A 39-year-old woman will be charged for failing to use reasonable diligence in the discharge of her duties as a director of a Singapore-registered company, which is an offence under Section 157(1) punishable under Section 157(3)(b) of the Companies Act (Chapter 50, 2006 Revised Edition). A 55-year-old man will be charged for abetting the woman by instigation to commit the offence.

Investigations revealed that sometime in January 2020, the man purportedly introduced the woman to incorporate a company as its sole director and sole shareholder. In return, the woman would be paid SGD 400 every month for being the nominee director. The company, Royal Rainbow SG Pte Ltd, was incorporated on 29 January 2020 with the principal activity of wholesale trade of a variety of goods without a dominant product. Consequently, two local bank accounts were opened in the name of the company. The woman is alleged to have relinquished control of the bank accounts and she took no part in the running of the company.

Funds totalling SGD 35,100 that were derived from a tech support scam case were transferred into one of the company’s bank accounts.

The two individuals will be charged in court on 19 August 2022. The offence of failing to use reasonable diligence in the discharge of duties as a director under Section 157(1) punishable under Section 157(3)(b) of the Companies Act, carries a punishment of an imprisonment term of up to 12 months or a fine of up to $5,000. A person who is convicted of abetting the offence is liable for the same punishment.

The Police would like to advise members of the public to exercise caution before agreeing to be appointed as directors for companies and ensure that they are able to use reasonable diligence in the discharge of their duties, if appointed. Should a director exercise inadequate supervision over the company’s affairs, there are risks that the company may be used to facilitate criminal activities, such as the laundering of criminal proceeds.

Source: Singapore Police Force