On 5 December 2022, the former Chief Financial Officer of Mainboard-listed Trek 2000 International Limited (“Trek 2000”), Gurcharan Singh (“Singh”), was convicted on the following charges:
- one charge under Section 204 read with Section 331 of the Securities and Futures Act for failing to make immediate announcements of interested person transactions;
- one charge under Section 477A of the Penal Code (“PC”) for conspiring with two others to falsify Trek 2000’s financial statements;
- one charge under Section 417 read with Section 116 of the PC for engaging in a conspiracy with three others to cheat Trek 2000’s auditors;
- three charges under Section 465 read with Section 109 of the PC for instigating an employee to forge documents; and
- two charges under Section 477A read with Section 109 of the PC for abetting another to falsify documents.
Interested person transactions
Investigations by the Commercial Affairs Department revealed that in 2011, the Trek 2000 Group (“the Group”) entered into seven transactions with T-Data Systems (S) Pte Ltd (“T-Data”), with a total value of approximately US$2.79 million. At the time of the transactions, the wife of the then-Executive Director of Trek 2000, Poo Teng Pin (“Poo”), was the sole shareholder of T-Data.
Under the SGX-ST Mainboard Rules, T-Data was an interested person in relation to Trek 2000 and all seven transactions were required to be immediately announced. However, Trek 2000 recklessly failed to make the necessary disclosures, and this failure was attributable to, among other things, the neglect of Singh. Singh knew that T-Data was an interested person but did not take any steps to get Trek 2000 to make the necessary disclosures.
Fictitious Unimicron Sale
Between November and December 2015, Singh conspired with the former Chief Executive Officer of Trek 2000, Henn Tan ("Tan"), and Poo to falsify Trek 2000’s financial statements for the financial year (“FY”) ended 31 December 2015, by recording a fictitious sale to Unimicron Technology Corp (“Unimicron”) worth US$3.2 million.
In February 2016, Trek 2000’s auditors, Ernst & Young LLP (“EY”), queried the fictitious sale to Unimicron and requested for supporting documents. Singh then conspired with Tan, Poo and another employee who is also facing charges, to deceive EY into believing that the sale to Unimicron was genuine. Thereafter, Singh instigated an employee to forge two bank advices to support the fictitious Unimicron sale, and together with his co-conspirators, created a document setting out a false chronology of events relating to the fictitious Unimicron sale. EY was ultimately not deceived and made a report to the Accounting and Corporate Regulatory Authority (ACRA).
Fictitious Licensing Revenue
Sometime in or before 2011, Tan instructed Singh to record fictitious licensing income in the Group’s accounts, purportedly payable by Toshiba Electronics Asia (Singapore) Pte Ltd (“TEA”). This was done to boost the Group’s reputation in the industry. TEA was Trek 2000’s supplier for Integrated Circuit (“IC”) memory chips.
Sometime between 2012 and 2013, Singh entered into a conspiracy with Poo to falsify documents to record the said fictitious licensing income. Pursuant to this conspiracy, between February and October 2015, Singh instructed Poo to instruct an employee to falsify seven invoices to record a total of US$1.74 million in fictitious licensing income supposedly earned from TEA.
In addition, since sometime from June 2015, in order to inflate the gross profits earned by the Group, the Group: (a) continued to record fictitious licensing income earned from TEA; and (b) forged 11 TEA invoices to reduce the price charged by TEA for IC memory chips. To ensure that the Group’s accounts appeared balanced, the Group then recorded fictitious operating expenses to offset the false increase in gross profits. To record these fictitious operating expenses, Singh instructed the forgery of 15 TEA invoices and two TEA credit notes.
Singh pleaded guilty to eight charges and was sentenced to 11 months’ imprisonment and a fine of S$20,000. Nine other similar charges were taken into consideration for the purpose of sentencing.
Court proceedings against the employee referred to in paragraph 5 are ongoing.
SINGAPORE POLICE FORCE
05 December 2022 @ 6:15 PM