Ex-company director misappropriated S$7 million under guise of property development in China
SINGAPORE: An executive chairman and managing director of an investment holding firm managed to misappropriate S$7 million (US$5.4 million) from his company under the guise of property development projects in China.
Lee Boon Teck, 58, used the sum stolen from Catalist-listed KLW Holdings to buy himself shares in the company. The investment holding firm is now known as HS Optimus Holdings.
He pleaded guilty on Tuesday (May 20) to one count each of criminal breach of trust and falsifying accounts. Ten similar charges will be taken into consideration.
Lee admitted to carrying out the offences in 2014 with his co-accused Chan Ewe Teik, now known as Michael ET Chan.
At the time, Lee was also director of Barang Barang and Ambertree, which were companies in the KLW group. Chan was the sole director and shareholder of Straitsworld Advisory, a consultancy firm.
The duo met in 2010 or 2011, when Chan offered Lee his consultancy services after reading an article about Barang Barang facing business problems.
Chan started introducing business opportunities to KLW through Lee. In 2013, Chan floated two projects in China involving the acquisition of a state-owned hotel in Zhangye, Gansu and the development of the surrounding land.
The plan was for Straitsworld to acquire the assets for the projects with the help of a third company, White Group, then sell them to KLW, which would develop the hotel and surrounding land.
The three companies entered into an agreement with the Zhangye government in April 2014.
Lee did not inform KLW's board of directors about the projects, despite knowing that any corporate decisions he made for the group required the board's formal and express approval.
He also arranged for Ambertree to pay Straitsworld S$7 million in commitment fees for the Zhangye projects in May 2014.
A second payment of S$7 million in supposed commitment fees from KLW to Straitsworld was made in June 2014. This was the sum that Lee misappropriated.
Before this second transfer, Lee had told Chan that he needed S$7.8 million to buy KLW shares. Chan agreed to loan him the money, but was unable to obtain the full sum as the share purchase deadline neared.
The duo therefore agreed to fund Lee's share purchase by using S$7 million in commitment fees from KLW to Straitsworld first, as a loan. Lee proceeded to authorise this second payment.
By August or September 2014, discussions over the Zhangye projects had broken down.
In May 2015, KLW's group financial controller informed the independent directors that the commitment fees paid to Straitsworld were due to be refunded to KLW.
Lee met up with Chan on several occasions to recover the commitment fees that totalled S$14 million, but Chan informed him that Straitsworld did not have sufficient funds.
They agreed for Lee to repay S$7 million first on Chan's behalf, and Lee made the payment to KLW.
Lee and Chan then agreed to redirect the remaining S$7 million owed to another potential property development project in which Straitsworld was involved.
This redirection was approved by KLW's board. Chan also provided a guarantee that he would be personally liable for the repayment of the remaining S$7 million if the project fell through.
When the project failed to materialise, KLW took legal action against Chan. He was only able to repay S$5.75 million of the S$7 million, and was made a bankrupt in 2018.
The remaining sum of S$1.25 million has not been repaid.
Lee also admitted to directing KLW's group financial controller and a finance and human resource manager to make false entries in the company's financial statements.
This was to cover up the commitment fees paid to Straitsworld, a S$2.2 million commitment fee Lee made KLW pay for another potential property development project in Bali, and a S$1.95 million "personal loan" he took from KLW.
These transactions, totalling S$18.15 million, were made without the knowledge or consent of KLW's board of directors, and Lee wanted to conceal them to prevent inquiries.
Lee had them concealed by reflecting the S$18.15 million under KLW's cash and bank balances, as if the sum was never disbursed from the group's bank accounts.
In reality, they should have been reflected as receivables that ran a risk of not being paid.
Lee will return for sentencing on Jun 24, while Chan's case is still pending before the courts.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
30 minutes ago
- Business Times
Scott Bessent emerging as a contender to succeed Fed's Powell
[NEW YORK] A growing chorus of advisers inside and outside the Trump administration are pushing another name to serve as the next chair of the Federal Reserve: Treasury Secretary Scott Bessent. President Donald Trump said on Friday (Jun 6) that he would name a successor 'very soon' to replace Jerome Powell, whose term as Fed chair ends in May 2026. The small list of candidates under consideration includes Kevin Warsh, a former Fed official whom Trump interviewed for the Treasury secretary role in November, according to people familiar with the matter. But Bessent – who is leading Trump's effort to kick-start the US economy with sweeping changes to trade, taxes and regulation – is also now one of the contenders for the job, said the people, who requested anonymity to discuss private conversations. Formal interviews for the position have not begun, two of the people said. 'I have the best job in Washington,' Bessent said in response to a request for comment. 'The president will decide who's best for the economy and the American people.' A senior administration official, who spoke on the condition of anonymity, disputed the reporting without providing further specifics. As Treasury chief, Bessent would traditionally play a key role in the search and interview process for the next Fed chair. It's unclear if he would recuse himself as Trump begins to make his decision. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Given the amount of trust and confidence that the global financial community has in Scott Bessent, he's an obvious candidate,' said Tim Adams, president and CEO of the Institute of International Finance (IIF). 'He's a dark horse candidate,' Adams said, adding that Warsh – who served as a governor on the Fed board from 2006 to 2011 – would also be a good choice. Asked specifically about Warsh on Friday, Trump said: 'He's very highly thought of.' Bessent has been at the forefront of negotiations on a US-China trade deal, arguably the most important of the pacts the president is seeking to forge as part of his effort to reshape the global trade landscape. 'Scott Bessent proved he could implement President Trump's agenda during an incredibly turbulent first six months,' said Steve Bannon, former chief White House strategist and outside adviser to the president. 'He's not just the star of the cabinet, but a safe pair of hands for global capital markets.' The president, who first nominated Powell to the job in 2017, has regularly complained that the Fed chief has been too reluctant to cut borrowing costs. Trump pushed Powell to lower interest rates in a White House meeting last month. Powell and Fed officials have held interest rates steady in 2025, arguing a patient approach to policy is appropriate amid economic uncertainty caused by Trump's expanded and evolving use of tariffs. Fed policymakers have said they expect the announced tariffs to weigh on economic growth and boost inflation. Whoever the Senate confirms for the post will have to prove to the world that the Fed's independence from political meddling remains intact. Trump has said many times that Powell is making a mistake by not lowering rates, and has previously said that he should have a say on rate decisions, raising questions over whether markets would see the next pick as beholden to him. Bessent or Warsh 'would be given the benefit of the doubt from the financial community' that they would preserve the independence of the Fed's rate-setting authority, IIF's Adams said. Economist and Trump ally Arthur Laffer said Bessent 'is wonderful, but he already has a job. And his speciality is not monetary policy'. 'As I told the president, I think Kevin Warsh is just perfect for the job,' he said. Other candidates whose names have previously been floated for Fed chair include Kevin Hassett, the White House's National Economic Council director, Christopher Waller, a Fed governor, and former World Bank president David Malpass. BLOOMBERG
CNA
32 minutes ago
- CNA
CNA938 Rewind - Servicing, parts and maintenance; Do we have the ecosystem for EV adoption?
CNA938 Rewind Play Is Singapore's infrastructure equipped enough to take its embrace of electric vehicle (EV) technology even further? Lance Alexander and Daniel Martin learn more from Terence Siew, President and Co-Founder of the Electric Vehicle Association of Singapore.
CNA
an hour ago
- CNA
China says ready to 'strengthen cooperation' with US in future talks: Report
BEIJING: China's vice premier and top trade negotiator stressed the need for Beijing and Washington to strengthen cooperation and reduce "misunderstandings" in future dialogue, according to state media on Wednesday (Jun 11) following trade talks in London. After months of global turmoil as the world's two largest economies squared off over reciprocal tariffs, the two sides "made new progress in resolving each other's economic and trade concerns", state broadcaster CCTV reported. The London negotiations follow talks in Geneva last month, which saw a temporary agreement to lower tariffs. "As a next step, the two sides should ... continuously enhance consensus, reduce misunderstandings and strengthen cooperation," Vice Premier He Lifeng said, according to state broadcaster CCTV. Top officials from the United States and China said on Tuesday that they had agreed on a "framework" to move forward on trade, following two days of high-level talks in the British capital to resolve tensions. US Commerce Secretary Howard Lutnick expressed optimism after a full day of negotiations that concerns surrounding rare earth minerals and magnets "will be resolved" eventually, as the deal is implemented. But this framework will first need to be approved by leaders in Washington and Beijing, officials said, at the end of meetings at London's historic Lancaster House. In its readout of the talks released on Wednesday, Beijing's state media said the Chinese side "reiterated that the two sides should meet each other halfway, keep promises and fulfil actions". "The two sides had candid and in-depth dialogue (and) exchanged in-depth views on economic and trade issues of mutual concern," it said. They "reached a consensus in principle on the framework of measures to implement the important consensus reached by the two heads of state in their Jun 5 phone call", the broadcaster added, referring to recent talks between leaders Xi Jinping and Donald Trump. This time, China's exports of rare earth minerals, used in a range of things including smartphones, electric vehicle batteries and green technology, were a key issue on the agenda, with Washington accusing Beijing of dragging its feet on approving exports.
