The Securities Litigation Review: Singapore


i Sources of law

The primary source of securities law in Singapore is the Securities and Futures Act (SFA). It is supported by a network of other statutes, regulations and guiding instruments. Case law precedents provide authoritative guidance for the interpretation and application of these legislative rules.

A list of the key sources is set out below.

Statutes (primary legislation)

  1. Securities and Futures Act (Cap 289, Rev Ed 2006).
  2. Companies Act (Cap 50, Rev Ed 2006).
  3. Financial Advisers Act (Cap 110, Rev Ed 2007) (FAA).
  4. Banking Act (Cap 19, Rev Ed 2008).
  5. Insurance Act (Cap 142, Rev Ed 2002).
  6. Business Trusts Act (Cap 31A, Rev Ed 2005).

Regulations (subsidiary legislation)

  1. Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2018.
  2. Securities and Futures (Organised Markets) Regulations 2018.
  3. Securities and Futures (Licensing and Conduct of Business) Regulations (Rev Ed 2004).
  4. Securities and Futures (Trade Repositories) Regulations 2013.
  5. Financial Advisers Regulations (Rev Ed 2004).
  6. Companies Regulations (Rev Ed 1990).

Other instruments

The Monetary Authority of Singapore (MAS) issues directions, codes and guidelines, and practice statements and notes, as follows:

  1. written directions issued by the MAS: these directions have the force of law, a breach of which may constitute a criminal offence;
  2. MAS Codes & Guidelines (e.g., the Singapore Code on Take-overs and Mergers, and the Code on Collective Investment Schemes): these are non-statutory instruments that provide guiding standards that market participants should adhere to;
  3. no-action letters: while useful as guidance, these letters do not have the force of law as they do not bind the MAS or the Public Prosecutor from instituting proceedings subsequently; and
  4. policy statements and practice notes: when a market participant presents certain facts to the MAS for its opinion, the MAS may issue a no-action letter to state that it does not intend to institute proceedings against the market participant on the basis of those facts. The MAS may subsequently issue a policy statement or practice note to inform all market participants on the practice it has adopted.

The Singapore Exchange (SGX) has issued the following rules:

  1. The SGX-ST Mainboard Listing Manual.
  2. The SGX-ST Catalist Listing Manual.
  3. The SGX-ST Rules.
  4. The SGX-DC Clearing Rules.
  5. The Futures Trading Rules.

ii Regulatory authorities

Civil authorities

The MAS is the primary regulator of the banking, insurance and securities industries. It also performs the functions of the central bank of Singapore.

The SGX is the front-line regulator for all listed companies and trading activities on the exchange.

In relation to mergers and acquisitions, the Securities Industry Council is responsible for administering and enforcing the Singapore Code of Take-Overs and Mergers.

Criminal authorities

The Commercial Affairs Department of the Singapore Police Force is primarily responsible for the investigation and prevention of financial and other white-collar crimes.

The Financial and Technology Crime Division of the Attorney-General's Chambers is primarily responsible for the prosecution of financial and other white-collar crimes.

iii Common securities claims

Securities claims in Singapore generally take the form of common law claims or statutory claims under the SFA.

Common law claims can be based on various grounds, including (but not limited to) breach of contract, misrepresentation, negligence and breach of fiduciary duties.

The statutory claims are primarily found in Part XII of the SFA. They include:

  1. insider trading;
  2. false trading;
  3. market manipulation;
  4. market rigging;
  5. dissemination of false or misleading statements and information;
  6. employment of manipulative and deceptive devices;
  7. failure to provide continuous disclosure of material information;
  8. fraudulently inducing persons to deal in capital markets products; and
  9. dissemination of information about illegal transactions.

A breach of any of the above can attract both civil and criminal consequences.

Many of these securities claims overlap – it is common for the same factual matrix to give rise to multiple securities claims. For instance, the prosecution for insider trading is typically accompanied by a prosecution for the failure to provide continuous disclosure of material information.

The SFA provides for a concept of 'attributed liability' – if an officer or a corporation is found to have committed one of the relevant statutory offences with the consent or connivance of the corporation and for the corporation's benefit, the corporation will be guilty of that offence as if it had committed that offence itself.

The SFA also provides that if an offence under the SFA is found to have been committed by a corporation with the consent or connivance of, or to be attributable to any neglect on the part of an officer, both the officer and the corporation would be guilty of that offence.

Additionally, the general principles of criminal accessory liability (i.e., conspiracy or abetment, or both) apply – broadly speaking, it would have to be shown that the person had a sufficient degree of knowledge that the offence would be committed.

Private enforcement

i Forms of action

Nature of proceedings

Private actions can be commenced by writ of summons or originating summons. The latter is generally limited to proceedings that only concern questions of law and do not involve substantial disputes of fact.

Availability of class action suits

Singapore law does not recognise class action lawsuits in the sense that is traditionally understood in the United States. However, it does allow a single person to commence a proceeding on behalf of various persons who have the same interest. This process is referred to as 'representative proceedings'. Separately, multiple suits that pertain to the same transaction or involve common questions of fact or law can also be consolidated into a single suit.

Shareholder derivative action

A shareholder derivative action can be commenced either as a statutory derivative action under the Companies Act or as a common law derivative action. It is generally easier to commence a statutory derivative action, as the threshold requirements are less onerous. However, statutory derivative actions may only be commenced by companies incorporated in Singapore – there is no such restriction for common law derivative actions.

ii Procedure

Court system

The general rules relating to the jurisdiction of the Singapore courts apply to securities claims. Where the quantum of a claim exceeds S$250,000, it will be heard in the first instance in the General Division of the High Court. Where it does not, it can be heard in the State Courts.

If the case is transnational in nature, it may be heard in the Singapore International Commercial Court (SICC) if certain requirements are met. The SICC is part of the General Division of the High Court.

There is a specialist list of judges who will generally hear securities and financial matters.

Civil appeals from the State Courts are heard by the General Division of the High Court. Civil appeals from the General Division of the High Court will generally be heard by the Appellate Division, save for specified categories of cases (including cases relating to the law of arbitration, insolvency and restructuring cases, and SICC decisions) that will be heard by the Court of Appeal, which is the apex court in Singapore. Parties are generally only allowed one tier of appeal as of right. Any further appeal against the decision of the Appellate Division may be brought to the Court of Appeal only with leave of the Court of Appeal.

Civil procedure rules

The civil procedure rules relating to service, pleadings, discovery, pre-trial procedures, conduct of trials, and appeals are the same as in any other private law action. These can be found in the Supreme Court of Judicature Act, the State Courts Act, the Rules of Court and the Practice Directions of the respective courts.

A public consultation exercise on major reforms to Singapore's civil procedure regime was completed in 2019. It remains to be seen what legislative amendments will be introduced and how they will impact securities litigation in Singapore.

Financial Industry Disputes Resolution Centre

Apart from securities litigation in the courts, it is common for financial services disputes to be resolved by alternative dispute resolution (ADR) in the Financial Industry Disputes Resolution Centre (FIDReC).

FIDReC is an independent institution set up to provide ADR services for financial disputes in Singapore. Access to FIDReC is available to retail investors with a claim against financial institutions, limited to S$100,000 per claim (unless agreed otherwise).

When a dispute is referred to FIDReC, it will first direct parties to resolve their dispute by mediation. If mediation fails, the case will be heard by way of adjudication. The decision of the adjudicator is binding on the financial institution, but not on the retail investor, who may seek further recourse through the courts.

iii Settlements

Entering into settlement

The general principles relating to the settlement of a securities claim are no different from those relating to settlement of other types of claims. Settlement agreements generally take the form of a contract or a deed.

The parties are generally free to agree on the terms of the settlement and the courts would not intervene save in exceptional circumstances. There is no need for the court to endorse the settlement agreement, though it is possible for parties to record the terms of the settlement agreement by entering it as a consent order.


In the event of a settlement, there is no requirement for attorneys' fees to be fixed by the court – parties are free to agree on their costs.

However, if a settlement offer is made by one party and the other party does not accept it, there may be costs implications for the latter party depending on the outcome of the trial. Under Singapore's civil procedure rules, where a plaintiff's offer to settle is rejected and the plaintiff subsequently obtains a court judgment equal to or more favourable than the terms of the offer, the plaintiff is entitled to its legal costs on an indemnity basis from the date of the offer to the date of the judgment.

Conversely, where a defendant's offer to settle is rejected and the plaintiff subsequently obtains a judgment that is equal to or worse than the terms of the offer, the court may award the defendant its costs on an indemnity basis.

Breach of settlement agreement

Where one party acts in breach of the settlement agreement, the possibility of the other party bringing a claim based on the facts existing prior to settlement (as opposed to a claim based on the settlement agreement alone) depends on the terms of the settlement agreement.

iv Damages and remedies

The primary remedy awarded in securities claims, as in other claims, is damages. The calculation of damages depends on the exact nature of the claim, though the general principle behind an award of damages is to compensate the plaintiff for its losses.

If the claim is contractual in nature, the standard measure of damages will be the amount needed to place the plaintiff in a position as if the contract had been performed. If the claim is tortious in nature, the standard measure of damages will be the amount needed to place the plaintiff in a position as if the tort had not been committed.

Where there has been a contravention of the SFA, investors who have suffered losses as a result of the contravention are entitled to make claims against the contravening person. The amount of compensation that a claimant is generally entitled to is its loss suffered by reason of the difference between the price at which the securities were dealt in contemporaneously and the price at which the securities would likely have been so dealt in at the time of the contemporaneous dealing if there had been no contravention (or where insider trading is concerned, if the inside information had been generally available). However, the maximum recoverable amount is the amount of profit gained or the amount of loss avoided by the contravening person. The court will pro-rate this amount if there are multiple claimants.

Non-monetary remedies, such as orders for specific performance and injunctions, may be awarded where damages are inadequate to compensate the plaintiff for its loss. The court will consider all the circumstances to decide whether to award such remedies, including whether the plaintiff itself is guilty of any blameworthy conduct.

Public enforcement

i Forms of action

Powers of the SGX

The SGX has the power to impose various sanctions, such as public reprimands, fines, restriction of access to market facilities, suspension and delisting.

Powers of the MAS

A range of enforcement actions is available to the MAS, including issuing warnings and reprimands, offering composition, issuing prohibition orders, directing the removal of directors and officers, and revoking or suspending the regulatory status of the financial institution.

Where appropriate, enforcement proceedings may also be commenced against the defendant. This can be done in one of two ways. The first is for the MAS to refer the matter to the Attorney-General Chambers (AGC), which can then decide to commence criminal proceedings.

Alternatively, the MAS may pursue enforcement proceedings under the civil penalty regime. Under this regime, the MAS may, with the consent of the AGC, commence civil proceedings against the defendant to seek a civil penalty.

Where the MAS has successfully pursued enforcement proceedings under the civil penalty regime, the court will not allow criminal proceedings to be brought against the same contravening person on the same subject-matter.

ii Procedure

The MAS will first investigate the matter to decide whether further action should be taken. The powers of the MAS are set out above.

Criminal proceedings

Where the matter is referred to the AGC, it has the discretion as the public prosecutor to decide whether or not to commence criminal proceedings. The conduct of criminal proceedings involving securities-related offences is similar to that of criminal proceedings involving other types of criminal offences.

The accused would first be charged in court and then be asked whether he or she pleads guilty. A guilty plea must be made by the accused personally, voluntarily and without qualification. The court must also be satisfied that the accused understands the nature and consequences of his or her plea and the punishment prescribed for the offence, especially where he or she is unrepresented.

If the accused pleads guilty, the matter would be referred for sentencing. If the accused pleads not guilty, the matter will proceed to trial.

Prior to the trial, the prosecution has a duty to disclose to the accused (1) any unused material that may reasonably be regarded as credible and relevant to the guilt or innocence of the accused; or (2) any unused material that provides a real chance of pursuing a line of inquiry that leads to (1).

During the trial, the prosecution will first present its case, which will include the examination of its witnesses. After the prosecution examines each of its witnesses, the defence would have the opportunity to cross-examine him or her. After the prosecution closes its case, the defence will present its case in similar fashion.

The court will only convict the accused if it is satisfied, having heard all the evidence, that all the elements of the offence are made out beyond a reasonable doubt. Otherwise, the accused will be acquitted.

Proceedings under the civil penalty regime

If the MAS decides to pursue civil proceedings under the civil penalty regime, the procedure would generally follow that of all other civil proceedings heard before the General Division of the High Court.

Proceedings are commenced by the MAS making a claim against the contravening person, who will then have to enter an appearance in court and file a defence if he or she intends to dispute the claim. Thereafter, discovery will take place (during which all relevant documents must be disclosed) and affidavits of evidence-in-chief would be filed. The matter would then proceed to trial.

In contrast to criminal proceedings where a higher burden of proof applies (i.e., beyond a reasonable doubt), the burden of proof in proceedings under the civil penalty regime would be that of the civil standard (i.e., balance of probabilities). The rationale for introducing the civil penalty regime is to improve efficiency in enforcement by removing the penal nature of criminal sanctions and allowing matters to be settled without admission of liability.

iii Settlements

Criminal proceedings

As with all criminal proceedings, the prosecution has the discretion to proceed with a lesser charge or withdraw the charge entirely. The accused may also decide to plead guilty to the charge at any stage of the criminal proceedings, though the sentence imposed by the court would generally be higher where the accused pleads guilty at a later stage.

Where the accused is a company, partnership, limited liability partnership or an unincorporated association, the prosecution may decide to enter into a deferred prosecution agreement (DPA) with the accused in lieu of prosecution. A DPA is a voluntary agreement under which the prosecution agrees not to prosecute a corporation in exchange for the corporation agreeing to fulfil certain conditions and requirements within a fixed duration. Such conditions could include payment of a financial penalty, implementation of a compliance programme and cooperation in investigations.

The DPA framework is intended to enable authorities to investigate large-scale, complex corporate crimes, and help bring culpable individuals to justice. It assists the prosecution in taking further action against culpable individuals (in this regard it should be noted that the DPA scheme does not apply to the individual officers) while avoiding costly investigations and litigation.

The DPA framework only applies to scheduled offences, including certain offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, the Prevention of Corruption Act and the SFA.

All DPAs will need to be approved by the General Division of the High Court. Approval will only be granted if the DPA is in the interests of justice and its terms are fair, reasonable and proportionate. To ensure transparency, DPAs must be published after they are approved by the court.

Where a DPA is entered into and approved by the court, the corporation is deemed to have been granted a discharge not amounting to an acquittal. After the expiry of the DPA, the High Court may grant a discharge amounting to an acquittal. If, however, the corporation breaches the terms of the DPA during its term, the prosecution can make an application to terminate the DPA and prosecute.

Proceedings under the civil penalty regime

The MAS has the power to enter into a settlement agreement with the contravening person to pay, with or without admission of liability, a civil penalty. The rules governing such a settlement agreement are the same as in a private action commenced by investors (see above). There is no requirement for the settlement agreement to be judicially endorsed by the court. Neither is there a need for attorneys' fees to be fixed by the court.

iv Sentencing and liability

Criminal proceedings

Generally, a person who is convicted of market misconduct offences may be sentenced to a fine not exceeding S$250,000, imprisonment for a term not exceeding seven years, or both.

Civil penalty regime

Under the civil penalty regime, the court may order payment of a sum not exceeding three times the amount of profit that the person gained as a result of the contravention or three times the amount of loss that the person avoided as a result of the contravention, whichever is greater and subject to a maximum cap of S$2 million. However, where the person is a corporation, the payment ordered must in any event not be less than S$100,000. In any other case, the minimum payment that must be ordered is S$50,000.

In assessing the amount of profit gained or the loss avoided by the contravening person, the court may consider the difference between the price paid or received by the contravening person and the trading price of the securities had the contravention not been committed (except for insider trading where the court would take into account the price within a reasonable period after public dissemination of the information).

Consequential and other orders

Where the contravening person is convicted of an offence or ordered to pay a civil penalty, the court may fix a date on or before which all claimants have to file and prove their claims for compensation in respect of that contravention.

The court may also make an order against any other person who has received the whole or any part of the benefit of that contravention for disgorgement of that benefit, being benefit derived from trades carried out for the third party by the contravening person.

Where it appears that a securities-related offence has been or is about to be committed, the court has the power to make a range of orders, including restraining and mandatory orders and orders declaring that a contract relating to a capital markets product or financial benchmark is void or voidable.

Cross-border issues

The SFA may potentially apply to foreign parties (including foreign issuers) as it has extraterritorial scope.

First, where a person commits an act partly in and partly outside Singapore, and that act constitutes an offence under the SFA, that person would be guilty of the offence as if the acts had been carried out wholly in Singapore.

Second, even where a person commits the offence outside Singapore, that person can be prosecuted and convicted of that offence in Singapore if the act has a substantial and reasonably foreseeable effect in Singapore.

The extraterritorial scope of the SFA as described above also applies to civil proceedings (including proceedings under the civil penalty regime) commenced in relation to insider trading and other forms of market misconduct.

In civil proceedings, where the defendant is a foreign party with no presence in Singapore, there may be difficulties in the service of the originating process and the subsequent enforcement of any judgment. As regards service, leave of the Singapore court would have to be obtained prior to effecting service of the originating process overseas. If judgment is eventually obtained from the Singapore court and has to be enforced in the foreign jurisdiction, the ease of enforcement would depend on the laws and processes of the place of enforcement.

One issue that normally arises in cross-border civil disputes is the jurisdiction in which the dispute should be heard. In this regard, the inquiry starts with whether there is an applicable jurisdiction clause. Where the parties have agreed to an exclusive jurisdiction clause, the Singapore court will generally enforce that clause. Where the parties have agreed to a non-exclusive jurisdiction clause (in favour of Singapore), the Singapore courts will generally enforce the clause unless there is strong cause for not doing so. This is a very high threshold to meet.

If there is no applicable jurisdiction clause, then the Singapore courts would determine which forum (Singapore or the foreign jurisdiction) is the natural forum to hear the dispute, and the inquiry involves (but is not limited to) a consideration of which jurisdiction has the most real and substantial connection to the dispute. This is largely a question of fact and involves the consideration of multiple factors.

Year in review

i Legislative amendments

The Payment Services Act, which was passed by Parliament in January 2019, sought to provide a framework for the regulation of payment systems and payment service providers in Singapore, so as to strengthen consumer protection and promote confidence in electronic payments. Since then, there have been further significant developments in the area of digital payment tokens; namely, cryptocurrencies such as bitcoin.

Hence, in January 2021, the Payment Services Act was updated to implement certain enhanced international standards adopted by the Financial Action Task Force, which addressed money laundering and terrorism-financing risks posed by virtual asset service providers that are not already regulated as financial institutions. Such virtual asset service providers (referred to as digital token service providers) may facilitate the use of digital payment tokens for payments without possessing the monies or digital payment tokens involved. With the legislative amendments, the MAS will have expanded powers to regulate and impose measures on digital payment token service providers to ensure better consumer protection and to maintain financial stability and safeguard the efficacy of monetary policy. Such measures may, for, instance include requiring the service provider to segregate its customer assets from its own assets.

ii Recent judgments

In the past year, there have been two judgments relating to investor claims that merit further discussion.

The first case (Sheila Kazzaz v. Standard Chartered Bank [2021] 1 SLR 1) relates to unsuccessful claims made by a customer against a bank for misrepresentation and negligence in advising and recommending financial products to him. The judgment demonstrates the difficulties that sophisticated investors face when making claims of such nature against financial institutions.

The customer had opened the account with the bank as a 'professional client' (as opposed to a 'retail client'), with a view to investing part of his family wealth. The customer took out a loan facility for the financing of life insurance premiums as well as a mortgage loan. The intention was to free up funds for investment in a portfolio that would generate sufficient returns to meet the interest payments arising from the loans. However, as the customer later took out a number of loans against the value of his portfolio for use in his overseas businesses, the bank informed him that his portfolio could no longer generate sufficient income to meet the interest payments. The customer then commenced proceedings against the bank, alleging that he was induced to enter into the various arrangements as a result of the bank's representations that the investment returns would cover the interest payments for the loans, and that the various transactions he entered into were suitable for him. The customer also claimed that the bank was in breach of its duty of care in failing to highlight the risks of the arrangements (in particular, currency risks) to him.

The trial court dismissed the customer's claims. The court found that it was reasonable for the bank, when first proposing the financial arrangements, to believe that they would generate sufficient returns to meet the interest payments and were suitable for the customer. As regards the claim for breach of duty of care, the court found it difficult to believe that the customer, being an experienced businessman, would not understand basic concepts of foreign exchange and currency risk. Such risks were also set out in the bank's terms and conditions. The decision of the trial court was upheld on appeal by the Court of Appeal.

The second case (IPP Financial Advisers Pte Ltd v. Saimee bin Jumaat [2020] 2 SLR 272) also involves an investor's claim for mis-selling, but is more significant for the court's remarks on when time should start running for the purpose of calculating the limitation period. The plaintiff was an investor who sued his financial advisers after his investment failed. The financial advisers had advised the plaintiff to invest in the foreign exchange market through a trading account operated by a third party. This trading account would perform automated trades based on an algorithm trading system. The plaintiff had transferred funds for the purpose of the investment in April 2011. He claimed that the defendants had represented that the investment was safe and capital guaranteed, and would pay the principal amount invested along with a profit of 40 per cent within a year from the date of investment (i.e., by April 2012). After the plaintiff failed to receive any returns on his investment by the due date, he entered into a settlement agreement with the third party in relation to the investment. The settlement required the third party to pay a settlement sum to the plaintiff by September 2012. The third party failed to do so and the plaintiff commenced proceedings against the financial advisers for negligent misrepresentation, but he did so only in July 2018. An issue therefore arose as to whether the claims were time-barred. This in turn depended on whether the cause of action arose in (1) April 2011 (when the investment was made); (2) April 2012 (when the investment returns were due); or (3) September 2012 (when the plaintiff failed to receive the settlement sum). As the applicable limitation period is six years, the claims would be time-barred if the court found (1) or (2).

The Court of Appeal found that the claims were time-barred as the cause of action arose in April 2012 (when the investment returns were due). The court explained that for claims in negligence, the cause of action would accrue when the loss occurred. The determination of such loss must be made with reference to the pleaded claims, which, on the facts, were made based on the negligent misrepresentations and not the settlement agreement.

The Court of Appeal also rejected the notion that the loss occurred in April 2011 (when the investment was entered into). For the purpose of calculating the limitation period, the relevant type of loss is actual loss – purely contingent loss is irrelevant until the contingency occurs. On the facts of the case, the plaintiff suffered a contingent loss when he made the investment. Such loss only materialised when he failed to receive his expected returns in April 2012. The outcome may, however, have been different if the investment had been a total sham such that it was worthless from the outset – but there was no allegation or evidence to such effect in this case.

This judgment is welcomed as it brings further clarity to the calculation of the limitation period, which is often the subject of conflicting authorities. While issues on limitation may be perceived as 'technical', the judgment demonstrates that they may have a very real impact on a party's claim – the trial court had in fact found the financial advisers to be liable for negligent misrepresentation. It also serves as a reminder for potential plaintiffs to bring proceedings expeditiously to avoid the possibility of the claims being time-barred.

iii Trends

MAS enforcement actions

On 4 November 2020, the MAS published its enforcement report for the 18-month period ending June 2020. The report outlines the MAS' enforcement actions, priorities, and statistics in a bid to provide greater accountability to the general public.

The report explains that from 1 January 2019 to 30 June 2020, the MAS has:

  1. secured nine criminal convictions, with nine individuals sentenced to imprisonment;
  2. imposed S$11.7 million in civil penalties;
  3. issued S$3.4 million in penalties to 18 financial institutions;
  4. issued 23 reprimands to four individuals and 17 financial institutions;
  5. issued 124 warnings to 22 individuals and 91 financial institutions;
  6. issued 76 letters of advice to 34 individuals and 42 companies;
  7. issued 25 prohibition orders banning unfit representatives from re-entering the financial industry;
  8. revoked the licences of one financial adviser and two fund management companies; and
  9. issued 282 supervisory reminders to 15 individuals and 199 financial institutions.

The average time taken for a regulatory action was eight months, 26 months for a civil penalty and 24 months for a criminal prosecution.

Based on the report, the MAS has undertaken efforts to leverage technology in proactively detecting misconduct and investigating market abuse. For instance, in April 2020, the MAS launched Project Apollo, an augmented intelligent system that automates the computation of key metrics used in the analysis of suspicious trading activities and assesses the likelihood that certain types of market manipulation have occurred. This reduces the need for manual computation, helps to identify egregious transactions with higher market impact and provides greater insight into market trading behaviour.

The report also sets out the MAS' enforcement priorities for 2020 to 2021:

  1. pursue serious and complex cases of corporate disclosure breaches;
  2. deepen its capability to proactively detect financial advisory misconduct;
  3. continue its focus on financial institutions which lack rigorous systems and processes for anti-money laundering and combating the financing of terrorism;
  4. update its enforcement-related powers to better detect, investigate and take action against misconduct; and
  5. enhance focus on senior management accountability for breaches by their financial institutions or subordinates.

Claims against financial service providers

There have been no significant changes in the claims brought by or against financial service providers in the past year, with more matters continuing to be resolved by way of ADR methods. For example, for the financial year ending 30 June 2020, FIDReC received 1,227 claims. This is an 18 per cent increase from the previous year. Most of the claims (81 per cent) were resolved at the mediation stage. Eighty-nine per cent of the claims were also resolved within six months of receipt. This is despite FIDReC's operations being curtailed in the second half of the financial year by the pandemic and the circuit breaker measures imposed by the Singapore government – FIDReC adapted by moving mediation and adjudication online as far as possible.

Outlook and conclusions

i Covid-19 pandemic

The covid-19 pandemic continues to rage across the globe, with several countries experiencing multiple waves of infection and undergoing varying forms of lockdowns. Recent vaccine development and production has led to cautious optimism that the global economy will recover in the coming months, though specific sectors such as hospitality and tourism continue to suffer as a result of closed borders. The Singapore government has signalled that its support measures for the economy would shift from broad-based emergency support to focus on accelerating structural adaptations. The aim is to equip businesses and workers with deep and future-ready capabilities. It remains to be seen how Singapore and the world will emerge from the pandemic.

ii KS Energy Limited

In August 2020, the former Chief Executive Officer and Chairman of mainboard-listed KS Energy Limited was charged with 112 counts of market rigging and false trading offences. KS Energy Limited is an energy services provider to the global oil and gas, marine and petrochemical industries. The charges allege that the former CEO gave instructions for the purchase of shares in KS Energy Limited so as to push up the share price on 112 trading days between December 2014 and September 2016.

At the time of writing, KS Energy Limited is under judicial management and trading of its shares is suspended. The company's key creditor has stated that it accommodated the company's restructuring exercises without knowledge that the former CEO may have been artificially propping up the value of the shares. The judicial managers have received approval to wind up its key operating subsidiary and KS Energy Limited itself faces a potential winding up.

iii Hin Leong

In early 2020, news broke that Hin Leong Trading (Pte) Ltd, once Asia's largest oil trader, collapsed after a historic crash in the oil price triggered defaults that exposed years of hidden losses and alleged fraud by the company's founder and his family. Despite reporting consistent profits in its financial statements, the company had in fact racked up approximately US$4 billion in debt. The company had also sold a substantial part of the inventory it had used as collateral to secure loans. Hin Leong Trading (Pte) Ltd and its shipping arm, Ocean Tankers (Pte) Ltd, were placed under judicial management.

In August 2020, the judicial managers commenced proceedings against the founder and his family, seeking the repayment of the company's debt and dividends that they allegedly paid themselves, even though the company was insolvent. It is alleged that they breached their fiduciary duties as directors and engaged in fraudulent trading. The alleged fraud included the creation of fictitious gains to conceal accumulated trading and other losses, the forgery of documents, the manipulation of accounts, the overstatement of inventory and the obtaining of financing through improper means. The company's founder also currently faces two charges of abetment of forgery for the purpose of cheating.

At the time of writing, the Singapore court has approved the winding up of Hin Leong Trading (Pte) Ltd, dashing any hopes for a successful restructuring of the company.


1 Vincent Leow is a partner and Nicholas Kam is an associate at Allen & Gledhill LLP.

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