Court orders 3 Envy group firms linked to fraud scheme wound up

Three companies at the centre of one of Singapore's biggest investment fraud schemes linked to big-spending businessman Ng Yu Zhi will be wound up and put into liquidation, the High Court ruled yesterday.

High Court Justice Ang Cheng Hock granted the applications by interim judicial managers led by KPMG partner Bob Yap to wind up Envy Global Trading (EGT), Envy Asset Management (EAM) and Envy Management Holdings.

The judge also granted the application to discharge the interim judicial managers and appoint Mr Yap and KPMG partners Toh Ai Ling and Roger Tay as liquidators.

This was after Shook Lin & Bok partner David Chan, who is representing the interim judicial managers-turned-liquidators, argued that the companies were "insolvent from the very start" and "the objectives of a judicial management cannot be achieved because there is no business to preserve".

Ng, 34, is accused of having swindled investors into putting at least $1.2 billion into non-existent nickel deals - making his the first investment fraud case here to hit the billion-dollar range.

Ng, former managing director of EGT and EAM, faces 31 charges to date, most of them alleging cheating that took place between September last year and February this year. Other charges include fraudulent trading, forgery and criminal breach of trust involving at least $201.2 million.

"The investment scheme was based on non-existent trades, fraudulently created documents and the promise of big returns. There is no evidence that the EAM and EGT businesses existed... There were no trades made and hence no investment returns made. The companies were insolvent from the very start. They didn't generate any monies and investors were paid from other investors' monies," Mr Chan told the court.

Legal proceedings, including claims against Ng and Ms Lee Si Ye, deputy managing director of the Envy firms, for all liabilities incurred by the firms in relation to the nickel trading scheme, will begin after the High Court ruled to put the firms in liquidation, The Straits Times understands.

To fund the liquidation process, the liquidators will apply to get monies released by the Commercial Affairs Department, which has seized about $100 million of assets from Ng, ST understands.

Justice Ang asked Mr Chan about the course of action to be taken by liquidators to recover the $119.7 million in so-called profits earned by investors from fraudulent investments with EGT.

Mr Chan said there are "several courses of action we are considering" but did not elaborate further.

The possibility that they may have to return their gains arose after KPMG found that "there was no purchase or sale of physical nickel for the purported nickel trading", and as such "there were no investment returns".

"The source of such payments could only be the funds paid in by investors," it found.

The KPMG team's bid to claw back funds is part of efforts to meet creditors' claims against Ng's companies.

The creditors include 522 investors who had lost $841.5 million, of which more than half is alleged to have gone to Ng.

Ng led a lavish lifestyle with personal monthly expenses of around $2 million, including for private jet flights, butler and chauffeur services, alcohol, expenditure at nightclubs and upmarket restaurants, and expenses associated with multiple luxury cars and "significant monetary gifts to his close associates".