Latest news with #liquidators
CNA
29-07-2025
- Business
- CNA
S$1.5b nickel fraud: Court allows liquidators to claw back bonuses, commissions from Ponzi scheme's ex-staff
SINGAPORE: The High Court on Tuesday (Jul 29) allowed liquidators to claw back bonuses, commissions and other payments from former employees of the Envy group of companies that allegedly perpetuated a S$1.5 billion (US$1.16 billion) Ponzi scheme involving bogus nickel trading. The court found two directors liable for about S$842 million, an administrative executive liable for S$1.9 million, and six employees liable for about S$42 million in total. The judge said the billion-dollar fraud was perpetuated on "all and sundry, from the common man on the street to sophisticated investors who were seduced by the apparent attractive returns". The alleged mastermind of the scheme, Ng Yu Zhi, founded the Envy group of companies and is separately on trial for dozens of criminal charges including forgery, cheating and criminal breach of trust. However, he declared bankruptcy after a partial judgment for about S$416.4 million and US$17.6 million was obtained against him. The three Envy companies - Envy Asset Management, Envy Management Holdings and Envy Global Trading - and those firms' three liquidators then turned to Ng's former employees in a bid to claw back money. Judicial Commissioner Mohamed Faizal said the purported nickel trading was non-existent. The Envy companies never transacted with an Australian company known as Poseidon Nickel to purchase London Metal Exchange Grade Metal, nor did they sell the nickel to any third-party buyers. The trading was a Ponzi scheme propped up by various forgeries and false representations to the investors, said the judge, and none of the money from investors was used to buy nickel. Instead, the funds were transferred to Ng, paid as directors' fees to Ng and another director Ms Lee Si Ye, paid as commissions, profit-sharing payments, referral fees or other payments to various employees, paid as "profits" in excess of invested principal to investors, or transferred or paid to related entities such as other companies owned by the Envy companies. TWO DIRECTORS FOUND LIABLE FOR MILLIONS OF DOLLARS The High Court on Tuesday issued two lengthy judgments on the case. First, it found two directors of the Envy companies jointly liable for total sums of S$593 million, US$192 million and 880,000 euro (US$1.02 million). This amounts to about S$842 million. This sum corresponds to the total amount of money owed by the insolvent Envy companies to investors. Ms Lee, a trained accountant who came to know Ng during the course of her previous job as an auditor, was found fully liable for the entire sum. The second director, Envy's head of trading Mr Ju Xiao, was found liable for up to 40 per cent of the same sum. The court also found administrative executive and client support associate Mr Cheong Ming Feng, who conveyed Ng's instructions to another party to forge documents, liable for S$1.92 million. Ng was the founder of the Envy companies and held at least 80 to 90 per cent of the ordinary shares of the companies. Ms Lee held the remaining 10 to 20 per cent of the ordinary shares. During her employment with the Envy companies, she was directly responsible and had oversight over the Envy companies' "back-office functions". These included accounting, updating of records of the flow of funds between the companies and investors and calculation of commission, salaries, bonuses and profit shares to be paid to employees. The judge said Ms Lee clearly had some knowledge of the "various discrete aspects" of Ng's fraudulent behaviour. ShHe was "grossly derelict" in her duties and failed to make the sort of inquiries that any director should have made. However, there was also evidence that she was being duped by Ng, as she had numerous family members invest money in the purported nickel trading. There was also evidence of Ng reassuring her that the business was legitimate. The court found that Mr Ju was aware of, or chose to be "wilfully blind" about the hollow nature of the nickel trading. He forged four contracts and coordinated with Ng on what details were required, and knew that the purported trading was amiss. Having experience in commodities and metal trading, he conceded that he did not personally invest in the trading as the returns seemed "too high", the court said. The administrative executive, Mr Cheong, knew that he was creating forgeries, which were being circulated to internal employees and external investors, the court found. However, he did not know that such actions were to prop up a non-existent scheme. The court found that he possessed "a rather rudimentary understanding" of the business, and the power differential was apparent from his correspondence with Ng, as Mr Cheong did what he was told. Mr Cheong had invested in the nickel trading personally, and even paid investors out of his own pocket to keep the business going when Ng was arrested. The court found only Mr Ju liable for fraudulent trading, as he was a knowing party to the Ponzi scheme or at least chose to be wilfully blind about its nature. While Ms Lee and Mr Cheong acted dishonestly or inappropriately in some way and fell "far short" of the standards required of them in their roles, neither of them knew that the nickel trading was a Ponzi scheme. PAYMENTS TO OTHER EMPLOYEES CAN BE CLAWED BACK The plaintiffs sued for different types of payments that had been given to the trio to be clawed back. These include profit sharing and commission payments, salaries, allowances, bonuses and reimbursements, directors' fees and dividends. The court ruled that all payments sought by the plaintiffs be clawed back from the trio. This is with the exception of Ms Lee's and Mr Cheong's basic salary payments, which were contractual obligations. Ms Lee had a basic monthly salary of S$5,500 from January 2016. She also had a variable component of her salary which was 20 per cent of the company's monthly net profit. Her basic salary became S$13,200 from September 2020 and she could get a discretionary bonus based on performance. Mr Ju had a basic monthly salary of S$24,000 per month from November 2019, with a possible two months' bonus. Mr Cheong had a basic monthly salary of S$2,600 from May 2017, along with a variable portion of his salary which was 50 per cent of the company's monthly net profit generated by his clients. In September 2020, his basic salary increased to over S$3,000 in September 2020 and he could get a performance bonus. The second judgment issued by the court allowed the claimants to claw back commission payments, profit sharing payments, referral fees and over-withdrawn sums from six Envy employees. They are: Sales directors Mr Lau Lee Sheng and Mr Teo Wei Wen Benjamin, financial accountant and office operations director Ms Shen Xuhuai, sales associates Mr Koh Hong Jie and Mr Chua Wei Jian Jordan and business development director and marketing communications director Mr Guo Yujia. Mr Lau was found liable for S$17.9 million, Mr Teo was found liable for S$10.2 million, Ms Shen was found liable for S$6.1 million, Mr Koh was found liable for about $5 million, Mr Guo was found liable for S$2.6 million and Mr Chua was found liable for about S$370,880. All six of them had been paid commissions for referring investors to invest in the fake nickel trading. Four of the them had been paid "over-withdrawn sums", which refer to the money in excess of their investment principals in the purported nickel trading. The judge noted that "for any Ponzi scheme to achieve a certain scale, its primary architect would require enablers: individuals who knew full well what was going on but were happy to keep quiet as long as their financial interests were advanced by doing so, or individuals who engaged in questionable business practices without asking too many questions". "This case features the unfortunate confluence of all of these truly distressing features. The outcome was a truly shocking one," he said. The verdict in Ng's separate criminal trial is pending.
Bloomberg
22-07-2025
- Business
- Bloomberg
UK Eases Foreign Investment Scrutiny With Focus on Water, Chips
The UK is narrowing the scope of its national security regime surrounding foreign investments to ease the burden on most businesses while focusing scrutiny on the sectors most vulnerable to malign foreign interference, including water, semiconductors and critical minerals. Changes to the National Security and Investment Act due to be announced Tuesday will lift requirements for businesses operating in 17 sensitive sectors to notify the government about certain types of internal reorganizations and the appointment of liquidators, according to people familiar with the matter.
Zawya
02-07-2025
- Business
- Zawya
Standard Chartered Bank faces $2.7bln lawsuit over alleged role in 1MDB fraud
KUALA LUMPUR: Liquidators trying to recover money from Malaysia's sovereign wealth fund 1MDB have sued Standard Chartered Bank in Singapore, alleging it enabled fraud that led to more than $2.7 billion in financial losses more than 10 years ago. Standard Chartered on Tuesday said that it emphatically rejected the claims. The move is the latest in a wide-ranging effort to recover money belonging to 1Malaysia Development Berhad (1MDB), from which U.S. investigators say about $4.5 billion was stolen between 2009 and 2014 in a complex, globe-spanning scheme. Shares in Standard Chartered fell on Tuesday and were down 2.7% by 1110 GMT, against a 0.3% drop in London's FTSE 100 . Malaysian authorities have previously said there were billions of dollars more that were unaccounted for. Liquidators from financial services firm Kroll, which filed the lawsuit in the High Court of Singapore, said in a statement on Monday they were seeking to hold Standard Chartered accountable for its role in allegedly enabling fraud to be committed against 1MDB. Three companies in liquidation linked to 1MDB say Standard Chartered permitted over 100 intrabank transfers between 2009 and 2013 that helped conceal the flow of stolen funds. They also allege the bank chose to overlook obvious red flags in relation to the transfer of funds, resulting in the losses, the liquidators said. "According to this lawsuit, the transfers demonstrate serious breaches and control failings which ultimately enabled the theft of public funds by people operating at the highest levels of the Malaysian government during that period," the liquidators said. Standard Chartered said it had not yet received the legal filing documents. "Any claims by these companies are without merit and Standard Chartered will vigorously defend any lawsuit commenced by the liquidators," Standard Chartered said in a statement to Reuters. It added the liquidators had earlier publicly stated the firms involved were shell companies with no legitimate business and were linked to alleged 1MDB mastermind and fugitive Low Taek Jho, also known as Jho Low. Low has consistently denied wrongdoing. The liquidators said the funds that flowed through the Standard Chartered accounts included transfers to the personal bank account of former Malaysian Prime Minister Najib Razak, who is serving a six-year prison sentence after being convicted of graft linked to 1MDB. The fund transfers also involved business payments and purchases of jewellery and luxury goods for Najib's wife and stepson, the liquidators said. Najib and his family members have consistently denied wrongdoing. The Board of 1MDB welcomed the move by the court-appointed liquidators. "The Malaysian people were the true victims of this global fraud, and all parties are determined to hold every facilitator to account - including financial institutions that failed in their most basic duties of vigilance and responsibility," a spokesperson for the board said. At least six countries, including Singapore and Switzerland, have launched investigations into 1MDB dealings in a global probe that has implicated banking and high-ranking officials worldwide, including Najib and executives from U.S. bank Goldman Sachs. Malaysia said last year it had recovered a total of 29 billion ringgit ($6.92 billion) in 1MDB assets between 2019 and February 2024. In 2016, Singapore's central bank imposed penalties of S$5.2 million on the local unit of Standard Chartered for money laundering breaches related to the 1MDB scandal. The Monetary Authority of Singapore said its investigations into Standard Chartered revealed "significant lapses in the bank's customer due diligence measures and controls for ongoing monitoring" but did not find "wilful misconduct". News of the lawsuit on Tuesday weakened Standard Chartered's share price. "While it's tough to gauge the lawsuit's outcome, the potential hit - about 7% of market cap – is likely enough to weigh on shares in the short term," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Standard Chartered is facing a separate $1.9 billion lawsuit in London over allegations the lender broke U.S. sanctions against Iran in a more widespread way than it has previously admitted. ($1 = 4.1910 ringgit) (Reporting by Rozanna Latiff; Additional reporting by Yantoultra Ngui in Singapore and Danial Azhar in Kuala Lumpur and Tommy Reggiori Wilkes in London; Editing by David Stanway, Sonali Paul and David Evans)
Wall Street Journal
01-07-2025
- Business
- Wall Street Journal
Liquidators File $2.7 Billion Lawsuit Against Standard Chartered Bank Over 1MDB Role
Court-appointed liquidators have filed a $2.7 billion lawsuit against Standard Chartered STAN -2.36%decrease; red down pointing triangle Bank, alleging its involvement in the 1MDB scandal. The lawsuit was filed in the High Court of Singapore, according to a statement on Tuesday from the board of 1Malaysia Development Bhd., the state-controlled economic development company known as 1MDB.
South China Morning Post
01-07-2025
- Business
- South China Morning Post
Malaysian liquidators sue Standard Chartered in Singapore, alleging its role in 1MDB fraud
Liquidators for Malaysia's sovereign wealth fund 1MDB have sued Standard Chartered Bank in Singapore, alleging it enabled fraud that led to more than US$2.7 billion in financial losses more than 10 years ago. Advertisement Standard Chartered, the UK-headquartered bank in Singapore, on Tuesday said that it emphatically rejected the claims. The move is the latest in a wide-ranging effort to recover money belonging to 1Malaysia Development Berhad (1MDB), from which US investigators say about US$4.5 billion was stolen between 2009 and 2014 in a complex, globe-spanning scheme. Malaysian authorities have previously said there were billions of dollars more that were unaccounted for. Liquidators from financial services firm Kroll, which filed the lawsuit in the High Court of Singapore, said in a statement on Monday they were seeking to hold Standard Chartered accountable for its role in allegedly enabling fraud to be committed against 1MDB. Advertisement Three companies in liquidation linked to 1MDB say Standard Chartered permitted over 100 intrabank transfers between 2009 and 2013 that helped conceal the flow of stolen funds.
