where the relevant crime included a finding that s/he behaved dishonestly or fraudulently;
• Where an individual has to pay a civil penalty pursuant to a Court order, or has agreed with the MAS to do so under Part 12 of the SFA on market conduct;
• Where an individual has been found guilty of a crime in relation to a breach of any foreign country’s laws or requirements with regard to a regulated activity carried out by her or him; or
• Where the MAS has instructed for the removal of an individual from office of a capital markets services licence holder pursuant to section 97(1)(h) of the SFA.

In deciding whether to impose a prohibition order against an individual, the MAS would take into account that individual’s “fitness and propriety”, including her or his good name, honesty and integrity, ability and financial acumen. The MAS Guidelines on Fit and Proper Criteria are updated regularly and are available on its website.

The MAS is to give an individual an opportunity to be heard before issuing a prohibition order against her or him. The individual concerned can make submissions to the MAS for due consideration before it determines whether or not to proceed with issuing a prohibition order.

Have Directors or employees of banks or other financial institutions been found guilty of money laundering?

Yes. Yeo Jiawei, previously a wealth planner, was found guilty of cheating his previous employer BSI Bank Limited (Singapore) and money laundering in connection with the 1MDB fiasco, and was sentenced to 54 months’ imprisonment. The former banker who was responsible for managing the operations of Falcon Private Bank’s Asia Branch, Jens Sturzenegger, pleaded guilty to 6 charges including failing to report suspicious transactions particularly by Low Take Jho into and out of the said bank to the Suspicious Transactions Reporting Office of the CAD. He was sentenced to 28 weeks’ imprisonment and had to pay a $128,000 fine.

Does a person accused of money laundering face corporate criminal liability or only criminal charges?

A person so accused might face both corporate criminal liability and criminal charges, depending on her or his role in the Company.

Are there other ways of resolving the matter?

Some provisions in Part VIIA of the Criminal Procedure Code 2010 permit Deferred Prosecution Arrangements (“DPAs”), for certain offences (including sections 45, 50, 51, 52, 53,54, 57,60,62, 63, 67, 68 or 69 of the CDSA. DPAs would be subject to the High Court’s approval.

However, a person would not be able to use the DPA to avoid criminal charges that s/he individually faces. Only companies and other entities can do so.

Which authority regulates FIs in Singapore? What punishment(s) apply for breaching anti-money laundering requirements?

The MAS prescribes requirements for FIs in Singapore.

Section 27B(2) of the Monetary Authority of Singapore Act 1970 provides that an FI that breaches an AML guideline or regulation could be fined up to $1 million and an additional $100,000 fine for everyday or part of it that it persists in breaching after conviction.

What are the other kinds of punishments that can be meted out to FIs?

The MAS can mete out other sanctions including:

• Withdrawal or suspension of the licence;
• Removing a Director or officer from office;
• Prohibition Orders (“POs”) preventing individuals from participating in the FI’s management; and
• Reprimands and warnings.

 

Cheating

​​What is cheating?

Considering that one of the primary motivations to commit corporate crime is to unlawfully profit from it, cheating can be said to be one of the underlying reasons for participation in such offences.

There are different forms of cheating as set out in the Penal Code 1871, and they vary in their severity and punishment(s).

Simple cheating

A person commits cheating when:

• S/he deceives another person fraudulently or dishonestly into either delivering property (which may also include virtual currency) or money to any person or giving permission to hold on to property or money; or
• S/he intentionally induces another person to either do something that s/he would not do or fail to do something that s/he would have done had no deception taken place; and

the wrongdoing caused or would probably cause harm to any person’s body, mind, reputation or property.

Section 415 of the Penal Code 1871 sets out several explanations and illustrations of which acts or omissions amount to cheating and certain acts or omissions that do not. One such illustration is where the wrongdoer falsely claims to be working for the Government and intentionally misleads a seller into giving him goods on credit that s/he does not intend to pay for.

Section 417 of the Penal Code 1871 states that a person found guilty of simple cheating faces imprisonment of up to 3 years, or fine, or both.

Cheating by impersonation

Section 416 of the Penal Code 1871 provides that a person can cheat through impersonation where s/he pretends to be someone else, or knowingly replacing one person for another, or making it appear as if s/he or any other person is someone else. This particular crime is committed whether the person impersonated is real or imaginary.

Section 419 of the Penal Code 1871 provides that a person found guilty of cheating by impersonation faces imprisonment of up to 5 years, or fine, or both.

Illegally Obtained Personal Information

Section 416A(1) of the Penal Code 1871 provides that a person who knows or has reason to suspect that any personal information about another person was obtained without that person’s permission and:

• obtained or retained such information; or
• gave, offered to give, communicated or made available by any means such information

to use it to commit or facilitate the commission of an offence would be committing a crime.

A person who illegally accesses another person’s computer to take credit card details for her or his own personal use could be committing an offence under this section. Likewise, a person who steals hardcopy documents that contain the identity of others could be committing an offence under this section.

Section 416A(5) of the Penal Code 1871 provides that a person convicted of illegally obtaining personal information faces up to 3 years’ imprisonment, or a fine of up to $10,000 or both.

Cheating and dishonestly inducing delivery of property

Section 420 of the Penal Code 1871 criminalises aggravated or more serious cheating. A person who cheats and hence dishonestly causes another to:

• deliver property to any person;
• make, modify or damage the entirety or any part of a valuable security (e.g. credit cards or automated teller machine (“ATM”) cards; or
• make, modify or damage a document that is signed or sealed which could become a valuable security,

faces up to 10 years’ imprisonment and a fine.

3 requirements must be proven to establish the offence of cheating and dishonestly inducing delivery of property for the purposes of section 420 read with section 415 of the Penal Code 1871:

• the person affected had been the victim of deception;
• inducement had taken place such that the victim had delivered property to someone else; and
• the accused had dishonest or fraudulent intent to induce the victim to deliver the property.

Obtaining services dishonestly or fraudulently

Section 420A(1) of the Penal Code 1871 criminalises dishonestly or fraudulently obtaining a service for herself/himself or another person on the understanding that the services are rendered for payment that has been or will be made, and intentionally has not made payment, or has intentionally made only partial payment.

Section 420A(2) of the said Code states that a person duly convicted under the above provision faces up to 10 years’ imprisonment, or a fine, or both.

Criminal breach of trust

Often criminal breach of trust arises from the complete appropriation of a Company’s property or assets, with intentional distribution at a much lower price to relatives, or intentional disposal of property that is owned by someone else. Either act may be considered dishonest misappropriation. In such cases, the accused stands to benefit from the “wrongful gain”.

Another way that criminal breach of trust may take place is for the accused to distribute the property in a different way from the capacity in which (or purpose for which) the property had been entrusted to her or him. To this end, there are several provisions in the Penal Code 1871 that set out with some precision the capacity or purpose of the property that has been entrusted. A conventional breach of Director’s duties pursuant to the Companies Act 1967 or negligence may not constitute criminal breach of trust. Conversely, a Director or member might have a right to profits, but if s/he takes the money in a way that breaches the relevant protocols or provisions set out in the Companies Act 1967, then s/he might be guilty of criminal breach of trust.

The provisions on criminal breach of trust (“CBT”) have been set out upwards, with the gravity of the relevant CBT crime commensurate with a progressive increase in the maximum sentence.

Section 405 of the Penal Code 1871 provides that a person who has been entrusted with property and:

• dishonestly misappropriates it, or transforms it for her or his own use;
• dishonestly misuses or distributes the property in breach of any law or legal contract that relates to how the trust is to be discharged; or
• intentionally gets another person to do any of the above,

participates in CBT. Section 405 of the Penal Code 1871 provides several illustrations of conduct that amounts to CBT and conduct that does not.

Section 406 of the Penal Code 1871 provides that a person who is found guilty of committing criminal breach of trust faces a sentence of 7 years’ imprisonment, or fine or both.

Section 407 of the Penal Code 1871 provides that a person entrusted with property for the purpose of transportation for hire (e.g. a carrier) or storage for rent (e.g. a warehouse owner or operator) who is found guilty of committing CBT on such property faces up to 15 years’ imprisonment and a fine.

Section 408 of the Penal Code 1871 provides that a person entrusted with property as an employee who is found guilty of committing CBT on such property faces the same sentence i.e. up to 15 years’ imprisonment and a fine.

Section 409 of the Penal Code 1871 provides that a person entrusted with property in her or his capacity as a public servant, banker, merchant, agent, director, officer, partner, key executive or fiduciary who is found guilty of committing CBT on such property faces up to 20 years’ imprisonment and a fine.

“Cheating at play” within casinos

Section 172A of the Casino Control Act 2006 prohibits a person from cheating at casinos if s/he gets or attempts to get money or an advantage for herself/himself or any other person by:

• Fraudulent trick, sleight of hand or represention;
• Fraudulent scheme or practice;
• Fraudulent use of gaming equipment or other thing;
• Betting in a game after its outcome is known.

A person convicted of “cheating at play” in a casino faces up to 7 years’ imprisonment a fine of up to $150,000 or both. A person who colludes with someone in any of the above activities and is duly convicted faces the same punishment.

Unauthorised access to computer material

Section 3(1) of the Computer Misuse Act 1993 criminalises knowingly getting unauthorised access to computer material, which covers cheating in computer games (e.g. unauthorised access into a game account and stealing costly in-game objects).

A person duly convicted of this provision for the first time faces a fine of up to $5,000 or up to 2 years’ imprisonment. A person who has been duly convicted as a second or repeat offender faces a fine of up to $10,000 or up to 3 years’ imprisonment or both.

If any damage resulted from the offence, then that person duly convicted faces a fine of up to $50,000 or up to 7 years’ imprisonment or both. “Damage” is broadly defined under the Computer Misuse Act, and may include impairment to a computer (or the integrity/availability of data, a program/system, or information) that results in losses of at least $10,000.

Is cheating or aggravated cheating under the Penal Code 1871 an arrestable offence?

If you are arrested for an “arrestable offence”, this means that the police may be able to arrest you without a warrant. An arrest without a warrant can be carried out for relatively “serious crimes” including cheating, aggravated cheating and criminal breach of trust.

I have just been convicted of cheating. Will I have to declare this?

Anyone found guilty of cheating would have a criminal record. However, you might have the chance to show that your criminal record should be considered spent (i.e. treated as a clean record). To be eligible for this, you have to satisfy the following requirements:

• If you received a prison sentence, your time in prison cannot exceed 3 months’ imprisonment;
• If you received a fine, the fine you would have had to pay cannot exceed $2,000;
• You have not been found guilty of any other crime;
• You do not have any past record that has been spent; and
• Assuming that you satisfy all of the above, you have not participated in any crime for at least 5 years in a row (whether from the date of completing your prison sentence or from the date that you received your sentence if it was only a fine).

If all the requirements set out above have been satisfied, your record would be considered as spent, and you may be able to declare that you do not have a criminal record.

I have just been found guilty of cheating. What will my sentence be?

Contrary to popular belief, it is no longer the case that a person found guilty of simple cheating under section 415 of the Penal Code 1871 will always receive a fine. As mentioned above, section 417 of the Penal Code 1871 states that a person found guilty of simple cheating faces imprisonment of up to 3 years, or fine, or both. As held in Idya Nurhazlyn bte Ahmad Khir v PP [2014] 1 SLR 756, generally imprisonment would be in order if “the offence causes a victim to part with property that has more than negligible value”. It appears that of late Courts take a dim view of even simple cheating, as reflected in Public Prosecutor v Lee Chuin Khuen [2019] SGDC 280, particularly if there was deliberate planning involved, which may be considered an aggravating factor.

The default sentencing practice for aggravating cheating under section 420 of the Penal Code 1871 remains an imprisonment term. As mentioned above, a person convicted under this section faces up to 10 years’ imprisonment and a fine.

The Court will weigh up the aggravating circumstances of the offence with any extenuating circumstances, and the mitigating circumstances of the individual offender. It will then then determine the appropriate sentence in your case. For example, if you are considered to be remorseful and also made restitution by fully compensating or reimbursing the victim for the loss(es) suffered, these considerations may be taken into account in determining the appropriate sentence in your case.

Cases involving cheating offences

The considerations that go to the exercise of prosecutorial discretion to decide which charge is to be preferred, and, if convicted, the appropriate sentence vary from case to case. An ordinary person may not find it easy to understand the charge(s) they face and if it is fair in her or his case. It is hence advisable to seek legal counsel should you be charged.

Lawyers may be able to assist you to seek clarification and to pinpoint the pertinent point to the relevant officers and to ensure that you are rightly charged by the relevant officers.

Goldring, Timothy Nicholas v Public Prosecutor

In Goldring, Timothy Nicholas v Public Prosecutor [2015] 4 SLR 742, the appellants, Goldring and Normann, faced 86 charges of conspiracy to cheat by inducing delivery of property pursuant to sections 420 and 109 of the Penal Code (Cap. 224, 2008 Rev. Ed.).

Goldring and Normann were Directors and shareholders of Profitable Plots Pte Ltd (“PPPL”), a company set up in Singapore. PPPL offered openings for investing in land. In 2008, it marketed fuel additives and lubricants (“Boron Products”) that were made by a US company that granted the rights to distribute solely to Profitable Group Limited (“PG Dubai”), which included the appellants as Directors and shareholders. PG Dubai had no employees or actual office location, so Goldring prepared a contract for PPPL’s sale of Boron Products.

The facts were as follows. To supposedly finance the buying of Boron Products, PPPL started an investment scheme that was labelled “Boron Scheme”. Each investment unit cost $1,000 and word was given to investors that they would get 12.5% of the principal amount they invested back within 6 months of the date of investment. When the Boron Scheme was promoted, 2 representations (“Representations”) were made: (i) the finances invested would only be used to fund the buying of Boron Products; and (ii) the said Products had already been “pre-sold” to large companies (“Pre-Sold Representation”). Both Representations were conveyed to investors, mainly through sales agents using amongst others a promotional brochure (“Boron Brochure”).

Broadly, to participate in the Boron Scheme, each investor had to fill up a Product Request Form. Next, the investor would pay money to PPPL and/or transform a current ongoing investment into a Boron Scheme investment. S/he would then get a Transfer of Title Form that was referred to as the agreement. The other party named in the Transfer of Title form was PG Dubai.

The investors affected considered and depended on the Representations before investing in the Boron Scheme.

After 6 months had passed, the investors did not get back their returns, and accordingly lodged complaints against the appellants (as well as Normann’s wife).

The High Court confirmed the decision of the lower court, finding that the appellants were dishonest in that:

• The Boron Scheme was in practice a scam where money distribution scam in which existing investors were paid from money taken from subsequent investors;
• The appellants directly influenced the planning and implementation of the Scheme;
• The appellants knew that the Representations were untrue and still wanted them to be communicated through their sales agents to interested parties;
• The appellants hid useful information from their sales agents and consequently, the investors.

The appellants initially submitted that the second requirement (i.e. inducement) had not been satisfied because the Product Request Form and Transfer of Title Form contained non-reliance provisions. Accordingly, by filling up both Forms each investor accepted that they did not depend on the Representations. The appellants further submitted that that there was nothing to “contract out” of cheating, since this case was not one where the investors claimed to have depended on the Representations such that the appellants had to use non-reliance provisions. Hence, the submission was that no inducement had taken place.

The High Court was not persuaded. It held that the Product Request Form was just an invitation to treat as opposed to a contract. Further, the non-reliance provisions did not prevent liability for the appellants’ fraud from attaching because:

• The non-reliance provisions envisioned bona fide transacting between the parties, and could only safeguard the appellants from honest mistakes, but not fraud;
• Even if the non-reliance provisions protected the appellants from liability for fraud, they were invalid in law due to public policy concerns and breaching the reasonableness test under section 11 of the Unfair Contract Terms Act (Cap. 396, 1994 Rev. Ed.);
• The non-reliance provisions went further than non-reliance, for they precluded liability. Accordingly, they were subject to the limitations of the law. Section 13(1) of the said Unfair Contract Terms Act prohibits a party from precluding liability through contractual provisions or non-contractual notice that limits its own responsibilities, save for where it is reasonable.

On delivery of property, 2 of the victims had invested using the name of their spouses rather than their own names. The appellants further submitted that they could not be found guilty of conspiracy to cheat a person who did not invest in the Boron Scheme in their own names. The High Court was not convinced since cheating for the purposes of sections 415 and 420 of the Penal Code takes place when the suspect dishonestly induces the victim “to deliver any property to any person”. The sections did not mandate that: (i) the property must be delivered in the victim’s own name; or (ii) the victim has to own the relevant property. In this regard, the High Court observed that the main consideration is who delivered the property that was set out in the charge. It was not important to consider who owned the property. Justice would be frustrated if the appellants could argue that no cheating had taken place just because the property had been delivered in another individual’s name. Had the charges identified only the 2 investors’ spouses, they would not have been in order since the spouses did not deliver the property. This observation shows that cheating is relevant to the delivery or holding of property, not to ownership or possession.

Pittis Stavros v Public Prosecutor

In Pittis Stavros v Public Prosecutor [2015] 3 SLR 181; [2015] SGHC 67, the facts were as follows. The appellant was the head engineer of a cargo ship (“the Vessel”) that needed marine fuel oil (“MFO”). The Vessel was chartered by V8 Pool Inc (“the charterers”). A bunker barge was to supply the Vessel with 500mt of MFO.

The Prosecution alleged that the appellant devised and operated a “buy-back” or “short-supply” plan, where the Vessel would only get 300mt of MFO. The other 200mt remained on the bunker barge and would later go back to the MFO supplier, and documents were amended to disguise the shortfall in MFO given. The supplier was paid for providing 500mt of MFO in spite of having provided less, and the supplier would reward the appellant by paying him.

The charge stipulated that the appellant as the charterers’ servant had been entrusted as such with the charterers having dominion over the MFO, and that he had committed CBT under section 408 of the Penal Code (Cap. 224, 2008 Rev. Ed.) by dishonestly misappropriating 200mt of the MFO.

The “buy-back” plan that supposedly had been devised by the appellant needed the co-operation of 2 others – the bunker clerk and the bunker surveyor who participated in the supply transaction. Both testified against the appellant and themselves. The lower court found the appellant guilty and he received an 18-month prison sentence.

On appeal, the appellant made 3 main submissions: (i) he had not participated in any “buy-back” plan and the lower Court was wrong in finding so; (ii) even if he did participate in such a plan, he did not commit any CBT offence as he had not been entrusted with the misappropriated 200mt of MFO at any stage, since the MFO had always stayed on the bunker barge, beyond his purview; (iii) even if he had committed CBT, it was not aggravated CBT under section 408 of the Penal Code since he was not a servant of the charterers, but at most was an employee of the Vessel’s owners.

The High Court only partially allowed the appeal. On the appellant’s first submission, though there were issues in the testimonies of prosecution witnesses, they were not major. The lower court was right in not being preoccupied with minor details but rather to take into account the realm of possibilities. There was more than sufficient reason for the lower court to hold that there was a “buy-back” plan and that the appellant was involved in it.

On the appellant’s second submission, although the appellant did not have actual access to the misappropriated 200mt of MFO that was not yet owned by the charterers, the fact remained that they were entitled to take the MFO, a right that they had transferred to the appellant. Such “delegation” was enough to amount to entrustment by the charterers to the appellant.

On the appellant’s third argument, the elements often found in a master-servant relationship were not present in the relationship between the appellant and the charterers. The appellant’s responsibilities were to the Vessel’s owners, who in turn, owed legal obligations to the charterers. This was the case because the appellant was paid for carrying out his duties by the Vessel’s owners. In addition, when the appellant misbehaved or abused his position, the charterers could only take legal action against the Vessel’s owners rather than the appellant.

Accordingly, the appellant was not the charterers’ servant and hence was convicted of simple CBT, not its aggravated form as set out in section 408 of the Penal Code. Considering the above, the appellant’s 18-month prison sentence was reduced to 14 months.

Public Prosecutor v Lam Leng Hung and others

To repeat, section 409 of the Penal Code 1871 covers CBT by a public servant, banker, merchant, agent, director, officer, partner, key executive or fiduciary. However, section 409(1)(b) of the same expressly refers to “in the way of his trade, profession or business as a banker, a merchant, a factor, a broker, an attorney or an agent”. In Public Prosecutor v Lam Leng Hung and others [2018] 1 SLT 659; [2018] SGCA 7, the Court of Appeal addressed the issue of whether “in the way of his business…as an agent” in section 409(1)(b) of the Penal Code (Cap. 224, 2008 Rev. Ed.) only encompassed professional agents or included Directors or Board Members of corporations, charities and societies.

The facts were as follows. City Harvest Church (“CHC”) was a large church in Singapore that started a project called “Crossover” in 2002. The Crossover included the participation of co-founder of CHC Ms Ho, who was also the spouse of the other accused, Pastor Kong Hee. In participating in the Crossover, both Ms Ho and Pastor Kong were involved in recording non-religious music albums as a way to spread the faith. CHC was also looking for property that would be appropriate for its activities and hence sought substantial donations that were kept separately in a building fund (“BF”). Since several allegations involving abuse of church funds were made, the accused persons funded the Crossover through a separate company, Xtron Productions Pte Ltd (“Xtron”), which was fully under their control. From 2003, Xtron funded Ms Ho’s music career relying on different sources such as donations to CHC. The terms of reference for the Crossover were extended in 2006, which called for more financing. This was achieved by taking BF finances to buy Xtron bonds. Additional measures were taken to this end to fund the Crossover. In 2009, after CHC’s auditors took issue about the buying of bonds, the accused persons claimed money for the bonds through several “round-tripping transactions” that were not real transactions but rather were used to give the false appearance that Xtron and other bonds had been redeemed by legitimate means. In 2010, the Commercial Affairs Department started probing the transactions.

The accused persons were charged with conspiracy to commit aggravated CBT as an agent pursuant to section 409 of the Penal Code (Cap. 224, 2008 Rev. Ed.) for dishonestly using BF to buy Xtron and other bonds and the later participating in “round-tripping transactions” to claim money for those bonds, amongst other charges. The CBT charges were based on the understanding that 3 of the accused were entrusted with the finances as members of the CHC Management Board, and hence were its agents. The accused were convicted of the charges for the purposes of the trial, including the charges pursuant to section 409 of the then Penal Code. The accused appealed to the High Court. A specially-convened High Court consisting of 3 Judges held that the term “in the way of his business as…an agent” in section 409 of the Penal Code specifically referred to a professional agent, and did not include Directors of corporations or Governing Board members or key officers of charities, or officers of societies. The majority found that the charges against the accused under section 409 of the Penal Code were not established because they were not professional agents, and reduced the CBT charges to simple CBT pursuant to section 406 of the Penal Code. Their sentences were accordingly reduced.

The Court of Appeal upheld the High Court majority’s understanding of “in the way of his business as… an agent” in section 409 and maintained the sentences already meted out to the accused.

The clearest rationale for not using “in the way of his business” for public servants in section 409 of the Penal Code was that “business” denoted commercial tasks. At least the drafters of the provision appeared to distinguish between “in the capacity of” for public servants and “in the way of his business” for agents and the like. The Court of Appeal distinguished an Indian Supreme Court case.

The Court of Appeal observed that “in the way of his business” did not come up anywhere else in the Penal Code, while “in his capacity of” or related terms came up in different portions of the Penal Code. This suggested that “in the way of his business” had its own unique meaning.

The term “a banker, a merchant, a factor, a broker, an attorney” in section 409 of the Penal Code was made in relation to specific professions that were taken up to make a living. “In the way of his business” covered individuals considering the nature of their occupations in the list. The outcome was that the term “in the way of his business as a banker, a merchant, a factor, a broker, an attorney or an agent” would not include individuals who did not carry on these professions at all, or individuals who carried on in these professions but were entrusted with property in circumstances that were not within the scope of their profession.

The ordinary meaning of the term was that persons who fell within the purview of “in the way of his business…” were carrying out commercial tasks in accordance with their profession.

The majority’s understanding of the term “an agent” was appropriate and could not be disturbed. The other terms “a banker, a factor, a broker, an attorney” were specific professions that involved undertaking commercial tasks as part of their respective livelihoods. In considering “an agent”, this must denote a professional agent. The broad structure of the Penal Code’s CBT sections supported this understanding, referring to particular trades and professions rather than lending itself to a generic legal interpretation.

Parliament’s intention on “as a banker, a merchant, a factor, a broker, an attorney or an agent” was to impose higher penalties on CBT offences done by individuals who participated in “trusted trades or professions”, when they were entrusted with property while discharging their responsibilities. The profession of agency was one of the “trusted trades or professions” that was listed in section 409 of the then Penal Code.

Past authorities confirmed this understanding of “agent” for the purposes of section 409 of the Penal Code i.e. professional agents who were paid for rendering their services.

The injustice claimed by the Prosecution might be aggravated if the Prosecution’s understanding of the said provision was accepted. Such an interpretation would be “over-inclusive” in that it would cover legal agents including not just Directors and officers of body corporates but executives, which was unlikely to have been Parliament’s intent. Conversely, if section 409 of the then Penal Code was read as broadly as suggested, it would be “under-inclusive” in that many important individuals who carry on in professions that have trusted responsibilities (and in breaching them call for severe punishment), including trustees, would not fall within this section’s purview.

The Court of Appeal held that it was best to leave it to Parliament to fill any perceived gaps in the legislation. Besides, the accused were duly convicted and would be serving lengthy prison terms meted out by the High Court.

Hence, Directors of companies, Governing Board members or key officers of a charity, or officers of a society did not come under the purview of “agents” for the purposes of section 409(1)(b) of the Penal Code, given that they were not “in the business of agency”.

Leck Kim Koon v Public Prosecutor

In Leck Kim Koon v Public Prosecutor [2021] SGHC 236 the defendant was found guilty of 6 charges of aggravated cheating pursuant to section 420 of the Penal Code (Cap. 224, 2008 Rev. Ed.), having used replica copies of an identical transport document to get disbursements from 6 banks. He received a total sentence of 36 months’ imprisonment from the lower court. He filed an appeal against conviction and sentence, which the High Court dismissed.

The defendant was Director and majority shareholder of Intraluck Pte Ltd (“Intraluck”), together with Madam Neo Poh Choo (“Mdm Neo”). Intraluck specialised in the import and export of aluminium and the like.

Intraluck had trade funding credit arrangements with several banks, involving money under a previous arrangement would be disbursed to suppliers when Intraluck submitted an application with supporting documentation. On 9 September 2015, Intraluck applied to United Overseas Bank Ltd (“UOB”) for invoice funding for over US$60,000. The supporting documentation consisted of an Orient Overseas Container Line Limited Notice stipulating that Intraluck would get a shipment of aluminum goods from Norinco New Energy Co. Ltd under a certain bill of lading. The funds were subsequently disbursed by UOB.

From 10 to 15 September 2015 Intraluck applied 6 more times for invoice funding to banks aside from UOB using the same bill of lading. The application forms were signed by the defendant and Mdm Neo. The money was disbursed to the suppliers. Intraluck had made full restitution and it was not in dispute that the banks did not incur losses.

The High Court found that civil liability did not exclude criminal liability. On deception and inducement, the High Court held that if there was no specific person who had been so deceived, it would be enough for the Prosecution to show that the company’s processed were used to induce it to behave in a way that it would not have done if the representation had not taken place. Here it had to be demonstrated that the banks would not have disbursed the funds if the transport documents had not been provided in support of Intraluck’s application(s).

The transport documents made it appear that the funds to be disbursed to suppliers were from bona fide transactions that did not in fact take place. Hence the requirement of deception had been met. In addition, the High Court agreed with the lower court’s finding that the banks were induced by the transport documents to disburse the funds to the suppliers. It was enough that the deception “played some part” in the inducement.

On dishonest intention, the High Court understood that the defendant was aware that the banks would call for copies of the transport documents which allegedly represented bona fide transactions for the disbursement of funds. To this end the defendant sent such copies misleading the banks. The defendant was the sole individual responsible for the “sensitive business” of transhipment. As Intraluck’s Managing Director, the defendant did not take issue with the understanding that he made important decisions at Intraluck. The High Court was satisfied that his dishonest intent that was connected to the actus reus of cheating had been established on the facts. Just because the defendant was not the individual who had sent the applications to the banks, this did not exclude him from guilt. The defendant was aware of what he had done by instructing the applications to be sent to the banks, and also executed the supporting documentation. Accordingly, the High Court dismissed the appeal against conviction.

The High Court noted that the lower court had already reduced the defendant’s prison term by 6 months considering that his poor health could disproportionately affect him. Accordingly, the High Court was of the view that the total 36-month imprisonment term was not manifestly excessive. Hence, the appeal against sentence was dismissed.

DISCLAIMER

As mentioned, the information above is not intended to be legal advice, but is meant to give you some understanding of some of the white collar crimes in Singapore generally. Hence, you should not see the information contained here as a comprehensive guide. Trident Law Corporation excludes liability for loss suffered by any person resulting in any way from the use of, or reliance on, this information.

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