Singapore — The scandal surrounding fintech company Wirecard is one of the biggest in recent history, with the company filing for insolvency in 2020 after €1.9 billion (SGD2.9 billion) went missing, and its CEO was terminated and arrested.
Wirecard’s Singapore office was raided by the police in Feb 2019 after several whistleblower articles were published in the Financial Times (FT) containing allegations of accounting malpractices.
The company provided cashless payment services to such clients in Singapore as EZ-Link, Electronic Road Pricing, ComfortDelGro, and Dash. Around the globe, its clientele included Apple, Google, and Samsung.
In recent developments, Mr Suresh Divyanathan, a Dispute Resolution Partner from law firm Oon & Bazul, was able to obtain unusual orders from the High Court for Oversea-Chinese Banking Corporation Limited (OCBC) to disclose certain bank statements.
The statements of Citadelle Corporate Services are to be used for German legal proceedings in connection to the Wirecard scandal.
“Citadelle previously represented to Wirecard that they held millions of Euros in various accounts at Singapore bank OCBC on trust for Wirecard. To determine the truth of those representations, it was crucial for Wirecard’s insolvency administrator to obtain the bank statements of the aforesaid accounts,” reads a statement from Oon & Bazul on Dec 24, 2021.
The statement added that because R Shanmugaratnam, Citadelle’s director, has been charged with allegedly falsifying letters to Wirecard entities, the law firm “took the unusual step of seeking the bank statements from the bank itself, instead of from Citadelle.”
This was no easy process, however, given Singapore’s “well regarded banking secrecy jurisdiction.”
Mr Suresh and his team first needed to apply to the High Court for orders that OCBC discloses the bank statements of Citadelle.
After the bank statements were disclosed, another application needed to be filed for the statements to be used in legal proceedings in Germany to declare Wirecard’s previous financial statements as void.
Normally, the disclosed bank statements could not be used for legal proceedings outside the country, Oon & Bazul added.
The law firm called the disclosure of the bank statements a “milestone” in the investigation of the Wirecard scandal, which has made headlines around the world.
“Due to Singapore’s well-deserved reputation for upholding banking secrecy,” Mr Suresh said that the applications to disclose bank records are “rare and difficult to succeed.”
Oon & Bazul also wrote that “Notably, banks in Singapore are obliged under section 47 of the Banking Act not to disclose, in any way, customer information, and typically, banks in Singapore will not even confirm whether or not a person or entity has a bank account with them.”
However, this does not “denigrate Singapore’s banking secrecy reputation” added Suresh.
It shows instead that “in exceptional circumstances, banks in Singapore can be ordered to reveal customer information to third parties if the interests of justice demand it”.
“Suresh and his team were able to persuade the Singapore High Court that given the circumstances of the Wirecard scandal, it was indeed necessary and just for OCBC to disclose their customer’s bank statements to Oon & Bazul and to allow Wirecard’s insolvency administrator to use the bank statements in the German Court proceedings,” the law firm added. /TISG
Read also: Singapore company director charged over Wirecard scandal