On 19 October 2023, two directors, aged 33 and 35, were charged in court for offences under Companies Act.
A 35-year-old man was charged with three counts under Section 157(1) punishable under Section 157(3)(b) of the companies act for failing to use reasonable diligence in the discharge of his duties as a director of three Singapore-registered companies. The 33-year-old man, who is a director of a corporate services provider, was also charged with the following:
- Three counts for abetting the 35-year-old man to fail to use reasonable diligence in the discharge of his director’s duties; and
- One count for similarly abetting another 28-year-old man to fail to use reasonable diligence in the discharge of his director’s duties.
Investigations revealed that the 33-year-old man had provided directorship services to foreign clients who wished to incorporate companies in Singapore. It is a statutory requirement that a Singapore-registered company must have at least one director who is ordinarily resident in Singapore (herein referred to as “local director”). The 33-year-old man had allegedly approached the 35-year-old man and a 28-year-old man to act as local directors of four companies that were incorporated at the request of his clients. Although the 35-year-old man and 28-year-old man had agreed to be local directors, they allegedly did not take steps to find out the identity of the clients and ceded control over the company's bank accounts to these clients. Between May 2020 and July 2020, the Singapore bank accounts of these four companies received criminal proceeds amounting to more than USD$1.08m from overseas victims of phone impersonation scams and an investment scam.
The offence of failing to use reasonable diligence in the discharge of duties as a director under Section 157(1) punishable under Section 157(3)(b) of the Companies Act, carries a an imprisonment term of up to 12 months or a fine of up to $5,000. A person who is convicted of abetting the offence is liable for the same punishment.
The Police would like to advise all individuals who intend to be appointed as a director in companies, or who are currently serving as directors, to familiarise themselves with the duties required of them. Should a director exercise inadequate supervision over the company’s affairs, there is a risk that the company may be used to facilitate illicit activities, such as the laundering of criminal proceeds.
SINGAPORE POLICE FORCE
19 October 2023 @ 12:06 PM