SINGAPORE: Xie Yong, a 37-year-old director of 980 companies, was sentenced to 4 weeks of jail time and fined S$57,000 for multiple charges related to failing in his duties as a director, according to court records on Monday, Dec 18, Channel News Asia reports.

From 2020 to 2021, Xie, also known as Alex, registered himself as the director and corporate secretary for the companies he set up for Chinese clients, fulfilling the statutory requirement for a Singapore-residing director. However, investigations revealed that over US$5 million was laundered through some of these companies.

Two companies, Wei Hui and Joy Trader, became vehicles for money laundering. Apparently dealing with retail, Wei Hui received US$1.5 million through a business impersonation scam, with the funds later transferred out of Singapore.

Joy Trader’s account was used to launder US$7.5 million from email scams involving an American company and a Hong Kong firm.

Xie, aware of the importance of due diligence, claimed he intended to gather information about the companies’ activities at the end of the financial year and take action if any illegal activities were discovered.

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However, Deputy Public Prosecutor Janice See argued that he “turned the proverbial blind eye” and failed to exercise reasonable diligence, resulting in the laundering of illicit funds.

Before May 2020, Xie realized he was blacklisted by local banks and sought other individuals, like Lan Fang, to be directors for the companies he incorporated.

Lan Fang, a 51-year-old Chinese national and Singapore permanent resident, was registered as a director for about 100 companies under her agreement with DD.

Xie ran Tox Technology, later renamed DD Corporate Services, providing accounting and corporate services. In 2019, he expanded the services to include incorporating Singapore companies and attracting Chinese clients after advertising on a Chinese online forum in 2020.

The court heard that Xie charged S$700 for a package, including nominee director services, corporate secretarial services, and a registered company address. For companies needing a bank account, an additional fee between S$100 and S$150 was charged.

Deputy Public Prosecutor Janice See called for four to six weeks’ jail and at least five years’ disqualification from acting as a director, citing Xie’s “total failure to exercise reasonable diligence” and his active steps to prolong his business despite being blacklisted.

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In response, Xie paid the fine in full and has been banned from being a director for five years.

As reported by The Edge Singapore earlier this year, Singaporean authorities seized over $2.8 billion in assets, marking the most significant money laundering case in history. Xie’s case, however, is unrelated to this substantial seizure.

Singapore has been actively addressing the loophole effects that facilitated the establishment of businesses by those implicated in the money laundering scandal.

According to the country’s laws, foreigners intending to set up a company must employ a citizen or permanent resident as an authorized representative. Exploiting this requirement, some locals have taken on the role of serial directors, representing hundreds of firms concurrently.

Authorities said that the absence of restrictions on the number of directorships aligns with international standards, asserting that 99% of directors hold fewer than 10 positions.

Nonetheless, there is a growing consideration for imposing limits, with proposed rule changes expected to be presented in parliament next year./TISG