Two executives of a contractor for the Ministry of Home Affairs (MHA) that falsified papers to overcharge the Police Coast Guard (PCG) more than $102,000 for 91 marker buoys will have to pay higher fines after the High Court allowed an appeal by the prosecution.
Leow Ban Leong and Foo Fang Liong of Prelim Construction, a construction services company, were convicted of three charges each of engaging in a conspiracy to falsify company papers.
Leow, who is chief executive officer of Prelim Construction, and senior manager Foo were each fined $90,000. Foo's original fine was half of the new amount Justice Chan Seng Onn decided on last Thursday. The court had also dismissed the duo's appeals against their convictions on Feb 12.
As the term contractor of MHA, Prelim Construction had been engaged to supply 91 marker buoys at Poyan and Tengeh reservoirs in western Singapore, for the PCG's floating sea barrier project, an initiative to deter illegal intrusions along the Singapore coast.
As marker buoys were considered "star-rate" items under the contract, Prelim Construction was entitled to a reimbursement of the cost, plus a 5 per cent mark-up. The firm was also required to submit a declaration form that the price quoted was the nett price paid to its supplier and no information had been suppressed to the disadvantage of the Government.
Apart from Prelim Construction, another company, Thong Huat, had been contracted for the PCG project in eastern Singapore - Pasir Ris, Marina and Tanah Merah. Both firms were asked to buy the components required, deliver them and invoice PCG by March 18, 2010.
Upon finding out that Thong Huat had bought the marker buoys from marine equipment company Wealth Marine for a unit price of $2,500, Prelim Construction approached the same firm for a quote. After negotiations, Prelim Construction bought the marker buoys for a unit price of $1,500 from Wealth Marine.
However, when Prelim Construction sent PCG an invoice for the marker buoys, it was based on a unit price of $2,500, plus a 5 per cent mark up - amounting to an overcharge of more than $102,000, which PCG paid accordingly.
The overcharging was subsequently discovered during an audit by the Auditor-General's Office (AGO) in mid-2010, when documents to support payment for the PCG project were found to be incomplete. When the AGO requested supporting documents, Prelim Construction did not provide them and instead gave backdated and false quotations of other suppliers.
This led to the AGO suspecting that Prelim Construction had overcharged PCG and that the "supporting documents" sent to the AGO had been falsified. PCG then filed a police report, and the issue was investigated by the Commercial Affairs Department.
Correction note: A previous version of this story said that Leow was fined $180,000 after an appeal in the High Court. While that was the sentence passed on March 14, the parties later re-convened the next day to correct his sentence to the maximum fine of $90,000 that had already been imposed by the District Court trial judge.