The company which calls itself Data Register and misled 1,056 firms into paying it a $490 "subscription fee" in November 2013 pleaded guilty yesterday to 500 charges of breaching the Companies Act.
The charges were for failing to state its name and registration number on its business letters. Data Register, which created the impression that it was a government entity, also admitted to another 604 charges which will be considered in sentencing, at a later date.
The case will be mentioned again on May 25.
Each breach under Section 144 of the Companies Act carries a maximum fine of $1,000. The Accounting and Corporate Regulatory Authority (Acra), which brought the case to court, has called for a $400 fine for each charge, or a total fine of $200,000. Data Register is asking for a total fine of $50,000.
"These charges represent a mere fraction of the potential offences committed by the issuance of the letters," Acra chief executive Kenneth Yap told a district court, but the accused had already strained Acra's resources and it decided not to pursue the matter further.
Between last month and November 2013, Acra received an unprecedented 7,884 complaints and inquiries concerning Data Register, and incurred a sum of $59,135.86, paid to external vendors for taking and making calls to members of the public concerning Data Register.
In 2014, the Commercial Affairs Department (CAD) had also investigated Data Register over the alleged scam and seized monies from the company's bank account, but no fraud charges were brought against the company yesterday. The CAD did not respond to queries from The Straits Times by press time.
Even with a conviction, Data Register is not barred from soliciting more business or reviving its payment demands from subscribers.
For its part, Acra said it wrote to Data Register in November 2013, demanding that the firm cease further plans to send "unsolicited business letters with vague and threatening contents", and to offer to remove the firms it had sent letters to from its database and not charge them the $490 fee.
But Acra learnt that some recipients of Data Register's opt-out e-mail the following month found that they were unable to choose the "remove my account" option. And up till July last year, Data Register was sending "final invoice reminders" requesting that firms pay up the $490 to avoid a visit from a credit management company.
Data Register’s two registered directors – Jozsef Laszlo Kovacs, a Hungarian, and Singaporean Logesharan s/o M Soundra Rjan, were not in court yesterday.
Correction note: An earlier version of this story stated that Dr Szilard Toth, a Hungarian citizen, and Singaporean Lee Wei Hsiung, who is employed at corporate secretarial service firm Tricor, are registered directors of Data Register. This is incorrect, as both are no longer listed as directors. Mr Lee ceased to be a nominee director on Dec 17, 2013. We are sorry for the error.