Public Prosecutor v Cheng Jin Quan Mark

• Jurisdiction: Singapore
• Judge: Soh Tze Bian
• Judgment Date: 26 October 2022
• Neutral Citation: [2022] SGDC 249
• Court: District Court (Singapore)
• Docket Number: DAC-930902-2019 & others, MA-9212-2022-01
• Published date: 01 November 2022
• Year: 2022
• Hearing Date: 08 November 2021,09 November 2021,24 November 2021,25 November 2021,11 May 2022,13 May 2022,27 June 2022,29 June 2022
• Plaintiff Counsel: DPP Tan Pei Wei & DPP Cheng Yuxi (Attorney-General's Chambers)
• Defendant Counsel: Loo Choon Chiew, Chia Foon Yeow & Selina Naidu (LOO & PARTNERS LLP)
• Subject Matter: Criminal Law,Capital Markets Services Licence,Securities and Futures Act (SFA),Purported officer under SFA,Criminal breach of trust,Conspiracy,Rule in Browne v Dunn & its exception
• Citation: [2022] SGDC 249

District Judge Soh Tze Bian: CHARGES

The accused person, Cheng Jin Quan Mark (“AP”) claimed trial to the following 4 charges: (a) Charge in DAC-930902-2019

“…from April 2014 to June 2014, in Singapore, one Zabel Global Investments Limited (“Zabel”), of which you were purporting to act in the capacity of a manager, did carry on business in a regulated activity under the Securities and Futures Act, Chapter 289 (“the SFA”), namely, fund management, without a capital markets services licence for fund management as required under section 82(1) of the SFA, and Zabel has thereby committed an offence under section 82(3) of the SFA, and further that the above offence was committed with your consent as an officer of Zabel, and you have thereby committed an offence under section 82(3) of the SFA read with section 331(1) of the SFA.”¹

(b) 3 charges in DACs 930903-5 of 2019 (i) “…you, sometime from May 2014 to June 2014, in Singapore, did abet by engaging in a conspiracy with one Loh Zhi Xiang to do a certain thing, namely to commit criminal breach of trust, and in pursuance of that conspiracy, and in order to the doing of that thing, an act took place between May 2014 and June 2014, to wit, whilst being entrusted with S$133,500 belonging to Zabel Global Investments Limited in UOB Account No. XXX, you dishonestly misappropriated the said property by transferring a total of S$133,500 from UOB Account No. XXX to UOB account no. XXX and UOB account XXX belonging to Loh Zhi Xiang, with the consent of Loh Zhi Xiang, and you have thereby committed an offence under section 406 read with section 109 of the Penal Code, Chapter 224.”² (ii) ”…you, sometime in June 2014, in Singapore, did abet by engaging in a conspiracy with one Loh Zhi Xiang to do a certain thing, namely to commit criminal breach of trust, and in pursuance of that conspiracy, and in order to the doing of that thing, an act took place in June 2014, to wit, whilst being entrusted with S$37,875 belonging to Zabel Global Investments Limited in UOB Account No. XXX, you dishonestly misappropriated the said property by transferring a total of S$37,875 from UOB Account No. XXX to POSB Account No. XXX belonging to you, with the consent of Loh Zhi Xiang, and you have thereby committed an offence under section 406 read with section 109 of the Penal Code, Chapter 224.” (iii) ”…you, sometime in June 2014, in Singapore, did abet by engaging in a conspiracy with one Loh Zhi Xiang to do a certain thing, namely to commit criminal breach of trust, and in pursuance of that conspiracy, and in order to the doing of that thing, an act took place in June 2014, to wit, whilst being entrusted with S$151,677 belonging to Zabel Global Investments Limited in UOB Account No. XXX, you dishonestly misappropriated the said property by transferring a total of S$151,677 from UOB Account No. XXX to a bank account belonging to First Lead Investments Consultant Ltd, with the consent of Loh Zhi Xiang, and you have thereby committed an offence under section 406 read with section 109 of the Penal Code, Chapter 224. STATEMENT OF AGREED FACTS

Both parties had agreed and signed a Statement of Agreed Facts (SOAF) (together with an agreed list of exhibits attached to the SOAF) which provided as follows: “1. The accused is Cheng Jin Quan Mark. 2. The co-accused is Loh Zhi Xiang. He is also known as Jeff. 3. Zabel Global Investments Ltd (“Zabel”) was incorporated in the British Virgin Islands on 30 August 2013.Jeff was a director of Zabel from 30 August 2013. Another involved party, Peh Wei Siang (“Wei Siang”) was also a director of Zabel from 30 August 2013 until on or around February 2014. The accused was employed as the Director (Operations) of Zabel. His letter of employment is admitted as Exhibit ASOF-1. 4. From April 2014 to June 2014, investors invested capital into funds managed by Zabel. Investors’ monies were pooled and used to trade in shares. The funds marketed comprised the following: a. Zabel Assured Sovereign 12 (“ZAS12”), which was marketed by Chow Siew Wan Alice (“Alice”), a consultant with Zabel. About 16 investors invested about SGD7.6 million in ZAS12 from April – June 2014. The factsheet that Alice showed to all the investors represented that no management fees were charged for this fund and that performance fees would only be payable if the fund’s returns exceeded 12% per annum. The factsheet is seen at Exhibit ASOF2. The documentation signed by these investors stated the same (i.e. that there were “0% management fees”). b. Zabel Assured 12, which was marketed by Tan Kim Lin, a consultant with Zabel. It collected about S$25,000 from one investor (Sam Phui Lin) on 26 May 2014. This fund charged 1.5% management fees per annum if the fund made a profit. c. Zabel Assured Special, which collected about SGD731,124 from six investors. It was represented to these investors that 0% management fees would be charged for this fund and the documentation signed by these investors stated the same. This fund was set up to invest in shares of Heng Fai Enterprises Limited. 5. These investors’ details are attached in the Annex. Their contract notes with Zabel, where available, are collectively admitted in Exhibit ASOF-3. Zabel had no other sources of income apart from the funds that it managed, which the accused knew. 6. Zabel’s abovementioned activities fell within the definition of “fund management” under the Second Schedule of the Securities and Futures Act (Cap 289) (“SFA”) and is thus a regulated activity requiring a Capital Markets Services (“CMS”) licence from the Monetary Authority of Singapore (MAS). At the time that Zabel was conducting the regulated activity between April 2014 and June 2014, Zabel did not hold the requisite CMS licence, nor was it exempt from the requirement to have a CMS licence. Zabel has thereby committed an offence under Section 82(1) punishable under Section 82(3) SFA. 7. The accused opened a UOB Kay Hian trading account XXX (“the accused’s UOBKH trading account”) on 25 February 2014. The account opening form is admitted as Exhibit ASOF-4. This account was opened solely for Zabel’s use as a temporary measure until bank accounts were opened in Zabel’s name. The letter confirming this arrangement, dated 25 Feb 2014, is admitted as Exhibit ASOF-5. 8. The accused also opened a personal UOB Current Account XXX (“the accused’s UOB account”) on 1 March 2014. The UOB account was opened for the purpose of receiving funds from the UOBKH trading account. The letter confirming this arrangement, dated 15 March 2014, is admitted as Exhibit ASOF-6. 9. The funds that Zabel collected from its investors from all three abovementioned schemes were deposited into the accused’s UOBKH trading account. When these monies were to be paid out, they were withdrawn from the accused’s UOBKH trading account, deposited into the accused’s UOB account, and thereafter withdrawn from the latter. The only monies flowing into the accused’s personal UOB account from 17 April 2014 to June 2014 were from his UOBKH trading account³ and the accused knew this. 10. In April 2014, the following emails were exchanged between the accused, Jeff, and/or Alice regarding the documents used to promote the ZAS12 fund. a. Email dated 17 March 2014 at 12.30 p.m. from Jeff to the accused titled “Re: Slides and Commission” with attachments titled: i. Annex Details_V1_17032014.pdf; ii. Application form_VI_17032014.pdf; iii. Fund Fact Sheet_V1_17032014.pdf; iv. Orientation Presentation_Edited_V1_17022014.pdf; and v. Sales Presentation_Edited_V1 17022014.pdf; (Collectively admitted as Exhibit ASOF-7); b. An email from the accused to Jeff titled “FOR Approval” dated 6 April 2014 at 7.33 p.m. with attachments titled: i. “Zabel sales Application Form- Final”; ii. “Zabel Assured 12- Final”; iii. “Zabel Assured Sovereign 12- Final 060414”; and iv. “Contract Note- Investment” (Collectively admitted as Exhibit ASOF-8); c. An email from the accused to Alice, copying Jeff, titled “Fwd: FOR Approval” dated 6 April 2014 at 8.16 p.m. with attachments titled: i. “Zabel sales Application Form- Final” ii. “Zabel Assured 12- Final(1)”; iii. “Zabel Assured Sovereign 12- Final 060414”; and iv. “Contract Note- Investment” (Collectively admitted as Exhibit ASOF-9); d. An email from Alice to the accused titled “factsheet add Capital Assured” on 13 April 2014 at 11.16 p.m.; with attachment (Collectively admitted as Exhibit ASOF-10); and e. An email from the accused from his personal email to his Zabel email titled “Re: factsheet add Capital Assured” on 14 April 2014 at 2.50 a.m. with attachment titled “Zabel Assured Sovereign 12- Final 140414.pdf” (Collectively admitted as Exhibit ASOF-11). 11. On 22 May 2014, S$3,125,000 was transferred from the accused’s UOB account to Heng Fai Enterprises Limited for the purchase of 53,000,000 Heng Fai placement shares. The fund transfer form is admitted as Exhibit ASOF-12. 12. The following sums were paid out of the monies in the accused’s UOB account as follows. Specifically, these sums were paid out of the monies collected from Zabel’s investors, which had been withdrawn from the trading account into the accused’s UOB account.⁴

Date	Mode of withdrawal	Amount paid out	Recipient	Purpose
26 May 2014	Cheque 0055519	S$50,500	Jeff	Jeff’s commission from Zabel for Apr 2014 ($25,250), as well as Wei Siang’s commission from Zabel ($25,250), which Wei Siang had loaned to him.
16 June 2014	Cheque 0055524 (Admitted as Exhibit ASOF-13)	S$83,000	Jeff claimed that this comprised his commissions from Zabel for May and June 2014 as well as loans for his personal purposes
17 June 2014	Transfer of $57,750 to POSB Account No. XXX in the accused’s name	S$57,750, of which the accused retained $37,875	The accused

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