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Resident Director Of Shell Company Convicted

On 24 August 2020, Beh Chuen Leng, was convicted in court for an offence under Section 157(1) of the Companies Act, Chapter 50, for failing to exercise reasonable diligence in the discharge of his duties as a director. Two other charges under the Companies Act were taken into consideration for sentencing. He was sentenced to the maximum fine of SGD 5,000. He was also disqualified from being a director for one year.

Beh served as the resident director of a Singapore company that he had incorporated on behalf of a foreigner. Besides assisting with the incorporation of the company and the opening of its bank account, Beh ceded all control of the company, including its bank account, to the foreigner and failed to exercise any supervision over its affairs.

On 26 January 2015, the company received a sum of USD 114,852.52 from a victim who had been deceived into transferring funds to the company’s bank account. The said funds were subsequently transferred out of Singapore within a short period of time. Investigations revealed that the company had no legitimate business operations in Singapore and was in fact, a shell company that was set up as a conduit to launder criminal proceeds through Singapore.

The offence of Section 157(1) punishable under Section 157(3)(b) of the Companies Act carries a fine of up to SGD 5,000 or a jail term of up to 12 months. The Police takes a serious view of the offence and will not relent in taking offenders to task. Individuals should not be a director of a company when they have limited oversight or control, as the company may be used for illegal purposes such as the laundering of criminal proceeds.

24 August 2020 @ 4:00 PM
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