Jail for former company director who allowed money laundering of nearly $50m

SINGAPORE - He was appointed a director of the company but was not involved in any aspect of its management and affairs.

On Friday (June 3), 38-year-old Eng Cheng Song was sentenced to four weeks in jail and disqualified from being a company director for five years, after the company was used to launder some US$33.5 million (S$46 million) of fraud proceeds.

In a statement on Friday, the police said he was found guilty of failing to exercise reasonable diligence in the discharge of his duties as a director of a company.

Investigations by the Commercial Affairs Department revealed that he was one of the directors of Enston Corporate Services, a Singapore-based accounting firm which provides corporate secretarial services.

Eng had a standing arrangement with his business partner in Enston, for him to be appointed as the resident director for companies that foreign clients wanted to incorporate in Singapore.

In April 2019, one such company, Phima, appointed Eng as its resident director to help incorporate the company on behalf of a foreign client with Enston's assistance.

Control of Phima and its bank accounts was relinquished to the foreign director by Eng who also did not monitor the transactions in the bank accounts.

As a result of this failure to exercise reasonable diligence in the discharge of his duties as Phima's director, Phima received about US$33.5 million of fraud proceeds from a foreign company between November and December 2019.

Any person who commits a breach of Section 157(1) of the Companies Act can be jailed for up to 12 months or fined $5,000.

The statement added that company directors who fail to exercise reasonable diligence in the discharge of their directors' duties run the risk of allowing their companies to facilitate the retention or control of benefits derived from criminal conduct.

The police take a serious view of the offence and will not relent in taking offenders to task.

Individuals should not be a director of a company when they have limited or no oversight or control, as the company may be used for illegal purposes such as the laundering of criminal proceeds.

A search on business registry Accounting and Corporate Regulatory Authority showed that Phima, which was registered in April 2019, has been struck off.

Enston is shown to still be in operation.

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