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Nominee director fined after firm’s bank account was used to receive $620k in scam proceeds

2024-01-23 00:00:00.0 海峡时报-新加坡原网页

SINGAPORE – A woman who acted as a nominee director of a local company was fined $3,000 after the firm’s bank account received more than $620,000 in scam proceeds.

The court found that Chinese national Zhang Tianxue, 41, did not exercise reasonable diligence in the discharge of her duties as a director as she failed to exercise any supervision over the company’s affairs.

Zhang, who is now a Singapore permanent resident, pleaded guilty on Jan 23 to one charge under the Companies Act. She was also disqualified from being a company director for two years.

Court documents said Zhang got to know one Wu Jinping, a director of JJCA Corporate Services, in 2012. The two were friends and former colleagues.

Some time in 2020, Wu’s friend told her about another friend’s son, one Mr Li Yilun, who wanted to incorporate a company in Singapore.

As the inquiry came from a friend, Wu felt reassured to take on Mr Li as a client. JJCA Corporate Services also conducted background checks and found nothing suspicious. They then set up a company for Mr Li, named Moon SNE.

Zhang was then appointed to serve as the nominee director of Moon SNE in May 2020. She received $1,000 as remuneration.

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But from then till March 9, 2022, when she relinquished her directorship, Zhang did not meet or speak to Mr Li to ascertain the nature of his business, and did not conduct regular checks on the company’s financial affairs.

On March 11, 2021, management consultancy TMF Singapore H alerted the police that its related company based in South Africa had fallen victim to an impersonation scam, and was scammed of more than US$463,000 (S$620,500).

The sum was transferred to Moon SNE’s bank account. The Commercial Affairs Department seized the account one day after receiving the report.

Deputy Public Prosecutor Wong Shiau Yin called for Zhang to be fined $4,000 and given a disqualification order of three years. Said DPP Wong: “Other than being a paper director allowing Moon SNE to meet the statutory requirement of having at least one local director, Zhang made no other contribution to Moon SNE whatsoever.”

Zhang’s lawyer, Ms Jacintha Gopal of R.S. Solomon, said her client reviewed the background checks on Mr Li and the sales invoices he submitted of his business, and believed his business was legitimate.

Subsequently, UOB approved the opening of the bank account based on those invoices, said the lawyer.

She added this was not a case where Zhang had missed obvious red flags on the company’s financial transactions.

Ms Gopal, who asked for a lower fine of $2,000 and a one-year disqualification period, said: “(Zhang) had nothing to do with the impersonation scam and nothing to do with the proceeds that entered into Moon SNE’s bank account. She did not have sinister intentions.”

Wu has been charged with one count of abetting Zhang’s offence.

Her case will be heard at a later date.

Zhang is one of several nominee directors who were hauled to court recently for failing to exercise diligence in their duties.

In September 2023, Singaporean Er Beng Hwa was fined $4,000 and disqualified from being a company director for three years. He had been a nominee director of 186 companies, and one firm was used by scammers to launder $3.23 million.