Public Prosecutor v Lim Ai Wah and Thomas Philip Doehrman

• Jurisdiction: Singapore
• Judge: Ng Peng Hong
• Judgment Date: 09 September 2016
• Neutral Citation: [2016] SGDC 249
• Court: District Court (Singapore)
• Hearing Date: 29 October 2015,10 June 2015,25 November 2015,23 November 2015,04 June 2015,01 September 2016,04 March 2015,18 July 2016,09 June 2015,26 November 2015,05 March 2015,23 May 2016,12 March 2015,18 September 2015,22 July 2016,03 June 2015,12 June 2015,11 June 2015,10 March 2015,11 March 2015,28 October 2015,24 November 2015,15 March 2016,26 October 2015,16 August 2016,05 June 2015,12 August 2016,15 September 2015,03 March 2015,22 March 2016,08 June 2015,27 October 2015,24 May 2016,16 March 2016
• Docket Number: DAC 26699 & Ors of 2012
• Plaintiff Counsel: Alan Loh, Asoka Markandu, Kelvin Kow and Grace Lim (Deputy Public Prosecutors)
• Defendant Counsel: Lai Yew Fei and Alec Tan (M/s Rajah & Tann LLP)
• Published date: 20 September 2016

District Judge Ng Peng Hong: INTRODUCTION

This was a joint trial of 2 accused persons. The first accused person Lim Ai Wah (“Lim”) claimed trial to a charge under s 477A read with s 109 of the Penal Code (Cap 224, 2008 Rev Ed) (“PC”) as well as five charges under s 47(1)(b) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap 65A, 2000 Rev Ed) (“CDSA”) punishable under s 47(6) of the CDSA read with s 109 of the PC. The second accused person is Lim’s husband, Thomas Philip Doehrman (“Doehrman”), an American. The s 477A and five s 47(1)(b) charges against him were materially identical with that faced by Lim and he claimed trial to all of them as well. Similar charges were pressed against one Stephen Li Weiming (“Li”) but he has since absconded from bail. Li is a national of the Republic of China.

At the conclusion of the case, after considering the evidence and submissions, I found that the Prosecution had established all the charges against Lim and Doehrman beyond a reasonable doubt and they were accordingly found guilty and convicted. Both the accused are appealing against their respective convictions and sentences.

BACKGROUND FACTS

The following facts were not disputed. Sometime in 2008, the Papua New Guinea government established the Inclusive Education for National Development for Community Education Trust (“ITE Trust”)¹ to set up Community Colleges in Papua New Guinea (“PNG”) for, among other things, the improvement of the quality of education and the provision of education skills. The board of the ITE Trust had three trustees — of whom two were co-chairmen of the board. One of the co-chairmen was Michael Maiwa Somare (Moox) who is the son of Sir Michael Thomas Somare, the Prime Minister of Papua New Guinea at the material time. The other co-chairman was Father Xavier Alphonse, who was based in India. The remaining trustee was Doehrman. Lim is Doehrman’s wife. The ITE Trust had the noble aim of providing accessible technical or vocation education to underprivileged children (“CC Project”). As Papua New Guinea is a vast and mountainous island country, the cost-effective solution was to conduct lessons from a central location and to broadcast them wirelessly in real time to the Community Colleges.

The CC Project was split into two phases. Lim established the first four Community Colleges in phase 1 of the project through her companies, Quest Petroleum (Singapore) Pte Ltd (“Quest Petroleum”) and Quest Investments (PNG) Limited (“Quest Investments”). They were incorporated in Singapore and Papua New Guinea respectively. It was unfeasible to construct conventional brick and mortar buildings due to Papua New Guinea’s geological and infrastructural constraints. Therefore, Lim imported easily assembled containers from a Chinese company, Renhe Movable Travelling Lodge Manufacture Co Ltd (“Renhe”), and used them as classrooms, dormitories, clinics and police posts.

Phase 2 of the project envisaged the founding of 13 more Community Colleges. As the ITE Trust was short on funds, the government of Papua New Guinea obtained a concessionary loan of US$35 million from the Chinese government through the Export-Import Bank of China (“EXIM loan”). The terms of the loan stipulated that a Chinese company was to be appointed as the main contractor of the project. In the event, ZTE Corporation (“ZTE”) became the main contractor for the second phase of the project. Li was an employee of ZTE and he was responsible for liaising with the ITE Trust. The arrangement between ZTE and the ITE Trust was reflected in a number of written contracts. The ITE Trust and ZTE entered into a Frame Contract which set out the general terms for the CC Project. Under the Frame Contract, both parties signed an additional three contracts to regulate the different aspects of the CC Project. See P24. These three contracts are set out in Table 1 below. For convenience, I shall refer to any one of these contracts as the “ITE-ZTE Contract”. See also appendix 1 to this judgment for the chronology of events.

TABLE 1
NAME	PRICE
Equipment Supply Contract2	US$22,435,680.00
Services Contract3	US$5,264,180.00
Managed Service Contract	US$11,114,205.00
Frame Contract4	US$38,814,065.00

In June 2010, ZTE hired U-Konekt Technologies Ltd (“U-Konekt”) as its subcontractor. U-Konekt was to install containers and establish parts of Wimax, a wireless network. ZTE drafted a service contract for these purposes, and two copies of it were signed on separate dates in May and June 2010 by the respective parties (“U-Konekt-ZTE Contracts”).

On 8 June 2010, ZTE entered into a separate agreement with Questzone Offshore Limited (“Questzone”), a company incorporated in the British Virgin Islands (“BVI”) on 26 February 2010 (“Questzone-ZTE Contract”). See exhibit P6C. On 4 May 2010, Lim and her sister, Lim Swee Kheng, became the only directors of Questzone. Lim was its only shareholder. It was a shell company. Clause 4.1 of the Questzone-ZTE Contract stipulated that ZTE was to pay the full contract sum of US$3,600,000 to Questzone’s Singapore Standard Chartered Bank account after ZTE received at least US$3,600,000 from the ITE Trust.

It is to be noted that the relevant parties – ITE Trust, Questzone, U-Konekt, ZTE entered into the relevant contracts, namely, Questzone-ZTE Contract, ITE-ZTE Contract, U-Konekt-ZTE Contracts on or about the same time when ZTE signed the U-Konekt-ZTE Contract and the Questzone-ZTE Contract on 27 May 2010. In my view, the inference was clear – to indirectly receive payment from ITE Trust for the benefit of Questzone.

On 15 July 2010, Lim Swee Kheng issued a Questzone invoice to ZTE for the sum of US$3,600,000 (“Questzone Invoice”). This invoice formed the basis of the s 477A charges. On 30 July 2010, ZTE duly transferred a sum of US$3,599,972.85 (after service charges) to Questzone’s Singapore bank account.

Between August and November 2010, Questzone transferred a total of five sums of monies to J&M International Ltd, a BVI company incorporated by Li’s wife, Catherine Li (Catherine Chen) (“J&M International”), and the personal Standard Chartered bank account of one Sir Michael Somare, the former Prime Minister of Papua New Guinea (“Somare”) and who is also the father of Moox. These payments formed the basis of the s 47(1)(b) of the CDSA charges.

CONTENTIONS OF THE PROSECUTION AND DEFENCE

The Prosecution alleged that Lim, Doehrman and Li had engaged in a conspiracy to create a fictitious contract and a false invoice, namely the Questzone-ZTE Contract and the Questzone Invoice. It was further alleged that no services were ever intended to be provided under the Questzone-ZTE Contract as its purpose was to disguise the illicit nature of the US$3,600,000 payment. The Prosecution postulated that these arrangements were necessary because the intended recipients of the US$3,600,000 were in positions of conflict of interest as they were involved in either ZTE or the ITE Trust. Moreover, Lim was the wife of Doehrman who was at the material time a trustee of the ITE Trust. The then Prime Minister of Papua New Guinea, Somare is Moox’s father. Moox was the co-chair of the ITE Trust. See [25] of the Prosecution’s closing submissions. It was also submitted that the accused might have intended to defraud “whosoever might be called upon to investigate the purported commission payment from ZTE to the accused”.

As for the conspiracy charges for the CDSA offences, the Prosecution submitted that these were made out since the relevant sums were paid — as planned by, inter alia, Doehrman and Lim — out of the US$3.6m (ie, the criminal proceeds from the conspiracy to commit falsification with intent to defraud), either to Somare (in Singapore), or to Li (via his wife’s company in Hong Kong). It was agreed by the Defence that these CDSA charges stand and fall with the s 477A PC charge.

Mr Lai, counsel for Lim, contended that there was nothing illicit about the payment of the US$3,600,000 and that ZTE and the ITE Trust were fully aware of it. It was further submitted that Lim had established herself as an exclusive supplier in Papua New Guinea and she was not prepared to give up her business without compensation from ZTE. As such, it was a legitimate commission/compensation for Lim’s loss of business opportunity and future profits. Moreover, the Questzone-ZTE Contract was prepared by ZTE, and Lim’s intention in the incorporation of Questzone and the creation of the Questzone Invoice were simply to adhere to the steps set out by a listed multi-national company - ZTE.

Mr Tay, counsel for Doehrman, argued that Doehrman had nothing to do with Questzone. He was unaware of how the payment of US$3,600,000 was described in both the cover letter from Questzone and the enclosed Questzone Invoice until the Corrupt Practices Investigation Bureau (“CPIB”) had started to investigate him. It was submitted that ZTE had in fact knowingly directed the payment of US$3,600,000 to Lim through Questzone. In summary, it was submitted that there was no evidence of conspiracy, no falsification of document and that there was no intent to defraud. With regard to the CDSA charges, Mr Tay argued that it was Lim’s prerogative as to how she wished to spend her commission. Mr Tay also submitted that the Defence was prejudiced by the Prosecution changing its case as to the alleged victim of fraud and that the Defence was caught by surprise. It was also contended that the Prosecution had breached their disclosure obligations as provided under the Criminal Procedure Code (Cap 68, 2012 Rev Ed) (“CPC”).

CASE FOR THE PROSECUTION The trials-within-a-trial Admissibility of Lim’s first statement (PS7)

Three investigating officers from the CPIB recorded a total of four statements from Lim between March and September 2011. Mr Tok Thiam Soon (“Tok”) recorded...