The former chief financial officer of Singapore-based commodity firm, Agritrade International (Agritrade), was sentenced to 20 years' in prison, according to a press release by the Singapore Police Force.
On Dec. 9, 2022, Lulu Lim Beng Kim, 63, was convicted of 11 charges of cheating and one count of falsification of accounts.
Deceived 16 financial institutions
She had deceived 16 financial institutions into believing that the consolidated financial statements for Agritrade and its subsidiary companies, for the financial years ending on June 30 in 2016, 2017 and 2018, had been audited.
This resulted in the institutions granting at least US$586.5 million (S$773.1 million) in credit facilities to Agritrade between January 2017 and November 2019.
The firm defaulted on these loans and the total loss suffered by the financial institutions amounted to around US$469.1 million (S$619.1 million).
From January 2020 to August 2020, the police received multiple reports lodged by various banks and finance companies that had extended credit facilities to Agritrade for the purposes of trade financing.
Court documents showed that institutions defrauded included foreign banks such as the State Bank of India, Malayan Banking Berhad (Maybank), South Korean bank Shinhan Bank, German bank Commerzbank AG, and Chinese bank Shanghai Pudong Development Bank.
Today further reported that she is the first person to be sentenced in relation to the case.
How fraud was carried out
Investigations revealed that from 2016 to 2018, Lim had contacted or attempted to contact a director of an auditing and accounting firm to prepare draft consolidated financial statements for Agritrade and its subsidiaries, using Agritrade's management accounts which she provided.
In addition, from January 2017 to November 2019, Lim had either instructed or permitted her subordinates in Agritrade forward documents that she had disseminated to them, including the falsified financial statements, to banks and finance companies.
In one instance, she also instructed her subordinate to insert a copy of the auditor's signature into a document that falsely purported to be the audited consolidated financial statements of the firm for the financial year ending on Jun. 30 in 2018.
Money from credit facilities transferred to Agritrade's "suppliers"
As for the credit facilities, the majority of the money drawn was transferred to three companies and their subsidiaries, purported to be legitimate suppliers of commodities traded by Agritrade.
However, these entities were connected to Agritrade in a material fashion.
Members of Agritrade's senior management, including Lim herself, had either assisted in the incorporation of these three “suppliers” and their subsidiaries, or had been employed by the firms as directors.
Various document templates and letterheads, as well as signature blocks and chops bearing the particulars of these three “suppliers”, were also discovered within Agritrade's premises.
Left Singapore shortly after investigations commenced against her
The police further noted that Lim left Singapore shortly after the commencement of investigations and an Interpol Red Notice was issued against her.
The police made extensive efforts to locate her with the assistance of multiple foreign counterparts and she was subsequently located and arrested in the United Arab Emirates (UAE).
She arrived in Singapore in September 2021 via a flight arranged by the UAE authorities and was placed under arrest.
Why did she commit fraud?
District Judge Kow Keng Siong acknowledged the reasons set out within Lim's mitigation plea, put forth by her lawyer Noor Marican from Marican & Associates, on why she committed the fraud, Today further reported.
The first reason was pressure from her long-time superior, the founder of Agritrade, Ng Say Pek, to commit the offences.
Lim's lawyer added that he had "significant control and influence" over her.
The other reason was Lim's belief that Ng would be able to repay the financial institutions.
In addition, she had also committed the offences on the basis of keeping the firm afloat and retaining its staff.
Kow was quoted by Today as saying that while these reasons are relevant to ensuring proportionality and parity for sentencing, the prosecution had also highlighted, "rightly", that Lim had 30 years of working experience.
She would have known from the outset that what she had been tasked to do was illegal, and could therefore have refused to do so and leave the company if need be, the judge added.
The judge also highlighted that while Lim herself did not receive any of the money, her actions allowed the company to stay afloat, thereby ensuring that she was able to continue drawing her monthly salary of S$32,000 a month.
Bloomberg further reported that investigations against Agritrade's Chief Executive Officer, Ng Xinwei, as well as his father, Ng Say Pek, are ongoing.
Under the Singapore Penal Code, a charge of cheating carries a penalty of up to three years' imprisonment or a fine, or both.
As for falsifying accounts, this involves a penalty of up to ten years' imprisonment or a fine, or both.
Top photo via Unsplash