Ex-Sakae Holdings director on trial for allegedly misappropriating $15.8m from joint venture

Former Sakae Holdings director Andy Ong Siew Kwee is on trial on three charges, including criminal breach of trust. PHOTO: ST FILE

SINGAPORE - Former Sakae Holdings director Andy Ong Siew Kwee went on trial on Monday over the alleged misappropriation of $15.8 million from a real estate investment joint venture.

Sakae Holdings is a Singapore-based food and beverage company that runs the Sakae Sushi chain.

The money was reportedly transferred from the joint venture entity, Griffin Real Estate Investment Holdings (GREIH), in September 2012 to two other companies in which Ong had stakes, ERC International and ERC Unicampus.

Ong faces a total of 69 charges. The 52-year-old is contesting three charges – criminal breach of trust, abetting the forgery of a lease agreement, and intentionally giving false evidence in the High Court.

His remaining charges have been stood down during the trial.

Ong’s two co-accused, Ho Yew Kong and Chris Chua Wei Tat, are on trial on one charge each of intentionally giving false evidence in the High Court.

Ong was a majority shareholder, director and founder of ERC Holdings, through which he held stakes in ERC Institute, ERC International and ERC Unicampus. They provide programmes and resources for businesses here.

He was also a director and minority shareholder of investment holding company Gryphon Real Estate Investment Corporation (GREIC).

Some time in 2009, Ong approached his long-time acquaintance Douglas Foo to co-invest in a joint venture to acquire most of the units in shopping centre Bugis Cube at North Bridge Road.

Foo was then managing director of Apex-Pal International, which later became Sakae Holdings.

The parties agreed that Sakae and GREIC would each contribute capital to GREIH, which, as the joint-venture vehicle, would hold the units at Bugis Cube.

At the time, Andy Ong and Ong Han Boon were directors of GREIH.

On Sept 3, 2010, following a joint venture agreement between Sakae and GREIC, Sakae contributed $4 million to GREIH and became a 24.69 per cent minority shareholder, with the remaining shares in GREIH held by GREIC.

Deputy Public Prosecutors Nicholas Tan, Jason Chua, Tay Jingxi and Foong Ke Hui said that in June 2012, Andy Ong abetted Ong Han Boon to falsify a lease agreement between GREIH and ERC Institute.

Ong Han Boon has since pleaded guilty.

Chua allegedly prepared the agreement, which was reportedly signed by Ho on behalf of GREIH and Ong Han Boon on behalf of ERC Institute.

The prosecution said the document falsely purported that it was created on March 1, 2012.

After the $15.8 million was transferred, Andy Ong claimed the money was compensation paid by GREIH to ERC Institute for termination of the lease agreement.

But the prosecution said GREIH and ERC Institute had not entered into any formal lease to rent out the space in Bugis Cube to the educational institute.

Instead, by March 2012 and possibly earlier, Andy Ong was already pursuing a different plan to subdivide GREIH’s units in the building and sell them individually, argued the prosecution.

These acts came to light when Sakae engaged PriceWaterhouseCoopers (PwC) to examine the financial and accounting affairs of GREIH in November 2012. In the course of the audit, PwC questioned a number of transactions, including the transfers amounting to $15.8 million.

“The evidence will show that numerous other falsified documents were subsequently created to add to the false paper trail,” said the prosecution.

It added that letters were also falsified to justify why the $15.8 million was transferred to ERC International and ERC Unicampus instead of ERC Institute, which should have received the money if it was indeed compensation for termination of the lease agreement.

If convicted of criminal breach of trust, an offender could be jailed for up to seven years, fined, or both.

The trial continues.

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