Vickers Venture caught up in alleged billion-dollar nickel trade scam

Technology start-up investor Vickers Venture Partners has been caught up in the allegedly fraudulent nickel trading scheme of a Singaporean businessman and his Envy Global Trading, prompting a review by the Monetary Authority of Singapore (MAS).

Vickers would be the highest-profile investor yet to have fallen victim to the suspected US$740 million (S$986 million) swindle, which the Singapore authorities have said could be the biggest investment fraud the financial hub has ever seen.

The alleged mastermind, Ng Yu Zhi, has been charged with suspected crimes ranging from faking the purchase and sale of nickel to falsifying transfers from Citibank and account statements that showed millions in funds.

Licensed fund managers must have policies to manage risks, including proper checks before investments, MAS said in response to Bloomberg's queries on Thursday. The authority added that it was performing a supervisory review of Vickers Venture Partners to "ascertain that it has met these requirements".

Vickers Venture's founder Finian Tan said in a reply to Bloomberg's query that he was a personal investor in the receivable financing funds floated by Envy Global Trading, which the authorities believe involved false contracts. Two Vickers funds were also investors in companies with exposure to the same trade, Mr Tan said, adding that the initial due diligence process did not raise any red flags.

Mr Tan also confirmed that Ng is among investors in a company that made a small investment in Vickers and another company that put a small amount in one of its seven funds. A representative for Ng did not immediately respond to an e-mailed query.

Vickers has US$953 million of assets under management, including co-investments. Its founder and chairman was an early investor in Chinese technology giant Baidu.

"We are expecting this year to be the best ever year for both funds even if we have to write off the RFEGT investments to zero," Mr Tan said in a statement, referring to the receivable financing investment. "As venture capitalists, we swing for the fences. And when mistakes occur, we should of course try to minimise them."

Mr Tan said his fund's ability to hit a "home-run" by taking risks has allowed it to produce outsized returns in the past. "If we slow down our swing and can no longer hit home-runs, then we are done for," he added.

The fraud allegations against Ng centre on his dealings at Envy Asset Management and Envy Global Trading, firms he controlled and where he was a director. Of the more than $1 billion that had been invested in the companies, $300 million was transferred to Ng's personal account while an estimated $200 million remains unaccounted for, prosecutors alleged in court proceedings last month.

While investors have received payments worth $700 million, they are owed another $1 billion based on the face value of outstanding contracts, prosecutors said.

Singapore's High Court last week approved KPMG as the interim judicial manager of three companies that are linked to the case.

BLOOMBERG