5 December 2016
A former ST Marine CEO and president, See Leong Teck, was sentenced to 10 months’ jail and a $100,000 fine. ST Marine (STM) is a subsidiary of government linked ST Engineering, a blue-chip company listed on the Stock Exchange of Singapore. Two other members of the STM Board were also implicated. Mr Peter Yap Kim Kee, Chairman of STM’s audit committee, and Mr Tan Pheng Hock, ST Engineering’s chief executive officer until he resigned 30 September 2016. Both have not been charged yet. Both were aware of the kickbacks STM was giving to employees of its clients who were mainly overseas firms. See became CEO of STM in December 1997 and its President from 1998 to 2008.
See pleaded guilty to one charge each of corruption, falsification of accounts, and failure to act honestly and use reasonable diligence in the discharge of his duties as the director of a company.
The practice of giving kickbacks to get business existed even before See became CEO. In 2000 or thereabout See met with senior management, discussed the kick-backs and agreed to the continuation of the practice. The issue was brought up again in 2004 in a meeting in which Mr Yap and Mr Tan were present and they did not object to the continuation of the practice.
In 2003/2004 the auditors brought up the issue of kickbacks. See told auditors that the kickbacks were common practice in the industry and necessary. Although the auditors did not accept the explanation both times, the practice continued.
An employee would submit a petty cash claim for kickback payment, labelled as entertainment expense, after getting approval from the senior management. A cash cheque was issued, which was cashed and paid to the employee of the client company. No receipt was obtained from the recipient. In such system, there are lot of opportunities for fraud as no one will know how much was paid to the foreign client’s employee.
Singapore: Ex-ST Marine CEO jailed 10 months
5 December 2016