Four weeks in prison, 5 years ban for the former entrepreneur who authorized the laundering of nearly 50 million dollars

SINGAPORE – He was appointed as a director of the company but was not involved in any aspect of its management and affairs.

On Friday June 3, 38-year-old Eng Cheng Song was sentenced to four weeks in prison and banned from being a company director for five years, after the company was used to launder some $33.5 million ( S$46 million) of fraud proceeds.

In a statement on Friday, police said he was found guilty of failing to exercise due diligence in the performance of his duties as a director of a company.

Investigations by the Commercial Affairs Department revealed that he was a director of Enston Corporate Services, a Singapore-based accounting firm that provides corporate secretarial services.

Eng had a standing arrangement with his business partner in Enston, for him to be appointed resident director of companies that foreign clients wished to incorporate in Singapore.

In April 2019, one such company, Phima, appointed Eng as resident director to help incorporate the company on behalf of an overseas client with the help of Enston.

Control of Phima and its bank accounts was ceded to the foreign manager by Eng who also failed to monitor transactions in the bank accounts.

As a result of this failure to exercise due diligence in performing her duties as a director of Phima, she received approximately $33.5 million in fraud proceeds from a foreign company between November and December 2019.

Anyone who commits an offense under section 157(1) of the Companies Act may be imprisoned for up to 12 months or fined $5,000.

The statement adds that corporate directors who fail to exercise due diligence in performing their duties as directors run the risk of allowing their companies to facilitate the retention or control of benefits derived from criminal behavior.

The police take the offense seriously and will continue to take offenders to task.

Individuals should not be directors of a company when they have little or no oversight or control, as the company may be used for illegal purposes such as laundering criminal proceeds.

A search of the Accounting and Corporate Regulatory Authority business register showed that Phima, which was registered in April 2019, has been delisted.

Enston is still in business.