SPF: 2 women jailed for using 69-year-old woman as director of 108 companies linked to scam funds

SINGAPORE: Two women from a Singapore corporate service provider have been sentenced to imprisonment after recruiting a 69-year-old Singaporean woman as a nominee director for 108 companies, keeping her entirely uninformed about the businesses she was supposedly overseeing. Two of which received approximately US$540,000 (S$690,000) in funds from business email compromise scams.

Chen Lu, director of Union International Consultancy Pte Ltd, was sentenced to three months and three weeks’ imprisonment on Sep 10, 2026. Li Xuan, a UIC employee, was sentenced to two months’ imprisonment on Sep 21, 2026. Both were convicted of one count of abetting a nominee director to contravene Section 157(1) of the Companies Act and were disqualified from acting as directors for five years.

How the scheme worked

Between August and October 2020, Chen and Li recruited Li’s mother-in-law, who was 69 years old then, as a nominee director to satisfy Singapore’s regulatory requirement for locally resident directors in companies incorporated for foreign clients. UIC incorporated 108 companies in Singapore for clients primarily from the People’s Republic of China that year.

Under the arrangement between Chen and Li, the nominee director was not told when the companies were incorporated, was given no information about the clients or their businesses, and was provided no means to contact the foreign directors. Chen and Li knew this would cause her to breach her director’s duty to supervise the companies she had been appointed to oversee, and intentionally aided and abetted that breach.

Two of the 108 companies incorporated through this scheme received approximately US$540,000 in fraudulent funds from victims of business email compromise scams, in which criminals impersonate company executives to authorise wire transfers into fraudulent accounts.

Additionally, Chen conspired with Li to pervert the course of justice by attempting to influence the nominee director to falsely claim knowledge of the companies’ affairs. This was also taken into consideration for sentencing.

A warning to the industry

Corporate service providers (CSP) and their employees serve an important function in Singapore’s corporate ecosystem. The Police said they take a serious view of errant CSPs and will not hesitate to act against offenders.

The case also carries a warning for individuals who agree to serve as nominee directors: those who have limited or no oversight or control of the companies they are appointed to risk allowing those companies to be used to facilitate the retention of criminal proceeds, with personal legal exposure as a result.

Directors who fail to exercise reasonable diligence in the discharge of their duties run the risk of criminal liability regardless of whether they were aware of the underlying misconduct.