Teo Chu Ha v PP

• Jurisdiction: Singapore
• Judgment Date: 18 September 2013
• Date: 18 September 2013
• Docket Number: Magistrate's Appeal No 279/2012/02
• Court: High Court (Singapore)

Teo Chu Ha

Plaintiff

and

Public Prosecutor

Defendant

[2013] SGHC 179

Choo Han Teck J

Magistrate's Appeal No 279/2012/02

High Court

Criminal Law—Corruption—Prevention of Corruption Act (Cap 241, 1993 Rev Ed) —Appellant paid $6,000 for shares in company—Appellant helped company secure initial contract with his employer—Appellant received regular annual shares of profits—Whether appellant was guilty of corruption under s 6 (a) Prevention of Corruption Act (Cap 241, 1993 Rev Ed) —Section 6 (a) Prevention of Corruption Act (Cap 241, 1993 Rev Ed)

The appellant was a senior director of Logistics at Seagate technology International (‘Seagate’) at the material time. In October 2004, Seagate invited bids for a few lucrative transport contracts. The appellant and three other individuals set up Biforst Singapore Pte Ltd (‘Biforst’) in anticipation of securing these contracts on 10 September 2004. The appellant paid $6,000 for shares in Biforst, for which he received a regular share of Biforst's profits annually in proportion to his shareholdings in Biforst. Biforst was awarded the Seagate transport contracts in 2004, 2005, 2007 and 2010. The trial judge found that the appellant had helped Biforst procure there contracts in exchange for the shares and 11 payouts from 2004 to 2010, and accordingly convicted the appellant of corruption under the Prevention of Corruption Act (Cap 241,1993 Rev Ed) (‘the PCA’). The appellant appealed.

Held, allowing the appeal:

(1) Corruption under s 6 (a) of the PCA was not made out unless the purpose of or reason for the gratification was as a reward or as an inducement for the act done. In other words, there had to be a direct causal link between the alleged gratification and the alleged acts looked at from both the receiver's and the giver's perspectives. So long as the recipient can show that there was a reasonable doubt that the payment was not received with any ulterior motive, then the Prosecution has failed to prove its case: at [8] .

(2) This applied afortiori where the case involved not a gift, but a transaction for value. Where there had been a payment for shares, the usual inference was that those shares were transferred because they had been duly paid for and not for some other reason. It was for the Prosecution to prove, beyond a reasonable doubt, that the payment was a sham and that the true purpose of the transaction was as a reward or inducement for the accused to act in the way he did. A court should be slow to find that a payment for shares was a sham or cover up, not only because of the Prosecution's heavy burden of proof, but also because this required the court to assess the value of the consideration given for the transfer of shares, a task that it could not do without evidence: at [9] .

(3) There was no evidence to show that the transaction of $6,000 for the 20,000 shares was at an under-value or was anything but an ordinary share transaction. The circumstances surrounding Biforst's incorporation point to a conflict of interest if the appellant were to acquire shares in Biforst. This was potentially a breach of fiduciary duties or of the appellant's employment agreement. This was not, however, enough to turn what would otherwise be an ordinary share transaction into a sham one and there was accordingly no objective corrupt element to the transfer: at [10] .

(4) The time between the alleged corrupt acts and the 11 payments made was incongruous and there was no other evidence adduced to show that the payments were made in exchange for the corrupt acts. The evidence thus did not show that the 11 payments were causally related to any assistance which the appellant might or might not have rendered for the 2005, 2007 and 2010 tender bids. Hence these payments could not be said to be gratification for the alleged corrupt acts: at [12] and [15] .

[Observation: In all cases of corruption, the accused would be induced to and be rewarded for acting in a manner which conflicted or appeared to conflict with his principal's affairs. However, not all conflict situations would amount to corruption under the PCA. Corruption was a narrow subset of situations which involved a conflict of interest and was defined under the PCA. The inference that suspicious activities arising from a conflict of interest had to be corrupt had to be resisted. The elements of corruption and in particular, the purpose for which a payment or gratification was made, had to be the test by which we measure whether an act was objectively corrupt or not: at [19] .]

Chan Wing Seng v PP [1997] 1 SLR (R) 721; [1997] 2 SLR 426 (refd)

Yuen Chun Yii v PP [1997] 2 SLR (R) 209; [1997] 3 SLR 57 (refd)

Prevention of Corruption Act (Cap 241, 1993 Rev Ed) s 6 (a) (consd)

Bachoo Mohan Singh (Veritas Law Corporation) for the appellant

Alan Loh and Edward Ti for the Public Prosecutor.

Judgment reserved.

Choo Han Teck J

1 The appellant was a senior director of Logistics at Seagate technology International (‘Seagate’) at the material time. He has since been dismissed from Seagate's employment. His present appeal is against conviction and sentence for 12 charges of corruption under s 6 (a) of the Prevention of Corruption Act (Cap 241,1993 Rev Ed) (‘PCA’) for having received a reward for assisting Biforst Singapore Pte Ltd (‘Biforst’) to secure contracts to provide trucking services from Seagate.

2 The usual case of corruption involves a taking of gratification by the accused. This was an unusual...