On 23 February 2024, a 37 year-old Malaysian, Tan Hock Keat (Tan) was sentenced to two counts of an offence under Section 44(1)(a) of the Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, (“CDSA”) and three counts of abetting others to fail to exercise reasonable diligence in the discharge of their duties as a director under Section 157(1) of the Companies Act, read with Section 109 of the Penal Code. He was sentenced to 38 months and 6 weeks’ imprisonment.
Tan was a director of DM Advisory Pte Ltd, which provides corporate secretarial services. Between March 2017 and May 2017, Tan assisted an individual purportedly known as George Clarke (Clarke) to incorporate several companies in Singapore, including Temco Industrial Pte Ltd and Integrated Invest Pte Ltd. He also assisted to set up corporate bank accounts for these companies. Thereafter, control over the accounts were handed over to Clarke. These corporate bank accounts were subsequently used to receive benefits from criminal conduct amounting to approximately USD 734,389.80.
Investigations also revealed that, amongst others, Tan had engaged individuals as directors of three of his clients’ companies, namely Modelana Trading Pte Ltd, Compiko Pte Ltd and Qian Ye Pte Ltd even though he knew that they would not exercise reasonable diligence in the discharge of their duties as directors. As a consequence of the arrangement, the companies’ bank accounts received benefits from criminal conduct amounting to approximately USD 3,350,000.
If convicted under the former Section 44(1)(a) of the CDSA (now Section 51(1)(a)), a person who enters into or is otherwise concerned in an arrangement, knowing or having reasonable grounds to believe that, by the arrangement, the retention or control by or on behalf of that other person’s benefits of criminal conduct is facilitated, and knowing or having reasonable grounds to believe that that other person is a person who engages in or has engaged in criminal conduct or has benefited from criminal conduct shall be liable to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both.
If convicted under Section 157(1) of the Companies Act, a director who fails to act honestly and use reasonable diligence in the discharge of the duties of his office shall be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months.
If convicted under Section 109 of the Penal Code, whoever abets any offence shall be punished with the punishment provided for the offence.
The Police takes a serious view of these offences and will not relent in taking tough enforcement action against offenders. Individuals should not be a director of a company when they have limited or no control or oversight of the company, as the company may be used to facilitate illicit activities such as the laundering of criminal proceeds. Company directors who fail to exercise reasonable diligence in the discharge of their duties as directors run the risk of allowing their companies to facilitate the retention of benefits derived from criminal conduct.
SINGAPORE POLICE FORCE
23 February 2024 @ 2:00 PM