Nickel-trading fraud: 947 invested $1.46b into scheme that was ‘fiction’

Prosecutors on Nov 27 set out their case against nickel trading businessman Ng Yu Zhi, accusing him of masterminding a scheme which saw 947 people invest a total of $1.46 billion in a 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 and Envy Global Trading, after he falsely claimed that his firms could purchase nickel from an Australian mine at a discount and sell the metal for a sizeable profit.

In reality, no nickel was actually purchased or sold by the Envy companies. The Envy 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 fraudulent scheme, saying Ng used the invested funds to finance his lavish lifestyle.

It was previously reported that he paid over $20 million for four properties, and spent close to $5 million on artworks.

He also bought expensive jewellery and cars, including a Pagani Huayra Coupe, Porsche 911 GT3, Rolls Royce Phantom, a 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 a 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 Envy Asset Management (EAM) between February 2016 and March 2020 and through Envy Global Trading (EGT) from April 2020 to March 2021.

The prosecutor said Ng forged distribution agreements between the Envy companies and Australian mining company Poseidon Nickel Limited, 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 of two of the proceeded cheating charges.

Envysion was allegedly cheated into delivering $47.3 million to Envy Global Trading on no less than 17 occasions between September 2020 and January 2021.

Shim was allegedly cheated into delivering $955,115.08 to Envy Global Trading on no less 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, Ng made the commitment to buy nickel every month to get the discount.

To get better cashflow, he eventually offered these opportunities to other investors, she said.

Shim said she subsequently learnt that Envy Asset Management was placed on the Monetary Authority of Singapore’s investor alert list in March 2020.

She said on checking with her chief compliance officer, the only explanation she got was that Envy Asset Management, which was not licensed by MAS, may have been seen as doing 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.

Shim, along with Doo Chun Ki and Tan Kay Siong - two former directors of the fund management company Envysion Wealth Management - have been charged with various offences under the Securities and Futures Act and the Securities and Futures (Licensing and Conduct of Business) Regulations.

The charges were for failing to put in place an appropriate risk management framework for management of funds and failing to mitigate conflicts of interest related to loans and referral fees received by the company and its CEO through the fund.

Envysion was manager of the Envysion Global Investments VCC, which established the Envysion Commodity Strategy Fund. The fund was invested in Envy Global Trading.

The trial continues.