A 41-year-old man, who is the managing director of a corporate service provider (“CSP”), was charged in court on 4 November 2020 for an offence under Section 157(1) of the Companies Act read with Section 109 of the Penal Code, for abetting by intentionally aiding a 36-year-old woman, who is an employee of the CSP, in failing to exercise reasonable diligence in the discharge of her duties as a director of a Singapore registered company (“Company X”). The woman was also charged in court for an offence under Section 157(1) of the Companies Act.
The woman had entered into an arrangement with the CSP to serve as the local resident director of Company X, which was incorporated at the request of a foreign national client of the CSP. As a consequence of the arrangement, the woman had ceded all control of Company X, including its bank accounts, to the foreign national and failed to exercise any supervision over its financial affairs.
Between 2015 and 2018, Company X’s bank accounts received over $5 million of criminal proceeds, which had been seized by the Commercial Affairs Department. Investigations revealed that Company X had no legitimate business operations in Singapore and was in fact set up as a conduit to launder criminal proceeds through Singapore.
If convicted, the man and woman shall be punished with a fine of up to $5,000 or a jail term of up to 12 months under Section 157(3)(b) of the Companies Act. The Police take 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 or no oversight or control, as the company may be used for illegal purposes such as the laundering of criminal proceeds.
Source: Singapore Police Force