Prosecution calls for up to 10 years’ jail for S’porean over offences linked to collapsed Wirecard

SINGAPORE - R. Shanmugaratnam should be jailed for between 8½ and 10 years over his offences linked to collapsed German payments company Wirecard, the prosecution has urged the court.

On Nov 20, Deputy Public Prosecutor Gordon Oh also asked for Briton James Henry O’Sullivan, 51, who abetted Shanmugaratnam, to be given between six and seven years’ jail.

This is because the two men’s offences had a transnational element, involved a significant amount of money and could affect Singapore’s reputation as a global financial hub.

In September, Shanmugaratnam, a 59-year-old Singaporean, was

convicted of 13 counts of falsification of accounts

linked to nearly €1.1 billion (S$1.65 billion) purportedly in escrow for Wirecard and its related firms.

At the time of the offences, he was a director of auditing services firm Citadelle Corporate Services.

O’Sullivan was earlier convicted of five counts of falsification of accounts.

Shanmugaratnam’s lawyer Megan Chia pleaded for her client to be given three years’ jail on Nov 20.

She told the court that there is no evidence of her client’s direct involvement in the cases linked to Wirecard AG’s former chief operating officer Jan Marsalek and Oliver Bellenhaus, who used to be managing director of Cardsystems Middle East FZ – a Dubai subsidiary of Wirecard Technologies.

O’Sullivan is represented by lawyer Tito Shane Isaac, who asked the court to sentence his client to either a heavy fine or 16 weeks’ jail.

Mr Isaac told District Judge Kow Keng Siong that there is no evidence that his client had benefited from the offences, and that the case was not one involving misappropriation of funds.

Shanmugaratnam and O’Sullivan will be sentenced on Jan 6, 2026.

In earlier proceedings, the court heard that from 2016 to 2018, Shanmugaratnam, who was then a director of Citadelle Corporate Services, issued 13 balance confirmation letters.

The documents falsely confirmed to Wirecard AG, its related companies WCUKI and Cardsystems, as well as their auditors, that Citadelle held nearly €1.1 billion in escrow for the Wirecard entities across three financial years. Escrow is an essential service in capital markets that supports transactions such as mergers and acquisitions.

O’Sullivan had abetted Shanmugaratnam to issue five of the letters in March 2017, the court heard.

The pair’s cases are said to be linked to Marsalek,

an Austrian fugitive, a former businessman and suspected spy operative for Russia

.

Marsalek was the chief operating officer of Wirecard AG from 2010 to 2020. An Interpol Red Notice has been issued against him.

Once such a notice is issued, the police in other countries can be on the lookout for foreign offenders. The Red Notice can then be used to support extradition proceedings after an arrest is made.

Bellenhaus, who is a German, was also named in court documents tendered by Singapore’s prosecution.

DPPs Oh, Alexandria Shamini Joseph and Louis Ngia earlier stated in court documents that O’Sullivan got to know Shanmugaratnam after the Briton engaged Citadelle’s services to set up companies in Singapore.

Citadelle then offered corporate secretarial services to 30 of O’Sullivan’s companies, including Brightyear, Senjo Group and Senjo Payment.

O’Sullivan was also the owner of multiple accounts on e-mail platforms and messaging app Telegram.

Shanmugaratnam believed that he was communicating with O’Sullivan through these e-mail accounts, said the prosecution.

Court documents stated that O’Sullivan was Marsalek’s long-time business partner and friend.

O’Sullivan introduced Marsalek to Shanmugaratnam on an occasion before July 2015, said the prosecutors.

“According to (Shanmugaratnam), he was asked by (Marsalek) to act as an escrow agent between Wirecard entities and (O’Sullivan’s) companies,” they added.

Among other things, Shanmugaratnam received a request on Feb 23, 2016, from accounting firm Ernst & Young (EY) for Citadelle to confirm the balance of all accounts held by Wirecard AG and/or its subsidiaries with Citadelle as of Dec 31, 2015.

In March 2016, he received a document from Marsalek, which “contained draft wordings to be put into balance confirmation letters”. “Shortly after, Shanmugaratnam prepared (three) letters on Citadelle’s letterhead using the wording provided in (the) document”, the prosecutors said.

“Shanmugaratnam then sent the three letters to EY via e-mail on March 29, 2016. On the same day, EY Germany replied to confirm receipt of the e-mail.”

The letters had mentioned three escrow accounts, and each of them purportedly had a balance of between €30 million and more than €66 million.

Court documents stated that in fact, Citadelle was not holding these sums of money for Wirecard and/or its subsidiaries as of Dec 31, 2015.

On May 23, 2016, Shanmugaratnam received an e-mail from Bellenhaus, asking him to provide confirmation that Citadelle held an additional €41.5 million in an escrow account as of March 31, 2016.

The e-mail contained the wording to be used for a letter of confirmation to be addressed to WCUKI.

In May that year, Shanmugaratnam prepared letters using words provided by Bellenhaus. After that, he sent them to Bellenhaus via e-mail.

The letters had mentioned two escrow accounts, and each of them purportedly had a balance of between €30.3 million and €41.5 million as of March 31, 2016.

Shanmugaratnam went on to commit similar offences involving the remaining letters, and five of them were linked to O’Sullivan.

Wirecard

filed for bankruptcy in 2020

after disclosing that €1.9 billion of cash, supposed to be in bank accounts in the Philippines, did not exist.

The company’s former chief executive Markus Braun and several other top executives were then arrested.