A law firm in Singapore has come under the spotlight after millions of dollars it was holding for a client have gone missing along with one of its managing partners.

S$33 million missing

Engineering firm Allied Technologies said on May 23, 2019 that it will be making a police report.

This was after S$33.15 million from its escrow account with law firm JLC Advisors was paid out under an alleged "unauthorised" instruction by its managing partner Jeffrey Ong, reported Business Times.

Escrow accounts are used by solicitors to safe-keep funds for buyers during a transaction.

According to BT, Allied Technologies placed the S$33.15 million in escrow with JLC for the purpose of business expansion through acquisitions, joint ventures, and collaborations.

Allied Technologies had been requesting for the S$33.15 million to be returned since March 23, 2019, but Ong repeatedly assured the company that the release of the funds will be forthcoming, BT reported.

The last email by Ong to Allied Technologies promised to return the money by May 17, 2019.

However, when that did not materialise, Allied Technologies sent a letter of demand via law firm Rajah and Tann.

The letter issued an ultimatum to release the funds by 4pm on May 22, 2019.

Allied Technologies later learned, on May 22, the very same day that it terminated a planned acquisition of Air Chuan Construction, that the funds had been paid out.

"Several payouts to different persons and entities"

JLC subsequently clarified with BT that "several payouts to different persons and entities" were made from the escrow account, but none of them were made to Ong's account or entity that was associated with him.

BT added that any disbursement of money from the escrow account must be jointly signed by Allied Technologies' executive director and independent director.

However, both confirmed that they did not give out any instructions to release the money.

There is no further clarification on who the money was paid to.

Allied Technologies has requested for JLC to produce documents showing the movement of the funds and provide updates on Ong's whereabouts.

Ong missing

BT reported that Ong is currently uncontactable and has not been at work for a week.

Ong has also resigned suddenly as an independent director and acting non-executive chairman of Annica Holdings, citing personal reasons, according to Today.

SGX RegCo, the regulatory arm of the Singapore Exchange (SGX), has said that it will object to any future appointments of Ong as a director or executive officer of any listed companies in Singapore, reported Today.

SGX has also instructed Allied Technologies to appoint a special auditor to investigate the events that led to the missing funds. This auditor will report directly to SGX.

Meanwhile, Allied Technologies' escrow account with JLC has been taken over by the Law Society.

Top image via JLC Advisors.

[Edit: An earlier version of this article incorrectly stated that the joint authorisation to disburse funds from this escrow account is part of conveyance rules.]