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SINGAPORE: Former Singapore Prime Minister Goh Chok Tong’s son Goh Jin Hian is being called a “nepo baby” in online forums after the High Court ruled that he is liable to pay US$146 million (S$196 million) plus interest for losses suffered by the now-insolvent marine fuel supplier Inter-Pacific Petroleum (IPP).

Justice Aedit Abdullah’s comprehensive 170-page judgment outlines the gravity of Goh’s negligence as IPP director, particularly his lack of awareness regarding IPP’s cargo trading business, which the court identified as a “vehicle of fraud” leading to disastrous consequences for the company. Goh served on IPP’s board from June 28, 2011, until August 2019.

In his ruling, Justice Abdullah emphasized the extent of Goh’s carelessness, noting, “The mere fact that Dr Goh had not been a perpetrator of the fraud did not mean that he was not responsible for its disastrous consequences on IPP.” He further criticized Goh’s misfeasance and nonfeasance, stating that it was his failure to be aware of the cargo trading business that allowed fraudsters to exploit the company.

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The court’s decision follows an appeal by Goh against a February ruling that held him liable for breaches of director’s duties and statutory duties. Deloitte & Touche, acting as IPP’s judicial managers and later liquidators, sued Goh to recover the substantial losses, accusing him of gross negligence during his directorship.

According to the liquidators, the fraudulent activities involved significant trade financing from IPP’s two largest creditors, Malayan Banking (Maybank) and the Singapore branch of Societe Generale (SocGen). They argued that Goh failed to address numerous red flags and missed critical opportunities to investigate the company’s financial irregularities.

The court found Goh negligent for not investigating US$132 million in receivables purportedly owed to IPP by Mercuria Energy Trading. These invoices, issued between September 2017 and early 2018, were for bogus transactions, and Goh’s failure to verify them allowed further fraudulent drawdowns.

Additionally, Justice Abdullah rejected Goh’s defense that the company’s business structure absolved him from needing to scrutinize its financials. The judge asserted, “A director’s duty to make inquiries… is intended to ensure that the director is sufficiently on top of the company’s affairs to prevent the company from entering into a crisis in the first place.”

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The court also dismissed Goh’s claim that he had transitioned to a non-executive role from July 2015, finding evidence of his continued active involvement in IPP’s management post-transition.

Beyond the current ruling, Goh faces further legal challenges. In September 2023, he and three others were charged with 132 counts related to false trading offences. Goh alone is facing 39 charges under the Securities and Futures Act for allegedly manipulating the share price of New Silkroutes, a healthcare and energy firm, during various periods in 2018.

Aside from being called a “nepo baby,” Goh has drawn criticism for being “blur” in his capacity as IPP director. Singaporeans responding to the latest High Court ruling online expressed surprise that he continued collecting salaries or board fees but “genuinely thought he had no responsibilities or accountability.”

TISG/