Teo Chu Ha v Public Prosecutor

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 18 September 2013
• Neutral Citation: [2013] SGHC 179
• Court: High Court (Singapore)
• Docket Number: Magistrate’s Appeal No. 279/2012/02
• Year: 2013
• Published date: 11 October 2013
• Hearing Date: 23 July 2013,03 August 2013,30 July 2013
• Plaintiff Counsel: Bachoo Mohan Singh (Veritas Law Corporation)
• Defendant Counsel: Alan Loh and Edward Ti
• Subject Matter: Criminal Law,Corruption,Prevent of Corruption Act
• Citation: [2013] SGHC 179

Choo Han Teck J:

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, Rev Ed 1993) (“PCA”) for having received a reward for assisting Biforst Singapore Pte Ltd (“Biforst”) to secure contracts to provide trucking services from Seagate.

The usual case of corruption involves a taking of gratification by the accused. This was an unusual case; instead of a straightforward taking of Biforst shares (the subject of the first charge), the appellant paid $6,000 for these shares. The appellant was then given 22.5% of the profits in regular pay-outs from 2006 to 2010 which the defence alleges represented dividends for his share in Biforst. These 11 payments are now also the subject of scrutiny in the second to twelfth charges. Because of the unusual nature of this case, I directed that the parties file and exchange further submissions on whether it was normal for gratification to take the form of shares in a company which the accused person pays for and what the significance was of the transfer of shares to an unknown nominee of the appellant’s. Having had the benefit of submissions from both sides, I now deliver my decision.

The opportunity for the incorporation of Biforst as a small private limited company came in August 2004, when Seagate’s existing trucking contract for the long haul trucking route between Singapore and Malaysia expired. Seagate wanted to award the contracts to two different vendors. Richland Logistics Services Pte Ltd (“Richland”) was the incumbent, and the point person for Richland in its Seagate trucking contracts had been one Tan Ah Kwee (“Ah Kwee”). Ah Kwee fell out with Richland management before the expiry of the Seagate contracts and left to set up his own company. He was, however, prevented from bidding for the new Seagate contracts because of a restraint of trade clause in his employment contract. Two of Ah Kwee’s men, Koh Han Lee (“Koh”) and Ng Kok Seng (“Ng”), also left Richland for Ah Kwee’s company. Both Ng and Koh were instrumental in setting up Biforst and after Biforst’s incorporation, worked for both Ah Kwee’s company and Biforst with Ah Kwee’s full knowledge. The incumbents thus became three: Ah Kwee’s company, Biforst, and the original Richland. Biforst was incorporated on 10 September 2004, just before the tender for Seagate’s trucking contract started. The tender closed on 7 October 2004.

Prior to Biforst’s incorporation, Yap Chin Guan (“Yap”), also an ex-employee of Richland, approached the appellant to sell his new transport management system. The appellant was not interested. The appellant was, however, interested to discuss the potential incorporation of a new company to take over the Seagate contracts from Richland; he wanted to get rid of Richland as the middleman in the trucking operations and to deal directly with the transport providers (represented by Ah Kwee). The trial judge (“the judge”) found that it was Yap and the appellant who had come up with the plan to incorporate Biforst and use Biforst to tender for the Seagate contracts, with the instrumental involvement of Koh and Ng. The appellant asked Yap for a share in Biforst and it was agreed that 20,000 shares would be issued to the appellant via a nominee, Ms Choo Ah Moi Winnie, upon payment by the appellant of $6,000. The appellant paid for the shares by cheque on 29 September 2004 and the shares were transferred to the appellant’s nominee on 20 December 2004. The appellant, in contravention of Seagate’s conflict of interest policy, did not disclose his beneficial interest in Biforst to Seagate.

After the tender closed on 7 October 2004, a team of Seagate staff (“the tender team”), including the appellant, rated the different vendors and Richland, Biforst and Geodis Overseas Pte Ltd (“Geodis”) rose to the top. Richland’s services would cost $1,000 more per quarter than Biforst’s, an amount which one of the tender team thought was “negligible”. Concerns were raised about Biforst’s suitability for the contract as it was a new company without the same credentials as Richland. The appellant assured the rest of the tender team that Biforst would be capable of taking up the Seagate contracts as it was essentially a “spin-off” company of Ah Kwee, with whom Seagate was familiar and who was, in turn, familiar with Seagate’s trucking routes and requirements. Seagate’s finance department also reviewed the papers and suggested an increased security deposit and/or an execution of a bank guarantee in order to address this concern. The tender team went with an increased security deposit of $200,000 (instead of the usual $100,000) and awarded the contract to Biforst and Geodis, both of whom submitted the lowest tenders. The judge found that the appellant had the power to influence, and did in fact influence, the selection process for awarding the Seagate contracts to Biforst. There was ample documentary evidence in the record to indicate that this was indeed true where the 2004 Seagate contract was concerned. I find that there was insufficient reason for me to disturb the finding of the judge in relation to the 2004 Seagate contract.

Biforst submitted successful bids in three further tender exercises in 2005, 2007 and 2010. Throughout the years 2004 to 2010, the appellant received regular pay outs from Biforst. Each pay-out corresponded to 22.5% of an amount withdrawn from Biforst’s account and marked as “director’s fees”. This 22.5% constituted the initial 20,000 shares acquired on 20 December 2004 (see above at [4]) and an additional transfer (again to the appellant’s nominee) of 2,500 shares on 1 June 2005. Two payments in 2006, three payments in 2007, three payments in 2008, one payment in 2009 and two payments in 2010 were the subject of the second to twelfth charges before the judge. It was the prosecution’s case that these payments and the shares were given as gratification for the appellant’s securing the Seagate contracts for Biforst, an act which was objectively corrupt and for which the appellant had a corrupt intent.

Section 6(a) of the PCA reads as follows:

Punishment for corrupt transactions with agents

6. If —

(a) any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gratification as an inducement or reward for doing or forbearing to do, or...