SINGAPORE – The director of a corporate service provider firm was fined $6,500 on April 1 after she registered three companies here in the name of a local resident without getting the person’s consent.
Li Baozhu, 40, the sole director of Corp Nergy, had wrongly declared to the Accounting and Corporate Regulatory Authority (Acra) that the local resident had consented to be a director of these three companies when she registered them.
Under the Companies Act, all Singapore-registered companies must have at least one local resident director.
She was convicted on two charges of failing to exercise reasonable diligence in the discharge of her duties. Another similar charge was taken into consideration for sentencing.
In a statement on April 5, Acra said its investigations found that Li had relied on a third party to obtain the consent of the person. But Li did not take any steps to ascertain that this person had indeed consented.
Acra had earlier cancelled Li’s registration as a registered qualified individual (RQI) and Corp Nergy’s registration as a registered filing agent (RFA) on Oct 11, 2023.
RQIs and RFAs provide corporate secretariat services for business entities, such as helping customers to incorporate companies and file annual returns.
With the registrations as RQI and RFA cancelled, Li cannot operate as a corporate service provider.
Corporate service providers here have come under increased scrutiny following a report by The Straits Times that found a Bedok resident was behind 185 companies, including nine that were linked to Singapore’s largest money laundering case.
Wang Junjie, who was the director and RQI of LW Business Consultancy, had his registration as a qualified individual cancelled by Acra in January.
In February, Acra also sanctioned Jackson Lim Wei, who was a director and RQI of Sprout Corporate Services. Lim had also been linked to companies involved in the money laundering probe.
There are close to 3,000 firms providing corporate services here.
At least five RQIs and four RFAs, including Wang and Lim and their firms, have been sanctioned since news of the money laundering case broke in August 2023.
The case saw 10 people arrested, including two who were convicted and jailed in April.
In response to questions about the case in Parliament in October 2023, Second Minister for Finance Indranee Rajah said that an inter-ministerial committee would be set up to review Singapore’s financial system and strengthen its anti-money laundering regime.
The Ministry of Finance and Acra have said they are proposing new laws to tighten scrutiny on corporate service providers.
In November 2023, two nominee directors were jailed after their firms inadvertently helped scammers launder almost $20 million.
In March, ST reported that a Singaporean man filed a police report after alleging that his personal details had been used without his consent to register four companies, including a cryptocurrency investment firm believed to be in debt to investors.
Acra said it takes a serious view of the misuse of identities for the appointment of directors.
It said: “Corporate service providers who breach their obligations, whether negligently or otherwise, may face regulatory sanctions which include having their registrations cancelled. Directors of corporate service providers may also be prosecuted for failing to exercise reasonable diligence.”
For failing to exercise reasonable diligence in the discharge of her duties under the Companies Act, Li could have been fined up to $5,000 or jailed for up to 12 months over each offence.
