SINGAPORE - A missing sum of about $33 million in an escrow account belonging to Allied Technologies and held by law firm JLC Advisors is believed to have been paid out on the instructions of its managing partner Jeffrey Ong Su Aun, who has been uncontactable for several days.
In a statement filed on Thursday night (May 23) with the Singapore Stock Exchange, Catalist-listed Allied Technologies said the payout of $33.4 million "might have been unauthorised", referring to a letter that it had received from JLC Advisors on Wednesday.
The letter, which carried JLC's letterhead, said the law firm is investigating the matter and has lodged reports with the authorities, said Allied Tech. It added that the amount held by JLC in escrow is also incorrect and should be about $33.2 million.
Allied Tech said despite repeated demands for repayment since March 23 this year and including a letter of demand issued by its lawyers from Rajah & Tann on May 17, JLC has failed to release the balance escrow funds of $33,153,416.56.
Allied Tech said this is a breach by JLC of its obligations under the escrow agreement, which was inked on Oct 23, 2017.
It added: "This is notwithstanding that at all material times, JLC's managing director, Mr Ong Su Aun, Jeffrey, had repeatedly represented to the company that the release of the escrow funds would be forthcoming, and had never once stated that the escrow funds were missing, that it had already been paid out or that JLC would not comply with the company's request to release the escrow funds in accordance with the escrow agreement."
Allied Tech said the authorised joint signatories for any disbursements of funds from the escrow account with JLC comprise both its executive director Kenneth Low Si Ren and independent director Lim Jin Wei.
Mr Low and Mr Lim have individually confirmed to the board that other than the company's demand letter on March 23, they have not given any instructions to JLC, either verbally or in writing, to release the balance sum in the account, said Allied Tech.
It added that any instructions for disbursements of funds are required to be in writing.
In view of the latest developments relating to JLC, Allied Tech said it has instructed its lawyers to respond to the JLC letter to clarify the situation.
It is also requiring the law firm to provide documentary evidence and a statement of accounts of the escrow funds as well as to update Allied Tech on Mr Ong's whereabouts.
Allied Tech has also asked its lawyers to lodge a report with the Singapore Police Force and Law Society of Singapore, and start legal proceedings to protect the company's interests.
"The company is monitoring the situation closely and will take rigorous steps to protect its interests. The company will continue to provide further updates to shareholders on subsequent material developments," said Allied Tech in the statement.
Meanwhile, Mr Ong has remained uncontactable for several days now and police investigations are ongoing.
The Law Society on Wednesday said it has intervened in the law firm's client account, saying: "As a result of information received... the Council of the Law Society has reason to suspect dishonesty on the part of a solicitor in JLC Advisors LLP in connection with that solicitor's practice.
"In the circumstances, the Law Society confirms that it had intervened into JLC Advisors LLP's client account on May 22."
The society's governing council has also notified law firms with pending matters relating to JLC's client account to provide details about the amount of client money held, and to whom and when it is to be paid.
Under the Legal Profession Act, the Law Society can intervene in certain circumstances, including when there is suspected dishonesty, when a lawyer is bankrupt or when he has outstanding judgments amounting to $100,000 that he cannot settle within six months.
Safeguards have been introduced to tighten the process in which law firms handle clients' monies under amendments to the Conveyancing and Law of Property Act and the Legal Profession Act that took effect from August 2011, following several cases of rogue lawyers who fled with their clients' money.
The key safeguards include a rule barring lawyers acting for buyers or sellers in property deals from receiving and holding conveyancing money in their normal client accounts.
Instead, they will have to open conveyancing accounts with banks appointed by the Law Minister.
Any withdrawal or payout from a conveyancing account would require a two-party authorisation, to prevent a lawyer from acting alone.