The director and compliance manager of remittance firm Samlit Moneychanger, which had about 430 police reports filed against it for frozen remittances to China, are under investigation.
According to a press release by the Singapore Police Force (SPF), they are being investigated for their alleged involvement in carrying on a business for a fraudulent purpose and purported failure to comply with various obligations as a licensed payment services provider.
The Monetary Authority of Singapore (MAS) commenced an investigation into Samlit Moneychanger following reports that beneficiaries in China of remittance transactions made through the firm in Singapore were unable to access the remitted money as it had been frozen or confiscated by mainland Chinese authorities.
Samlit has not been forthcoming, decided to surrender its licence
The police pointed out that Samlit has not been forthcoming in providing the information required by MAS, and has not satisfactorily explained the purported remittance fund flows.
In addition, while MAS’ inspection was ongoing, Samlit notified MAS on Feb. 20, 2024, of its intention to surrender its payment services licence and discontinue its business.
Reports were also received about unusual transfer activities in Samlit’s corporate bank accounts and its director’s personal bank account.
In light of the new information received, a joint investigation into Samlit was launched by the police and MAS for suspected fraudulent trading under the Insolvency, Restructuring and Dissolution Act 2018.
Samlit was also investigated for its suspected failure to comply with various obligations as a licensed payment services provider under the Financial Services and Markets Act 2022 and the Payment Services Act 2019.
MAS has also taken steps to secure the funds in Samlit’s corporate bank accounts, which includes directing the remittance firm to seek approval for any fund withdrawals and transfers.
According to the police, this action is necessary, given the circumstances surrounding Samlit’s sudden surrender of licence.
The secured funds are sufficient to meet Samlit’s uncompleted remittance obligations, they added.
MAS regrets Samlit has not chosen a "more responsible" course of action
MAS also said it regrets Samlit's decision to surrender its licence instead of taking a "more responsible" course of action.
The police said Samlit remains a licensee under the Payment Services Act 2019 until Feb. 29, 2024.
In the meantime, MAS has directed Samlit to ensure that beneficiaries of uncompleted remittance transactions receive the funds within seven business days, even after the surrender of its licence.
If the funds are not received by a beneficiary within seven business days, Samlit is required to contact the remitter immediately for further instructions.
Samlit is also required to properly discharge all outstanding obligations, which includes making adequate provisions for unforeseen liabilities, before it winds down.
Affected remitters should seek redress within Singapore's legal framework
The police further wrote that the ongoing investigations are separate from any potential private claims by remitters against Samlit and do not affect such claims.
MAS has also directed Samlit to continue to provide relevant documentation to affected remitters to facilitate their appeal to law enforcement agencies in China regarding the unfreezing of their beneficiaries’ accounts, even after the surrender of its licence.
Adding that the authorities understood the frustrations faced by the affected remitters, the police urged the affected remitters to seek redress within the legal framework of Singapore.
The press release added, "The police will not hesitate to take enforcement action against anyone who breaks the law in Singapore, including the organisation of or participation in a public assembly without a police permit."
The government will also be reaching out to affected remitters over the weekend from Feb. 24 to Feb. 25 to share more information with them.
The offence of fraudulent trading carries a fine of up to S$15,000, an imprisonment term of up to seven years, or both.
As for offences under the Financial Services and Markets Act 2022 and the Payment Services Act 2019, penalties range from a fine of up to S$12,500 to S$1 million (with further fines for continuing offences, if applicable), imprisonment for a term of up to 12 months, or both.
Top photo via Samlit Remittance and Money Changer/Facebook