Liquidators score victory to recoup over $900 million from alleged scammer Ng Yu Zhi’s associates

SINGAPORE - The liquidators for three companies of Ng Yu Zhi, the

alleged nickel-trading fraudster at the centre of a $1.5 billion nickel trading scam, 

scored a legal victory on July 29 to recover more than $900 million from nine former directors and employees for their role in Singapore’s biggest Ponzi scheme.

In 2021, the liquidators of Envy Asset Management (EAM), Envy Global Trading (EGT) and Envy Management Holdings (EMH) sued Ng, former directors Lee Si Ye and Ju Xiao, and former employee Cheong Ming Feng.

Court documents state that Ng’s three companies received about $1.09 billion, US$277.2 million (S$357 million) and €980,000 (S$1.4 million) in investor funds, supposedly for nickel trading.

Of those sums, $593 million, US$192.2 million and €880,000 remain outstanding to investors.

In a 180-page judgment issued on July 29, the liquidators, who are represented by lawyers David Chan, Daryl Fong and Lin Ruizi of Shook Lin & Bok, were awarded damages after Ms Lee, Mr Ju and Mr Cheong were found to have breached their duties. They also received damages for fraudulent trading by Mr Ju.

The trio were also ordered to pay back about $27 million in commission payments, profit sharing, bonuses, CPF payments, directors’ fees and dividends.

The High Court, however, ruled that the July 29 judgment is “not binding” on Ng, who was made bankrupt in December 2022.

Civil proceedings against the former managing director of EGT and EAM stopped as a result.

Ng’s criminal trial on 42 charges ended on July 7 after he opted not to take the stand. He had faced a total of 108 charges over offences including cheating, forgery, fraudulent trading, money laundering and criminal breach of trust.

In awarding damages to the liquidators, High Court Judicial Commissioner Mohamed Faizal found that the nickel trading scheme did not exist and none of the investors’ monies were used to buy nickel from Poseidon Nickel.

This is the Australian firm that Ng claimed to have bought nickel from.

Instead, the funds were transferred to Ng through Envy Asset Management Trading, paid as directors’ fees to Ng and Ms Lee, and as commission payments, or profit sharing fees to the defendants and other employees.

The funds were also used to pay referral fees or “profits” in excess of the invested principal to investors; and transferred or paid to other companies owned by Ng or his Envy companies, the judicial commissioner found.

The High Court also found that the Envy companies were “hopelessly insolvent and unable to pay their debts. Neither EGT nor EMH had any legitimate, revenue-generating business, and there was no other meaningful business undertaken by the Envy companies”.

There was also “compelling evidence of the shocking level of ineptitude and nonchalance” on the part of Ms Lee, who allegedly helped Ng cover up details of fraudulent transfers of $416.5 million and US$17.7 million to his own bank accounts under false pretences, according to the ruling.

She was found to be “grossly negligent” but “did not have actual knowledge” of the Ponzi scheme as she and her own family members and loved ones also invested in the scheme, the judicial commissioner pointed out.

As for Mr Ju, the High Court found that he was in breach of his director’s duties and liable for fraudulent trading, among other things.

“That he was willing to forge documents, fraudulently change the paid-up capital sums for EGT and mislead investors... spoke to his entire approach to his role as a director and employee of the company. These actions also reflect his willingness to be complicit in whatever he was asked to do. This made a mockery of his duties as a director of EGT,” the judge said.

Mr Cheong, the former employee, knew that he was creating forgeries, and also became aware that these were being circulated to both internal employees and external investors, but the High Court found that he did not know that such actions were being done to prop up a sham scheme.

For one thing, Mr Cheong was “not particularly sophisticated and possessed a rather rudimentary understanding of the business”.

His own investments “started even before he joined the Envy companies and he had assisted some of his friends to do the same, which suggests that he himself bought into the logic of the purported nickel trading”, the judicial commissioner said.

Regardless of whether Ms Lee, Mr Ju or Mr Cheong had knowledge of the Ponzi scheme, they were still ordered to return most of the monies they had received from the Envy companies.

In a separate 62-page judgment released on July 29, the High Court ordered six other former employees of the Envy companies to cough up more than $42 million in fictitious profits, commission payments, profit sharing and referral fees paid to them.

This award is subject to a deduction of income tax payments made by these six employees.

Former employees Lau Lee Sheng, Benjamin Teo Wei Wen, Shen Xuhuai, Koh Hong Jie (Xu Hongjie), Guo Yujia and Jordan Chua Wei Jian were named defendants in this suit brought by the liquidators.

The High Court allowed the liquidators to claw back monies paid to them after finding that the Envy companies “were never under any obligation to pay the commission payments and profit sharing payments to the defendants because the (companies) never made any actual profit”.