Tropical Forestry Venture Investment Scam
My heart goes out to the many investors who put in their savings and hard earned money into the scam. In short, investors put in money into a Tropical Forestry Venture(S) Pte Ltd to invest in valuable tree saplings. Turns out to be a scam. The people behind the company disappeared with the cash. But what can be done for these investors to seek justice?
It is very unfortunate that such wide-scale financial scams appear to be increasing in Singapore. As a lawyer in private practice doing litigation among other areas, anecdotally, I know of another such scam where many investors lost a total of many million dollars.
I wonder if the defrauded investors are aware that even though they have made police reports and the CAD/Police may pursue the matter, they will likely not be able to be recompensed or get back any cent unless they have commenced civil legal proceedings.
There are actually plausible legal recourses for the investors to be recompensed. Under the Companies Act, they can apply as creditors for the winding up of the company, being insolvent since it cannot pay their debts. After a liquidator is appointed to wind up the company, i.e. Tropical Forestry Venture(S) Pte Ltd, the investors as the company’s creditors or the liquidator can then apply to declare that any person who was carrying on the business of the company with an intent to defraud creditors or for any fraudulent purpose be held personally responsible for all or any of the debts or other liabilities of the company. This means that the former directors of the company who defrauded the investors can be held personally liable to pay these investors back. This is under section 340 of the Act. Most likely these fraudster directors had taken their money and so would be the appropriate party to be held liable. Further, such conduct by the fraudster would be a criminal offence under the Companies Act as well, with a maximum sentence of $15,000 fine and/or imprisonment of 7 years.
There are also other Court powers under the Companies Act which the liquidators can apply to be exercised. For instance, section 286 of the Act allows the liquidator to make a report stating his opinion that some fraud has been committed, upon which the Court can direct that any person or officer in connection with the company can be publicly examined. Under section 287 of the Act, the Court can also order for the arrest of an absconding director if there is proof of probable cause for believing that the contributory is about to leave Singapore.
It’s also important to consider applying for a Mareva injunction or asset freezing order against the fraudster directors of the company. It’s likely they will try to dissipate the money they took from the victims. A court freezing order is meant to preserve the defendant’s assets pending the court determining the substantive merits of the plaintiff’s claim.
I hope these victims will be able to obtain some justice and successfully claim back some of their hard-earned money and savings.
Ronald JJ Wong.
I’m a Singapore lawyer with commercial litigation, international arbitration and corporate business advice practices. I try to promote access to justice by volunteering pro bono. I also write on the law; some of my articles are published in academic journals.
This was was sent to us last week from a Singapore Lawyer. After we checked the validity of its contents we published it.