A 60-year-old Indian-origin Singaporean man was sentenced to four week in jail on Wednesday for failing to exercise diligence in his duty as a director of a company which received more than Euro 54 million (SGD78 million) from Germany’s Wirecard AG between December 2014 and September 2015.
Thilagaratnam Rajaratnam agreed to be a director of a firm called Strategic Corporate Investments for SGD500 a month, and without getting involved with its dealings, reported The Straits Times.
Wirecard AG, a payment processing company, had filed for insolvency in Germany in June 2020 after admitting Euro1.9 billion in cash was missing from its accounts.
The company’s former chief executive Markus Braun and several other top executives were then arrested on fraud charges.
Despite heading Strategic, Thilagaratnam did not know the company had received Wirecard money in its bank accounts which were later transferred to various other parties.
At the time of the offence, his brother, R. Shanmugaratnam, 58, was a director at Citadelle Corporate Services, a firm providing corporate secretarial services. Its clients included companies owned by Briton James Henry O’Sullivan, 49.
Both Shanmugaratnam and O’Sullivan were allegedly involved in the Wirecard case here. Their cases are pending.
For the current case, Deputy Public Prosecutor Vincent Ong said Shanmugaratnam asked Thilagaratnam to be Strategic’s nominee director some time in or around early 2014.
According to court documents, Thilagaratnam was told he would not be involved in the company’s management and would not have any responsibilities. He was also told he would only need to sign documents for the company, and take instructions from O’Sullivan’s team whenever needed, said the DPP.
Thilagaratnam agreed to be Strategic’s sole director for SGD500 a month. He thought the company was doing e-commerce but did not know, and did not try to find out details about its activities.
Strategic was incorporated on March 17, 2014.
DPP Ong said the monies were purportedly related to Wirecard AG’s planned acquisitions of companies in Brazil and Panama. “Strategic was purportedly appointed as an escrow agent to hold the incoming transfers, pending further instructions from (parties including) Wirecard AG… Strategic did not have these sums in its bank accounts after the outgoing transfers,” Ong said.
Thilagaratnam was unaware of such transactions, said the Singapore daily.
The prosecution told the court that between March 29, 2016, and April 7, 2018, Shanmugaratnam prepared seven letters from Strategic addressed to Wirecard AG and handed them to Thilagaratnam.
Thilagaratnam signed the seven letters, confirming that Strategic purportedly held up to Euro 54 million in escrow in its bank account for Wirecard AG.
He did so without ensuring that the contents of the letters were true.
DPP Ong said the contents of the letters turned out to be false, as Strategic did not have the monies in its account during the period mentioned in the letters.
The court heard that Shanmugaratnam later sent the letters to parties including Wirecard AG’s auditors in Germany.
Thilagaratnam was represented by lawyers Adrian Wee, Lynette Chang and Matthew Low from Lighthouse Law.
The lawyers stated in court documents that he was negligent and pleaded for him to be given a fine of SGD5,000.
Thilagaratnam’s bail was set at SGD30,000, and he is expected to surrender himself at the State Courts on February 29 to begin serving his sentence.
According to past media reports, Wirecard Singapore had been providing payment processing services to about 1,900 companies here before the Monetary Authority of Singapore (MAS) ordered it to stop on Sept 30, 2020.
MAS, the de facto central bank, also directed the firm to return all of its customers’ funds within two weeks.