Trek 2000 founder and thumb drive inventor Henn Tan pleads guilty to falsifying accounts, cheating
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Henn Tan has been in remand for 1½ months now, although he has been offered bail at $400,000.
PHOTO: BT FILE
Tay Peck Gek
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SINGAPORE (THE BUSINESS TIMES) - Henn Tan, who founded the company that developed the ubiquitous thumb drive, pleaded guilty on Monday (Aug 15) to five charges of engaging in conspiracies to falsify accounts, forge documents to cover his tracks and cheat external auditors.
Represented by Mr Daniel Cai and Mr Wesley Chan of Drew & Napier, the 66-year-old former chief executive of mainboard-listed Trek 2000 International will be sentenced on Sept 22, when the judge will also consider Tan's four other similar charges.
Meanwhile, Tan has been in remand for 1½ months now, although he has been offered bail at $400,000, according to the court system.
The court heard that the accused, who shot to prominence as inventor of the revolutionary thumb drive, or USB flash drive, had from as far back as between 2006 and 2011 conspired with then chief financial officer Gurcharan Singh to make false entries in Trek 2000's financial statements pertaining to some licensing income.
Their crimes had been well under wraps for years. It was when Trek 2000's auditors Ernst & Young (EY) discovered that Tan and his co-accused had cooked the books for financial year 2015 that their offences began to unravel.
Then, Tan had realised that the company's performance for financial year 2015 would be dismal and conspired with a few senior officers to inflate revenue and pre-tax operating profit by plucking a US$3.2 million sale from thin air - accompanied with false supporting documents.
When confronted about the transaction, Tan and his co-accused tried to deceive EY that the sale was genuine and the financial statements had been drawn up properly, the prosecution said.
EY, however, believed that the accused and some co-accused had forged the bank documents and began to conduct further audit procedures, including forensic imaging of the laptops and computers of Singh, then president of regional sales Foo Kok Wah and former executive director Poo Teng Pin.
Also, it looked into some past transactions and uncovered other fictitious deals in 2013.
Unconvinced by the explanations the accused gave, EY reported the matter to the Accounting and Corporate Regulatory Authority, stating that it believed Trek 2000's management had made false and misleading statements regarding the US$3.2 million sale. EY later issued a disclaimer of opinion for Trek 2000's financial statements for financial year 2015.
The cases of Foo and Singh are pending, while Poo has been sentenced to nine months' imprisonment.
Earlier, Tan was fined $80,000 after he negligently did not get the firm to disclose interested person transactions.
He quit the helmsman role after the Singapore Exchange in 2018 objected to him continuing as the CEO, but he remained as chairman emeritus until 2020. Presently, his son Wayne is deputy chairman of Trek.
Trek 2000 shares were trading 0.1 cent lower, or 1.1 per cent, at 9.3 cents on Monday at 1.10pm.
About Henn Tan
Singaporean Henry Tan, who is known as Henn Tan, created and patented the thumb drive, or USB flash drive, in 2000 – a move that made the floppy disk obsolete.
His company, Trek 2000 International, started out as a small electronic parts trading firm in Geylang.
Born to a pest-control worker father and housewife mother, Tan joined Japanese firm Sanyo in 1980 as a salesman and worked his way up to be a director.
He also changed his name from Henry to Henn as it sounded close to “heng”, or lucky in Hokkien.
After 15 years at Sanyo, he quit and bought over Trek, a small family-owned electronics component trading business, for $1 million.
In 2000, Mr Tan presented the thumb drive at the CeBIT international technology fair in Germany.
That year also saw Trek 2000 being listed on the Singapore Exchange (SGX).
Tan, who is now 66, was named Ernst & Young Emerging Entrepreneur of the Year in 2002.
However, in 2016, it was revealed that several key executives of Trek 2000 were interviewed by the Commercial Affairs Department in relation to a possible offence.
SGX’s regulation unit put Tan on its watch list. In the same year, Tan quit his roles as chairman, chief executive and executive director.
