Jail, fine for S’pore director of 980 firms for failing to fulfil directorship duties
A Singaporean who ran a business offering corporate services to clients mostly from China became the director of 980 companies.
On Dec 18, Xie Yong, 37, was sentenced to four weeks’ jail and fined $57,000 after he admitted to failing to exercise reasonable diligence in the proper discharge of his duties with two firms.
He pleaded guilty to a total of 18 charges under the Companies Act.
Deputy Public Prosecutor Janice See said Xie holds a master’s degree in professional accountancy from University College London in Singapore.
In 2013, he incorporated a company, Tox Technology, which he later renamed DD Corporate Services.
Xie was the director of the company. It started offering accounting and corporate services in 2019, including the incorporation of companies in Singapore.
“The accused was familiar with the duties of a director of a Singapore incorporated company, including the need to exercise reasonable diligence in the discharge of his duties as a director,” said DPP See.
Initially, DD’s clients were local companies, but Xie decided in 2020 to expand his reach to China and advertised his company’s corporate secretarial services on a Chinese online forum.
Following that, multiple Chinese agents contacted DD requesting the company’s services.
The clients were registered as directors and shareholders, with their firms using DD’s business address.
Apart from a simple online search to see if the clients were linked to criminal investigations, and checks on a Chinese website to see if their passports were valid, Xie took his agents’ words at face value.
He later admitted that he was not aware if his agents did any independent checks on the clients they referred.
Some time before May 2020, Xie became aware that he had been blacklisted by local banks in Singapore when it came to opening bank accounts for his clients.
He noticed that if he was listed as a director of a company he incorporated, the banks would reject the application to open a bank account.
He did not know why he was blacklisted and did not find out, but instead decided to get other people to stand as director for the companies he had incorporated for his clients.
Xie got to know a 51-year-old Chinese national and Singapore permanent resident named Lan Fang, and asked her to act as a “nominee director” for companies DD had set up for its clients, offering her $50 per post.
A company called Aurora Free Trading set up with Lan as nominee director was used to launder money from a scam targeting an Australian company and a 48-year-old Singaporean woman.
Investigations revealed that, as at January 2021, Xie was a director of 980 companies in Singapore, of which 831 were active and current appointments.
Lan was registered as a director of about 100 companies.
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