Cars, art, property: Ng Yu Zhi allegedly lived lavishly on gains from $1.46b nickel trading scam
Source: Straits Times
Article Date: 28 Nov 2024
Author: Selina Lum
More than $481m channelled to his personal bank accounts, says prosecutor.
Prosecutors on Nov 27 set out their case against businessman Ng Yu Zhi, accusing him of masterminding a scheme that had 947 invest a total of $1.46 billion in a nickel trading venture that was little more than fiction.
Deputy Public Prosecutor Gordon Oh told the High Court that the investors were convinced to invest in Ng’s companies, Envy Asset Management (EAM) and Envy Global Trading (EGT), after he falsely claimed that his firms could buy nickel from an Australian mine at a discount and sell the metal for a sizeable profit.
In reality, no nickel was purchased or sold by the Envy companies. The companies paid earlier investors with the funds put in by other investors.
Out of the $1.46 billion paid to his two companies, more than $481 million was channelled to Ng’s personal bank accounts, said the prosecutor.
DPP Oh added that the 37-year-old reaped “tremendous” criminal benefits from the scheme, saying Ng used the invested funds to finance his lavish lifestyle.
Ng is said to have paid more than $20 million for four properties and close to $5 million on artworks using misappropriated funds. He also bought expensive jewellery and cars, including a Pagani Huayra Coupe, Porsche 911 GT3, Rolls-Royce Phantom, Lamborghini Aventador SV J, and an Aston Martin Rapide.
In order to spin a convincing tale, Ng lent credibility to this fraud by forging several key documents, said the prosecutor.
“The prosecution will show that this pretty picture of a profitable physical nickel trading business was but pure fiction,” said DPP Oh.
Ng faces a total of 108 charges, for offences including cheating, forgery, criminal breach of trust, money laundering and fraudulent trading.
The prosecution is proceeding on 42 of these charges in the current trial. The remaining charges have been stood down for now.
In his opening statement, DPP Oh said Ng had offered the scheme through EAM between February 2016 and March 2020, and through EGT from April 2020 to March 2021.
At the end of three-month contracts, investors could withdraw all or part of their investment and returns, or reinvest by “rolling over” their monies into a new investment.
The prosecutor said Ng forged distribution agreements between the Envy companies and Australian mining company Poseidon Nickel, which he showed to sales representatives and certain investors to convince them that his business model was sound.
Ng also forged forward contracts with international bank BNP Paribas for the purported sale of physical nickel, the prosecutor told the court.
The first witness to take the stand was Shim Wai Han, the former chief executive of Envysion Wealth Management.
Envysion and Shim are named as victims for two of the cheating charges.
Envysion was allegedly cheated into delivering $47.4 million to EGT on no less than 17 occasions between September 2020 and January 2021.
Shim was allegedly cheated into delivering $955,115.08 to EGT on no fewer than four occasions between November 2020 and January 2021.
Shim, a private banker for 20 years and certified financial planner, testified that she met Ng in 2018 at his office in Oxley Tower.
She said Ng told her that he had come across opportunities in 2016 while working as an auditor in KPMG, which purportedly had Australian mining company BHP Billiton as a client.
Shim said Ng told her that BHP had cancelled an agreement with Poseidon because of the plunge in the price of nickel at the time, leaving Poseidon with a stockpile.
She said Ng told her that he bought nickel from Poseidon at a discount and initially traded the metal on his own, and when nickel prices stabilised, he committed to buying nickel every month to get the discount.
To get better cash flow, he eventually offered these opportunities to other investors, she said.
Shim said she subsequently learnt that EAM was placed on the Monetary Authority of Singapore’s (MAS) investor alert list in March 2020.
She said that on checking with her chief compliance officer, the only explanation she got was that EAM, which was not licensed by MAS, may have been seen as carrying out activities that required a licence.
She said she saw a legal opinion that Ng supposedly got from a regulatory lawyer, which stated that a licence was not required when dealing with accredited investors.
When DPP Oh asked Shim what convinced her that the deals were genuine, she replied that she had seen multiple documents, and that she and her team had done due diligence by checking with commodity experts on the viability of such discounts.
These checks convinced her that Ng’s opportunities were “not something that’s too good to be true”, she said.
Shim, along with Doo Chun Ki and Tan Kay Siong – two former directors of fund management company Envysion Wealth Management – had been earlier charged with two counts each under the Securities and Futures Act and the Securities and Futures (Licensing and Conduct of Business) Regulations.
Envysion was manager of the Envysion Global Investments VCC, which established the Envysion Commodity Strategy Fund. The fund was invested in EGT.
These charges were for failing to put in place an appropriate risk management framework for the fund and failing to mitigate conflicts of interest related to loans and referral fees given to the company by Ng and EGT.
Shim also faces a charge under the Financial Advisers Act for making false statements and two charges under the Official Secrets Act for forwarding e-mail correspondence from MAS to Ng.
The trial continues.
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