In Public Prosecutor v Syed Mostafa Romel  3 SLR 1166, the Singapore High Court made clear that private sector bribery was as abhorrent as public sector bribery, tripling the jail term (from two to six months) of a marine surveyor convicted on corruption charges relating to the receipt of bribes to omit safety breaches in his reports. The case is significant for the guidance it gives on sentencing of corruption charges. More importantly, it dispels any perceived distinction between corruption in the private and public sectors.
A Singapore shipyard providing shipbuilding, conversion and repair services worldwide was embroiled in a corruption scandal in which seven senior executives, including three presidents, a senior vice president, a chief operating officer (COO) and two group financial controllers, were implicated in conspiracies to bribe agents of customers in return for contracts between 2000 and 2011. A total of at least S$24.9 million in bribes were paid out during the period.
An integral part of this scheme involved disguising the bribes as bogus entertainment expenses that were paid out from petty cash vouchers as approved by the accused persons. It should be noted that none of these executives carried out the actual bribe payments. Rather, they approved the fraudulent petty cash vouchers, which they knew were not genuine entertainment expense claims that were presented to them.
Between December 2014 and June 2015, the senior executives were charged with corruption for conspiring to pay bribes, and for conspiring to defraud the company through the falsification of accounts and the making of petty cash claims for bogus entertainment expenses.
The prosecution of the case is presently ongoing. To date, the cases against four senior executives have concluded. The former senior vice president and former COO/deputy president were both sentenced to imprisonment and a fine. The former group financial controller, who was the first to plead guilty and had committed to testifying against his co-conspirators, was handed a S$210,000 fine for his role in the conspiracy. The ex-president of the company, who was not alleged to be privy to the conspiracy, was also prosecuted. He was prosecuted under section 157 of the Companies Act for failing to use reasonable diligence to perform his duties and was sentenced to 14 days’ jail under a detention order. In this case, the prosecutor alleged that he had ignored information that pointed to criminal wrongdoing in the company.
The ‘IKEA case’
In Public Prosecutor v Leng Kah Poh  SGCA 51 (the IKEA case), the Court of Appeal clarified that inducement by a third party was not necessary to establish a corruption charge under the PCA. In doing so, the Court of Appeal overturned an acquittal by the High Court of Leng Kah Poh, the former IKEA food and beverage manager in Singapore, who had originally been sentenced to 98 weeks of jail for 80 corruption charges. Leng had reportedly received a S$2.4 million kickback for giving preference to a particular product supplier. The High Court had overruled the conviction of the trial court and acquitted Leng, holding that the conduct did not amount to corruption because he had not been induced by a third party to carry out the corrupt acts. The High Court held that an action for corruption would only succeed when there are at least three parties:
- a principal incurring loss;
- an agent evincing corrupt intent; and
- a third party inducing the agent to act dishonestly or unfaithfully.
The High Court held that in this case no third party existed and therefore the conduct alleged was not considered to amount to corruption under the PCA. However, in overturning the decision of the High Court, the Court of Appeal noted that if inducement by a third party were necessary, it would lead to absurd outcomes and undermine the entire object of the PCA.
The ‘Seagate case’
In Teo Chu Ha v Public Prosecutor  SGCA 45, a former director at Seagate Technology International (Seagate) received shares in a trucking company and subsequently assisted that company to secure contracts to provide trucking services for Seagate. The High Court held that the conduct did not amount to corruption, as the rewards were not given for the ‘purpose’ or ‘reason’ of inducement because they were not causally related to the assistance Teo had rendered. Furthermore, Teo had paid consideration for the shares. The Court of Appeal overruled the High Court decision, finding that a charge of corruption could still be made out when consideration was paid and it was not necessary to prove that consideration was inadequate or that the transaction was a sham. The Court of Appeal noted in particular that the purpose of the PCA would be undermined if it were interpreted to have such a narrow scope that could be circumvented by sophisticated schemes such as the one in the present case.
The ‘City Harvest case’
In a high-profile case involving six leaders of a mega-church in Singapore, City Harvest Church, church founder Kong Hee and five leaders were found guilty by the Singapore state courts of conspiring to misuse millions of dollars of church funds to further the music career of singer Sun Ho, who is also Kong’s wife. The six had misused some S$50 million in church building funds earmarked for building-related expenses or investments.
Five of the six, including Kong, were found guilty of misusing S$24 million towards funding Ho’s music career by funnelling church funds into sham investments in a company controlled by Kong. Four of the six were also found guilty of misappropriating a further S$26 million of church funds by falsifying accounts to cover up the first sum and defrauding the church’s auditors. They were sentenced to jail terms ranging from 21 months to eight years. Both the prosecution and the respective accused persons have appealed against the judgment. The appeals were heard in September 2016 by a three-judge panel sitting in the High Court.
In April 2017, two out of three judges on the panel held that company directors or the equivalent such as the six accused persons, were not ‘agents’ within the meaning of section 409 of the Penal Code, and substituted their convictions with the lesser charge of criminal breach of trust. Consequently, the jail terms of the six accused persons were significantly reduced to jail terms of between seven months and three-and-a-half years.
Section 409 of the Penal Code is an aggravated form of criminal breach of trust, where stiffer sentences are meted out to persons who misappropriate property that have been entrusted to them in the way of their ‘business as a banker, a merchant, a factor, a broker, an attorney or an agent’. The majority of the three-judge panel held that section 409 of the Penal Code only applies to ‘professional’ agents, meaning those who offer their services as agents or make their living as agents, and that directors, such as the accused persons, cannot be considered ‘agents’. This ruling is a significant break from a legal position that has prevailed in Singapore for the past 40 years and may have an impact on the interpretation of other similar provisions in the Penal Code and the PCA.
Shortly after the ruling, the prosecution filed a Criminal Reference with the Court of Appeal to clarify the point of law decided by the High Court. The hearing was heard on 1 August 2017. On 1 February 2018, a five-judge panel of the Court of Appeal rejected the prosecution’s application to reinstate the original convictions of the six individuals.
Clarence Chang Peng Hong
In March 2017, a former executive of an oil major, Clarence Chang Peng Hong, was charged with obtaining almost US$4 million in bribes from the executive director of an oil trading firm, to advance the business interest of the firm with the oil major. The bribes were allegedly obtained on 19 occasions between July 2006 and March 2010. Chang also faced charges for corruptly converting property amounting to S$3.97 million by using direct or indirect benefits of the corrupt conduct to acquire properties in Singapore.
In November 2017, a ship fuelling company and one of its directors were charged with offences involving the concealing of benefits from alleged criminal conduct. The company, that director and two others (another director and a bunker manager) were also charged with cheating. The offences related to an alleged scheme involving the company invoicing its customers for more marine fuel than that delivered. It is notable that a company has been charged for offences that involve concealing benefits accrued from alleged criminal conduct.
In December 2017, three former and current employees of SMRT Trains, a rail operator in Singapore, were charged with cheating under the Penal Code for concealing their interests in two companies, which were awarded contracts worth almost S$10 million by SMRT Trains over a five-year period. The cases against the three accused persons are still pending.
Even though the conduct in question is more aligned to conflict of interest cases that have been prosecuted as corruption cases (see the IKEA case and Seagate case above), the SMRT case demonstrates that the authorities in Singapore may choose to prosecute individuals for cheating instead of corruption without having to prove that gratification had been offered, given or accepted.
‘Ang Mo Kio Town Council General Manager case’
On 25 September 2018, the corruption trial of former general manager of Ang Mo Kio Town Council (AMKTC), Wong Chee Meng, commenced. Wong is alleged to have accepted bribes amounting to over S$107,000 from a director of two building and construction companies in order to advance the business interests of those companies. The companies had won tenders and contracts from AMKTC amounting to millions of dollars. More than half of the bribes paid were in the form of entertainment expenses incurred by Wong and the director at various KTV lounges and massage parlours that they frequented at night. Other details that emerged over the course of the trial include arrangements orchestrated by the director for Wong’s benefit, such as alleged payments made to Wong’s mistress in China, and employment for Wong’s daughter-in-law at a company owned by a friend of the director (with her salary being paid for by the director). The trial is still ongoing.
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