Ex-independent director of healthcare group who failed to declare $1.5m fee convicted of cheating

SINGAPORE - The lead independent director of listed firm Singapore O&G (SOG) failed to declare beforehand a fee of $1.5 million that he later received after it acquired several companies in 2015.

Instead, Christopher Chong Meng Tak, who resigned from the SOG board in 2017, took steps to conceal his interest in the acquisition from parties including the board and the seller of the acquired companies.

As a result, SOG, a women’s and children’s healthcare group, was induced into proceeding with the acquisition at a price of $26.5 million, with its board unanimously approving the deal at a meeting on Nov 4, 2015.

In their submissions, the prosecutors said: “Had the directors of SOG known of the accused’s undisclosed interest, they would not have proceeded with the acquisition... without further conditions or questions.

“The accused then obtained a fee of $1.5 million by billing the seller using Paromay, a company he owned and controlled.”

After a trial, Chong, 64, was convicted on Wednesday of two counts of cheating.

Some time between 2013 and 2015, he received a recommendation that SOG consider including on its platform Dr Joyce Lim Teng Ee – the founder and director of several firms, such as JL Laser & Surgery Centre.

In early July 2015, she was introduced to him to explore the acquisition of her businesses and medical practices by SOG.

The SOG board of directors held a meeting on Nov 4, 2015, and the acquisition was approved.

On Feb 18, 2016, Chong issued an invoice under Paromay that bore his wife’s signature, addressed to Dr Lim, for the sum of $1.5 million as payment for items such as “introduction fee” and “consultancy services”.

Dr Lim later made out a cheque for $1.5 million, which Chong deposited into Paromay’s bank account with Bank Julius Baer (BJB) on March 18, 2016.

Deputy Public Prosecutors David Koh and Daniel Ling told District Judge Carol Ling: “It is undisputed that the accused was in a conflict of interest. He was going to receive a fee of $1.5 million from Dr Lim at the time of the acquisition. The accused would only receive this fee if the acquisition went through.”

The DPPs added that during the trial, all of the prosecution’s witnesses testified that they were unaware of Chong’s interest in the acquisition.

According to court documents, when Chong realised that this payment might be discovered, he instructed his secretary to “never mention Paromay to anyone at SOG ever”.

The DPPs said: “When the accused needed to encash the cheque of $1.5 million into Paromay’s account at BJB and was queried about the source of funds, he lied about the source of funds.

They said Chong deceived BJB into thinking that “the $1.5 million was (a) ‘shadow equity’ in the business and medical practices of Dr Lim, thereby concealing that this was a fee that he had obtained by way of a concealed conflict of interest”.

Chong, who is represented by a team of lawyers from Drew & Napier, including Senior Counsel Cavinder Bull, had claimed that there was an understanding that he would be paid for every doctor who joined SOG.

But the DPPs stated that no one was aware of this understanding.

Chong’s bail has been set at $100,000, and he is expected to be sentenced on May 17.