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4 years’ jail for ex-independent director convicted of cheating after failing to declare $1.5m fee

4 years’ jail for ex-independent director convicted of cheating after failing to declare $1.5m fee

Source: Straits Times
Article Date: 18 May 2023
Author: Shaffiq Alkhatib

He failed to declare he would receive $1.5m fee over firm's acquisition of several companies.

The former lead independent director of a listed healthcare firm was sentenced to four years’ jail on Wednesday for failing to declare that he would receive a $1.5 million fee over the firm’s acquisition of several companies in 2015.

Christopher Chong Meng Tak, 64, who resigned from the Singapore O&G (SOG) board in 2017, had instead taken steps to conceal his interest in the acquisition from parties including the board and the seller of the acquired companies.

As a result, SOG, a women’s and children’s healthcare group, was induced into proceeding with the acquisition at a price of $26.5 million, with its board unanimously approving the deal in November 2015.

In February, Chong was convicted of two counts of cheating after a trial.

Before handing down the sentence on Wednesday, District Judge Carol Ling said that the case involved a large sum of money and Chong’s offences involved some degree of planning and premeditation.

She added: “(He) was in a position of trust but he abused it.”

In their submissions, the prosecutors had said: “Had the directors of SOG known of the accused’s undisclosed interest, they would not have proceeded with the acquisition… without further conditions or questions.

“The accused then obtained a fee of $1.5 million by billing the seller using Paromay, a company he owned and controlled.”

Some time between 2013 and 2015, Chong received a recommendation that SOG consider including on its platform Dr Joyce Lim Teng Ee, the founder and director of several firms, such as JL Laser & Surgery Centre. In early July 2015, she was introduced to him to explore the acquisition of her businesses and medical practices by SOG.

The SOG board of directors held a meeting on Nov 4, 2015, and the acquisition was approved.

On Feb 18, 2016, Chong issued an invoice under Paromay that bore his wife’s signature, addressed to Dr Lim, for the sum of $1.5 million as payment for items such as “introduction fee” and “consultancy services”.

Dr Lim later made out a cheque for $1.5 million, which Chong deposited into Paromay’s bank account with Bank Julius Baer (BJB) on March 18, 2016.

Deputy Public Prosecutors David Koh and Daniel Ling had stated in court documents: “It is undisputed that the accused was in a conflict of interest. He was going to receive a fee of $1.5 million from Dr Lim at the time of the acquisition. The accused would receive this fee only if the acquisition went through.”

The DPPs added that during the trial, all of the prosecution’s witnesses testified they were unaware of Chong’s interest in the acquisition. According to court documents, when Chong realised this payment might be discovered, he instructed his secretary to “never mention Paromay to anyone at SOG ever”.

The DPPs had said: “When the accused needed to encash the cheque of $1.5 million into Paromay’s account at BJB and was queried about the source of funds, he lied about the source of funds.”

They added that Chong deceived BJB into thinking “the $1.5 million was (a) ‘shadow equity’ in the business and medical practices of Dr Lim, thereby concealing this was a fee that he had obtained by way of a concealed conflict of interest”.

Chong, who was offered bail of $150,000, intends to appeal against his conviction and sentence.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.


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