Lee Chee Keet Public Prosecutor

• Jurisdiction: Singapore
• Judgment Date: 08 August 2016
• Date: 08 August 2016
• Docket Number: Magistrate’s Appeal No 139 of 2015
• Court: High Court (Singapore)

Lee Chee Keet

and

Public Prosecutor

[2016] SGHC 155

See Kee Oon JC

Magistrate’s Appeal No 139 of 2015

High Court

Criminal Procedure and Sentencing — Sentencing — Appellant charged with abetting deceitful act in connection with dealings in securities — Whether custodial threshold was crossed — Section 201(b) Securities and Futures Act (Cap 289,

2002 Rev Ed)

Facts

This was an appeal against the sentence of six months’ imprisonment imposed on the appellant for each of two counts of abetting a deceitful act in connection with dealings in securities, an offence under s 201(b) of the Securities and Futures Act (Cap 289, 2002 Rev Ed) (“the SFA”) read with s 109 of the Penal Code (Cap 224, 1985 Rev Ed) (“the s 201(b) charges”). These charges arose from the appellant’s deceptive use of nominees to circumvent a moratorium imposed by the Singapore Exchange Securities Trading Limited on the transfer and/or disposal of his shareholdings in SNF Corporation Limited (“SNF”).

The appellant pleaded guilty before a district judge to the s 201(b) charges and various other charges which related to offences dating from 2004 and 2005, when he was a director and substantial shareholder of SNF. The district judge applied the sentencing factors laid down in the High Court decision of PP v Ng Sae Kiat [2015] 5 SLR 167 (“Ng Sae Kiat”) and decided on six months’ imprisonment for each s 201(b) charge and ordered these sentences to run concurrently.

The central issue in the appeal was whether the custodial threshold had been crossed. The appellant’s primary argument was that the district judge erred in applying the sentencing factors in Ng Sae Kiat. He contended that the pre–Ng Sae Kiat sentencing norm should apply to him, namely that custodial sentences were only warranted where identifiable members of the investing public were defrauded and suffered losses. His alternative argument was that even if the sentencing factors in Ng Sae Kiat were to be applied, the custodial threshold had not been crossed.

Held, allowing the appeal:

(1) While the parties should not stray too far from the statement of facts (“SOF”) in making their submissions on sentence, it would not be fair or in the interests of justice to confine the Prosecution’s sentencing submissions to merely restating what had been included n the SOF. It would be entirely in order for the Prosecution to put forward appropriate submissions inviting the court to draw suitable inferences which had been set out in the SOF: at [19] and [20].

(2) The judgment in Ng Sae Kiat did not change the pre–existing sentencing norm; it merely consolidated existing principles and did not purport to create new law. Further, given the broad range of s 201(b) offences and the differing degrees of culpability of offenders, the court was not convinced that a common and uniform “sentencing norm” should or could be established across all types of s 201(b) offences save for factors that could assist in assessing the public interest at stake which would in turn determine the type of sentence to be imposed: at [30].

(3) To determine whether a custodial sentence was warranted, the High Court in Ng Sae Kiat set out a non-exhaustive list of factors to consider. Not all the factors enumerated in Ng Sae Kiat might be relevant or applicable in every case and in determining the appropriate weight to be given to the pertinent factors, much would ultimately turn on the individual circumstances before the court: at [31] and [32].

(4) The custodial threshold had been crossed. Although there was a lack of evidence of loss suffered by theinvesting public as well as actual market impact, the appellant’s culpability was demonstrably high considering his motive for personal gain as well as his sustained and painstakingly planned efforts to secure for himself an advantageous position in the market while avoiding detection: at [41].

(5) Greater weight was accorded to the mitigating factors. While there was no cogent basis to say that the district judge attached insufficient weight to the delay in prosecution, the appellant’s co–operation with the authorities including his willingness to testify against his fellow director was considered in his favour: at [53].

Case(s) referred to

Abu Syeed Chowdhury v PP [2002] 1 SLR(R) 182; [2002] 1 SLR 301 (refd)

Biplob Hossain Younus Akan v PP [2011] 3 SLR 217 (refd)

Chan Kum Hong Randy v PP [2008] 2 SLR(R) 1019; [2008] 2 SLR 1019 (refd)

Ng Geok Eng v PP [2007] 1 SLR(R) 913; [2007] 1 SLR 913 (distd) PP v Aniza bte Essa [2009] 3 SLR(R) 327; [2009] 3 SLR 327 (folld)

PP v Chan Yoke Ling Catherine [2004] SGDC 108 (refd)

PP v Cheong Hock Lai [2004] 3 SLR(R) 203; [2004] 3 SLR 203 (refd)

PP v Law Aik Meng [2007] 2 SLR(R) 814; [2007] 2 SLR 814 (refd)

PP v Loo Kiah Heng [2010] SGDC 434 (refd)

PP v Ng Sae Kiat [2015] 5 SLR 167 (folld)

PP v Sia Teck Mong [2005] SGDC 249 (refd)

PP v Wang Ziyi Able [2008] 2 SLR(R) 1082; [2008] 2 SLR 1082 (folld)

Vasentha d/o Joseph v PP [2015] 5 SLR 122 (refd)

Legislation referred to

Companies Act (Cap 50, 1994 Rev Ed) ss 83(1), 165(1)(b), 166(1) Penal Code (Cap 224, 1985 Rev Ed) ss 24, 109

Securities and Futures Act (Cap 289, 2002 Rev Ed) s 201(b) (consd); ss 137(1), 197(1), 199(b)(i)

Securities Industry Act (Cap 289, 1985 Rev Ed) s 102(b)

Davinder Singh SC, Pardeep Singh Khosa and Navin S Thevar (Drew & Napier LLC) for the appellant;

Christopher Ong Siu Jin and Haniza Abnass (Attorney–General’s Chambers) for the respondent.

See Kee Oon JC:

Introduction

1 This was an appeal against the sentence of six months’ imprisonment imposed on the appellant for each of two counts of abetting a deceitful act in connection with dealings in securities, an offence under s 201(b) of the Securities and Futures Act (Cap 289, 2002 Rev Ed) (“the SFA”) read with s 109 of the Penal Code (Cap 224, 1985 Rev Ed) (“the s 201(b) charges”). These charges arose from the appellant’s deceptive use of nominees to circumvent a moratorium imposed by the Singapore Exchange Securities Trading Limited (“the SGX”) on the transfer/disposal of his shareholdings in SNF Corporation Limited (“SNF”). The appellant had pleaded guilty before a district judge (“District Judge”) to these as well as various other charges which related to offences dating from 2004 and 2005, when he was a director and substantial shareholder of SNF.

2 After the hearing of the appeal on 29 April 2016, I concluded that there were grounds to allow the appeal against sentence. Accordingly, I reduced the sentence of six months’ imprisonment to four months’ imprisonment for each of the s 201(b) charges and ordered the imprisonment terms to run concurrently. I delivered an oral judgment on 25 May 2016, and I informed the parties that I would provide full grounds for my decision, which are set out below. These grounds fully incorporate the observations I had made in my oral judgment.

Factual background

3 The relevant facts are set out in the statement of facts (“SOF”) which the appellant had admitted to without qualification. The appellant became a director and shareholder of Gennex Solutions (S) Pte Ltd (“Gennex”) on 3 February 2000. In late 2002, Gennex, together with a number of other firms in the electronics industry, was approached by one Ng Hock Ching

(“Ng”) and Chow Weng Fook (“Chow”) for discussions relating to a proposed merger for the purpose of listing on SESDAQ, the secondary board of the SGX (“the IPO”). SESDAQ is now known as CATALIST.

The listing plans

4 Subsequently, SNF, represented by Ng and Chow, and the shareholders and directors of four interested companies entered into a Business Combination and Shareholders Agreement as well as a follow-up Supplemental Agreement. The four companies were: Gennex, CyberVisions (S) Pte Ltd, Micro Screen Production Pte Ltd and Max Quality (S) Pte Ltd (collectively “the subsidiaries”). Under these agreements, SNF agreed to acquire the subsidiaries and to allot ordinary shares in the capital of SNF to the subsidiaries’ shareholders as consideration. The agreements were made conditional upon SNF obtaining the eligibility-to-list (“ETL”) letter and approval from SGX for admission to the official list of SESDAQ.

5 On 16 February 2004, SNF was granted a conditional ETL and the four subsidiaries were officially acquired by SNF the very next day. Following this acquisition, Ng and Chow were appointed as chief executive officer and chief operating officer of SNF respectively. The appellant was appointed as an executive director of SNF. Pursuant to the SGX listing requirements, the SNF directors (including the appellant) undertook that they would observe a moratorium on the transfer or disposal of their entire shareholdings in SNF for a period of one year after listing as well as 50% of their respective shareholdings in SNF for the subsequent one year (“the moratorium”). The purpose of the moratorium, as stated in SGX’s Listing Manual, was to maintain the promoters’ commitment to the listed issuer and align their interests with that of public shareholders.

The events leading up to the offending conduct

6 Investigations revealed that during one of the meetings held in preparation for SNF’s IPO, Ng suggested to the SNF directors that they could place their shares in the subsidiaries with nominees to circumvent the moratorium. This arrangement would allow the directors to surreptitiously dispose of their SNF shareholdings (received as consideration for their shareholdings in the subsidiaries) through their nominees, right after the IPO if they so desired, without the need to observe the transfer/disposal restrictions imposed during the moratorium period.

7 The appellant approached five individuals (“the nominees”) with the intention of placing his Gennex shares with them. On the appellant’s instructions, each of the nominees signed a share transfer agreement with...