General Division of the High Court · Decided 7 April 2017

Public Prosecutor v Lam Leng Hung and other appeals

[2017] SGHC 71Case no. Magistrate’s Appeals No 147–152 of 2015/01

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Introduction and overview
[2] Around 2004, a decision was taken within the CHC leadership to expand the Crossover into the market in the United States of America (“the US”). Within a few years after the Crossover’s launch in the US, an award-winning producer, Wyclef Jean (“Wyclef”), was brought on board. Wyclef commanded substantial fees, and his participation, together with the expansion of the Crossover, led to a significant increase in the amount of funding that was necessary. This led to CHC entering into a series of transactions between 2007 and 2009 with a number of entities, namely Xtron Productions Pte Ltd (“Xtron”), PT The First National Glassware (“Firna”) and AMAC Capital Partners (Pte) Ltd (“AMAC”). We will explain the details of these transactions later in this judgment. Pursuant to these transactions, funds were transferred from CHC’s Building Fund (“the BF”) and General Fund (“the GF”) to these entities.
[3] In May 2010, the Commercial Affairs Department (“the CAD”) commenced investigations into the affairs of CHC. As a result of the investigations, six persons, Kong Hee, Lam Leng Hung (“John Lam”), Tan Ye Peng (“Ye Peng”), Chew Eng Han (“Eng Han”), Serina Wee Gek Yin (“Serina”) and Tan Shao Yuen Sharon (“Sharon”), were charged with offences of criminal breach of trust (“CBT”) relating to the above-mentioned transactions that occurred between 2007 and 2009. The latter four were also charged with falsifying certain accounts.
[4] In Public Prosecutor v Lam Leng Hung and others [2015] SGDC 326 (“the Conviction GD”) and Public Prosecutor v Lam Leng Hung and others [2015] SGDC 327 (“the Sentencing GD”), the Presiding Judge of the State Courts (“the Judge”) convicted and sentenced the six persons on all the charges preferred against them. The six persons have appealed against their conviction. They have also appealed against the sentences imposed on them on the ground that the sentences are manifestly excessive, whilst the Prosecution has appealed against the respective sentences, arguing that they are manifestly inadequate. Given the various cross-appeals, we will hereinafter refer to the parties simply as the appellants (or by their names individually) and the Prosecution, respectively.
[5] We heard these appeals over the course of five days in September 2016. We now give our judgment, which is divided into two parts. In the first part, we deal with the appellants’ appeals against conviction and in the second, we deal with the various appeals against the sentences imposed by the Judge.
Background
The appellants
[6] We begin with a brief summary of the six appellants.
[7] Kong Hee is the founder and was at the material time a senior pastor of CHC. He was the president of the CHC Management Board (“the CHC Board”) from 1992 to 10 April 2011. He is also Sun Ho’s husband and was the main decision-maker in relation to the Crossover.
[8] Ye Peng was at the material time a deputy senior pastor of CHC. He was first appointed to the CHC Board in April 1995, and was elected as the vice president in 2007.
[9] John Lam became a member of the CHC Board in 1993 and served as treasurer and secretary at various times. He also sat on CHC’s audit committee (“Audit Committee”) and the investment committee (“Investment Committee”). He was the chairman of the Investment Committee from 5 July 2007 to 1 February 2008.
[10] Eng Han became a member of CHC sometime in 1995. He was a member of the CHC Board from 25 April 1999 to 7 July 2007, over which time he held various positions such as vice-president and treasurer. He served on the Investment Committee, which was then known as the finance committee, from 2006 to 2007. Eng Han was also the sole director of AMAC and held 70% of AMAC’s shares. AMAC was registered as a limited private company on 26 April 2007 and operated an investment business. In July 2007, Eng Han resigned from the CHC Board after the CHC Board made a decision to appoint AMAC as CHC’s fund manager. Eng Han left CHC in 2013.
[12] Sharon was never on the CHC Board. She joined CHC’s accounts department on 12 January 2000 as an assistant accountant. She took over as senior accountant after Serina resigned in August 2007 and was subsequently promoted to finance manager sometime in 2008.
The charges
[13] The six appellants were convicted of 43 charges in total. These charges (which are comprehensively set out at [19]–[21] of the Conviction GD) can be broadly characterised into three categories.
[14] The first category of charges which the appellants, save for Sharon, were convicted of was referred to by the Judge as the “sham investment charges”. We will adopt the same terminology but needless to say, this is solely for convenience and reflects nothing more. These three charges pertained to the use of funds from the BF to purchase bonds from Xtron and Firna and were for the offence of conspiring to commit CBT by an agent punishable under s 409 read with s 109 of the Penal Code. The charges were brought under two different editions of the Penal Code, with the first charge being under the 1985 revised edition (ie, Penal Code (Cap 224, 1985 Rev Ed)) and the second and third charges being under the 2008 revised edition (ie, Penal Code (Cap 224, 2008 Rev Ed)). This was because the offences in the latter two charges occurred after the amendments to the Penal Code came into effect on 1 February 2008. Following the amendments, the maximum non-life imprisonment term for the offence was increased from ten to 20 years. We will refer to the different editions of the Penal Code collectively as “the Penal Code” unless the edition in question has significance.
[15] Before the Judge, the appellants raised a preliminary objection in respect of the second of the three sham investment charges. They argued that the second charge was defective because the first and second charges both related to the same conspiracy (ie, the entering into a bond agreement to use funds from the BF to purchase Xtron bonds) albeit to different drawdowns of the fund, and thus the Prosecution ought to have preferred only one charge. The Judge rejected this submission and held that each drawdown was a separate act being abetted and was thus capable of forming the subject of a separate charge (the Conviction GD at [100]–[102]). Although none of the appellants raised this preliminary objection in the hearing before us, their written submissions indicate that some of them are still pursuing this point on appeal. We do not think there is any merit to this argument. Where there are multiple acts of CBT pursuant to different transactions within the same overarching conspiracy, it does not follow that only one charge should be preferred. Each time an act of CBT is committed in pursuance of a conspiracy, that is in itself an offence and therefore a separate charge of abetment by conspiracy of CBT may be brought against the accused. The Prosecution may well decide to bring a consolidated charge against the accused and ask for a higher sentence taking into account all the acts, but it is also equally within its discretion to prefer separate charges for each act or some of the acts, as in this case.
[16] The second category of charges which the appellants, save for Kong Hee and John Lam, were convicted of is the “round-tripping charges”. These charges were similarly for the offence of conspiring to commit CBT by an agent punishable under s 409 read with s 109 of the Penal Code, and pertained to a series of transactions that was carried out between 9 April and 2 October 2009. The charges relate to the alleged misappropriation of sums from the BF and the GF for the purpose of creating a false appearance that the Firna bonds had been redeemed.
[17] These two categories of charges (ie, the sham investment charges and the round-tripping charges) will be referred to collectively in this judgment as “the CBT Charges”.
[18] The third category of charges which the appellants, save for Kong Hee and John Lam, were convicted of is the “account falsification charges”. These charges were framed under s 477A read with s 109 of the Penal Code, and pertained to the entries recorded in CHC’s accounts in October and early November 2009 for the transactions that were the subject of the round-tripping charges.
[19] As seen from above, not all the appellants are involved in all the charges. Sharon is not involved in the sham investment charges, while John Lam and Kong Hee are not involved in the round-tripping charges and account falsification charges. But for ease of reference, we will refer to the relevant appellants who were involved in each category of charges simply as “the appellants” at various parts of this judgment even though some of them may not be involved in that particular category of charges.
[20] The facts relating to the various charges have been extensively set out by the Judge at [23]–[91] of the Conviction GD. We set out in the following section a brief summary of the facts that are relevant for consideration in the appeals.
The facts
The inception of the Crossover and its launch in the US
[21] As stated above, the Crossover – which is central to the entire case – is an evangelistic endeavour to spread the gospel through the secular music of Sun Ho. It is not disputed that the Crossover had the full support of the CHC Board. The minutes of the CHC Board’s meeting on 5 May 2002 expressly recorded that the board unanimously agreed that it would be “consistent with the overall objective of [CHC] to fulfil the Great Commission … by sharing the message of faith, hope and love throughout the Chinese Community worldwide particularly in Far East Asia”. Between 2002 and 2005 when the Crossover was focused on only the Asian market, Sun Ho released five Mandarin pop albums, titled “Sun with Love” (2002), “SunDay” (2002), “Lonely Travel” (2003), “Gain” (2004), and “Embrace” (2005).
[22] In 2001 and 2002, the Crossover was directly funded by CHC. This was the case until the middle of January 2003, when Roland Poon, an ordinary member of CHC, alleged that CHC was giving excessive attention to Sun Ho and was misusing its funds in connection with her. Besides the CHC Board publishing a written response in a local newspaper stating that church funds had not been used to purchase Sun Ho’s albums or to promote her career, Kong Hee also told the executive members of CHC (“the EMs”) at an annual general meeting on 27 April 2003 that no church funds had been used for the Crossover. It cannot be disputed that this was not true. He explained that the monies ($1.27m) that had been set aside for the promotion of Sun Ho’s albums had in fact come from the family of a church member, Wahju Hanafi (“Wahju”), an Indonesian businessman who was also a member of CHC.
[23] After the incident concerning Roland Poon, CHC began to place some distance between itself and the Crossover in a bid to avoid negative publicity. This eventually led to the concept and creation of Xtron a few months later on 18 June 2003. John Lam, Eng Han and Eng Han’s wife were its founding directors and shareholders. On the same day, Xtron entered into an artiste management agreement with Sun Ho.
[24] Xtron obtained funding to finance Sun Ho’s secular music activities from various sources, including (a) donations, which were often made in lieu of contributions to the BF; and (b) revenue directly from CHC. The latter often took the form of fees for the sub-leasing of a hall at the Singapore Expo (“Expo”) from Xtron for CHC’s weekend services or, starting from January 2006, for the provision of events management and audio-visual and lighting services to CHC. The audio-visual and lighting staff of Xtron were in fact originally from CHC but were transferred to Xtron in January 2006.
[25] In early 2003, Kong Hee saw an opportunity for the Crossover to extend to the US. He started communicating with a producer, Justin Herz (“Justin”). Sun Ho released two English songs in the US which met with some success. Initially, the plan was for Sun Ho to release an album by March 2006, but this did not materialise.
The Crossover’s need for funding and the entry into the Xtron bonds
[26] In May 2006, Wyclef was engaged as an executive producer. As stated in the introduction to this judgment, Wyclef’s fees contributed to a significant increase in the amount of money needed to fund the Crossover. In this context, Kong Hee, Ye Peng and Eng Han began to consider methods to obtain more funding for the Crossover. They initially contemplated taking loans from two banks, Citic Ka Wah Bank Limited (“Citic Ka Wah”) in Hong Kong and UBS AG (“UBS”). But this plan was later abandoned because the interest rates charged by the banks were thought to be too high. In the minutes of a meeting of Xtron’s board dated 5 May 2007, it was recorded that Citic Ka Wah had offered a loan of $9m at an interest rate of 16% per annum but the Xtron directors concluded that the interest rate was “too high and agreed to source for other credit facilities”. Around this time, there was also some talk about whether Xtron should take a loan of $2.5m from the BF.
[28] In or about the end of June 2007, Eng Han came up with the idea of obtaining financing for the Crossover through Xtron obtaining a loan from the BF. The idea was that Xtron would issue bonds which CHC would purchase with funds from the BF. The bonds could then be considered an investment from the BF in Xtron. Against this backdrop, steps were taken to obtain approval for the investment of the monies in the BF. The Investment Committee (previously known as the finance committee), which then comprised Ye Peng, Eng Han, John Lam, Serina, and another member of CHC known as Charlie Lay, was mobilised to draft an investment policy which would set out the types of investments that CHC should invest in. Not all the members in the Investment Committee were aware that one of the purposes of the investment policy was to allow CHC to purchase the Xtron bonds. John Lam was tasked to take the lead in drafting the investment policy, which he forwarded to Eng Han, Serina and Charlie Lay on 27 June 2007 for their comments. On 28 June 2007, the Investment Committee discussed and approved the investment policy. The investment policy provided as follows:
The investment policy also set out limits to the allocation to each asset class of financial instruments and provided that CHC could invest up to a maximum of 100% of its total portfolio into “SGD denominated fixed income”.
[29] On 5 July 2007, John Lam presented the investment policy to the CHC Board for consideration. The CHC Board unanimously approved it as being beneficial to the church. Kong Hee sought the approval of the EMs for the investment of money from the BF at an extraordinary general meeting (“EGM”) two days later, on 7 July 2007. He explained that CHC was unlikely to find a building to acquire any time soon, and it would thus be better to invest the money to generate financial returns than to leave the money sitting untouched in the BF. Eng Han also gave a short presentation at this EGM, explaining the parameters of the investment policy. It was announced that CHC would appoint AMAC – where Eng Han was a director and major shareholder – as fund manager to manage the initial sum of $25m from the BF that would be invested. The resolution was passed and CHC appointed AMAC as fund manager by an agreement dated 25 July 2007. There was no mention of Xtron, the potential investment into Xtron bonds or the Crossover at this EGM.
[31] From August 2007 to March 2008, $13m was transferred from the BF to Xtron in four tranches: (a) $5m in August 2007; (b) $2m in November 2007; (c) $3m in January 2008; and (d) $3m in March 2008. These transfers are the subject of the first two sham investment charges (see [14] above). These monies were used, as intended, on the Crossover.
[32] On 21 April 2008, Xtron and AMAC entered into a second bond subscription agreement (“the 2nd Xtron BSA”). This agreement was entered into pursuant to discussions to obtain more funding for Xtron. No money was drawn down under this agreement, presumably because of a subsequent change in plans.
The change in plans and the entry into the Firna bonds
[33] In mid-2008, the audit fieldwork for Xtron’s financial year ending 31 December 2007 took place. In the course of this audit, two principal concerns were raised by the auditors. The first was that the value of the Xtron bonds might have to be written down in Xtron’s financial statements, given Xtron’s consistently loss-making position. The second concern was that CHC and Xtron might be considered related parties and as such, the accounts of both CHC and Xtron might have to be consolidated. The appellants claim that they did not want such a consolidation and disclosure because it would undermine the discreet manner in which CHC was funding the Crossover.
[34] On 21 July 2008, Serina met with Foong Daw Ching (“Foong”), a senior partner of the accounting firm, Baker Tilly Consultancy Pte Ltd (“Baker Tilly”), to discuss these concerns. In an email dated 24 July 2008, she set out the various matters that were discussed. According to her, Foong had raised, among other things, the following issues: (a) as long as there was uncertainty of repayment, there would have to be impairment of the Xtron bonds; (b) CHC would have to disclose that it subscribed for bonds in a company “in which a key employee is related to one of CHC’s Management Board members”; and (c) Sun Ho was a “key player” in Xtron, so the auditors required disclosure of all transactions between Xtron and CHC. It thus appeared that as long as Sun Ho was managed by Xtron, CHC would be required to disclose this information.
[36] At the same time, a plan for Xtron to purchase a commercial building in Singapore known as “The Riverwalk” was being developed. Under this plan, CHC would provide part of the purchase price by purchasing $5.2m worth of new bonds from Xtron and the outstanding amount would be financed by a bank loan secured by a mortgage over The Riverwalk.
[37] On 10 August 2008, Kong Hee told the EMs at an EGM about Xtron’s plan to purchase The Riverwalk. This was apparently the first time that the EMs had been informed about the existence of Xtron. They were told that Xtron had been set up in 2003 by three members of CHC to own and manage future buildings that CHC could consistently use. They were also told that AMAC had advised CHC to purchase $18.2m of bonds with an expiry date of ten years from Xtron. Notably, there was no mention of the plan to purchase Firna bonds or the fact that Xtron would be taking a bank loan to partially finance its purchase of The Riverwalk. On 11 August 2008, Xtron exercised its option to purchase The Riverwalk.
[38] On 20 August 2008, Xtron and AMAC terminated the 2nd Xtron BSA via a deed of termination, and AMAC transferred the $13m worth of bonds issued under the 1st Xtron BSA to the trustees of CHC via a deed of assignment. The trustees executed a deed of ratification and accession under which they agreed to be bound by the terms of the 1st Xtron BSA. On the same day, Xtron and the trustees of CHC, through AMAC as attorney, entered into an amended bond subscription agreement (“the ABSA”). Under the ABSA, the maximum amount of funding to be made available to Xtron was increased from $13m to $25m, and the stated interest rate was decreased from 7% to 5%. Importantly, the maturity date of the bonds was pushed back from two years of the date of issue to ten years.
[39] Two months later, on 7 October 2008, CHC and Firna entered into a bond subscription agreement (“the Firna BSA”). The agreement was that CHC would subscribe from Firna a maximum of $24.5m in bonds that would mature in three years and yield an interest at a rate of 4.5% per annum. Firna was to use the bond proceeds “for general working capital”. The plan of Eng Han, Ye Peng and Serina was to use the Firna bonds to fund the Crossover in the following way: (a) CHC would pay money to Firna for the bonds; (b) thereafter, Firna would transfer the money to UA; and (c) lastly, UA would transfer the funds to Justin’s company for the Crossover.
[41] From October 2008 to June 2009, $11m was transferred from the BF to Firna pursuant to the Firna BSA. This was done in five tranches. These transfers are the subject of the third of the sham investment charges. It is undisputed that out of this $11m, about $7.56m was used for the Crossover and $2.5m was used by Wahju for his personal expenses.
Plan to redeem the Xtron and Firna bonds and the “round-tripping” transactions
[42] On 9 April 2009, which was before the last two (of the five) tranches of transfers under the Firna bonds took place, Sharon, Ye Peng and John Lam met with the engagement partner from Baker Tilly, Sim Guan Seng (“Sim”), to discuss CHC’s audit matters. Ye Peng and John Lam both left at some point in the meeting, but Sharon was there throughout.
[43] Following this meeting, Ye Peng and Sharon (as well as Eng Han and Serina who were later informed of what transpired at the meeting) decided that the Xtron and Firna bonds had to be redeemed before the end of CHC’s financial year (ie, 31 October 2009). The Prosecution argues that this was because they feared that Sim would continue questioning the bonds as long as they remained on CHC’s accounts and that this would eventually lead to the true nature of the bonds being exposed. The defence argues, instead, that the plans to have those bonds redeemed were because Sim had taken issue with the difficulty of valuing the bonds, both of which were unquoted and not traded on the open market.
[44] Ye Peng, Sharon, Eng Han and Serina then devised various plans to redeem the Xtron and Firna bonds. Around this time in early 2009, CHC was also actively sourcing for a building suitable for its church services. Eng Han played a key role in these efforts, and a number of sites, such as the Capitol Theatre, Suntec City and the Singapore Flyer, were identified as suitable acquisition targets. In June 2009, CHC (through Eng Han) made an unsuccessful bid for Suntec City. Subsequently in September 2009, concurrent discussions concerning CHC’s bid for the land at Capitol Theatre and a stake in Suntec City took place. As the Judge noted at [83] of the Conviction GD, some of the plans to redeem the Xtron bonds overlapped with the plan for Xtron to purchase a building for CHC’s benefit. Pursuant to this plan, CHC was to pay Xtron advance rental so as to put Xtron in funds to purchase a property for CHC’s benefit. Xtron would then lease the property back to CHC. In reality, the advance rental which CHC was to pay Xtron provided the eventual source of funds for the redemption of the Xtron and Firna bonds.
(a) On 2 October 2009, CHC transferred $5.8m from the BF to AMAC as payment for Tranche 10 of a Special Opportunities Fund (“SOF”) administered by AMAC, which was recorded in CHC’s General Journal under the accounts name “Investment” as a payment of $5.8m to AMAC as “Investment–Special Opportunity Fund”. By way of background, the SOF was an on-going fund set up by AMAC in 2009. This fund comprised several tranches by which AMAC guaranteed the principal and a fixed return to a client who invested in a particular tranche. For Tranche 10 of the SOF, the stated period of investment was from 2 October to 25 November 2009 with a fixed return of 5.05% per annum.
(b) On 5 October 2009, AMAC transferred $5.8m to UA. UA received the sum (less a telegraphic transfer fee of $20) on 6 October 2009, and transferred $5.3m to Firna on 7 October 2009. On 9 October 2009, Firna transferred $5,228,750 to CHC, which was recorded in CHC’s books as a partial redemption of the Firna bonds.
(c) On 15 October 2009, CHC transferred $5.6m from the GF to AMAC as payment for Tranche 11 of the SOF, which was recorded as “Special Opportunity Fund” under the accounts name “Investment” in CHC’s accounts. AMAC transferred this sum (less a telegraphic transfer fee of $20) to UA on 16 October 2009. Tranche 11 of the SOF was to run from 15 October to 25 November 2009 and provided for a return rate of 5.05% per annum. On 20 October 2009, UA transferred $6.1m to Firna, and Firna transferred $6,061,950 to CHC, which was recorded in CHC’s books as redemption of the remaining Firna bonds with interest.
(d) Sometime after 15 October 2009, CHC signed an Advance Rental License Agreement dated 1 October 2009 with Xtron (“the ARLA”). Under the ARLA, CHC would have the right to use and occupy the premises provided by Xtron for eight years, in return for the payment of advance rental of $46.27m to Xtron. A further $7m was paid to Xtron as a security deposit, making the total sum under the ARLA approximately $53.27m. On 31 October 2009, an entry was made in CHC’s General Journal describing a set-off of $21.5m from the sum due to Xtron under the ARLA as “Redemption of Xtron Bonds”.
(e) On 6 November 2009, CHC transferred $15,238,936.61 to Xtron. This payment was described in CHC’s accounts as “Advance rental with Xtron”. Of this sum, $12m was for part payment of the advance rental under the ARLA with the remaining sum of $3,238,936.61 being Goods and Services Tax (“GST”) for the advance rental.
(f) On 1 December 2009, Xtron transferred $11.455m to Firna pursuant to a bond subscription agreement dated the same day between the two entities. Firna then transferred a total of $11.476m to UA over three tranches between 4 and 11 December 2009. On 15 and 28 December 2009, UA transferred a total of $11.476m to AMAC in two tranches. On 16 December and 29 December 2009, AMAC transferred sums to CHC in respect of Tranches 10 and 11 of the SOF. CHC received a total of $11,476,625, comprising $11.4m in principal and $76,625 in interest.
Like the Judge, we collectively refer to these transactions as “the round-tripping transactions”.
[46] The net result of the round-tripping transactions – parts of which were the subject of the round-tripping charges and account falsification charges – was that the Xtron and Firna bonds were redeemed. Through the transactions, AMAC’s liability under Tranches 10 and 11 of the SOF was also discharged. In essence, the liability owed by Xtron and Firna to CHC under the relevant bond subscription agreements was transferred to a liability on Xtron’s part to provide premises to CHC under the ARLA. It appears that subsequently, pursuant to the ARLA, Xtron provided CHC with premises at the Expo for a period of time.
Events in 2010
[47] Thereafter, in January 2010, CHC acquired a stake in Suntec City through the purchase of 12.5% of the shares in another company, Harmony Partners Investment Limited, for $18.75m. Subsequently, the ARLA was terminated on 31 March 2010. On 31 May 2010, the CAD commenced investigations and raided the offices of CHC, Xtron and some other companies as well as the residences of the appellants.
[48] On 1 August 2010, CHC convened an EGM, where the EMs retrospectively approved CHC’s use of the BF to (a) subscribe to the Xtron bonds; (b) subscribe to the Firna bonds; and (c) pay the advance rental and security deposit amounting to $53.3m to Xtron to secure an auditorium space for CHC for a period of eight years (ie, the ARLA). The EMs also approved the continuation of the Crossover and authorised the CHC Board to support the mission. Effectively, CHC was seeking to ratify the transactions that had taken place and which were the subject of the investigations.
[49] On 4 October 2010, Xtron repaid CHC a total of $40.5m which was due as the ARLA had been terminated. This comprised (a) $33,039,117.60 being the unutilised advance rental; (b) $7m being the full amount of the security deposit paid by CHC; and (c) $453,103.02 being the interest accrued from the date of termination of the ARLA until full payment was made. Xtron appeared to have been put into funds to effect repayment through the obtaining of loans from various individuals.
Part I: The appeals against conviction
[50] Having set out the background, we now turn to consider the appellants’ appeals against their convictions. At the outset, we emphasise that an appellate court has a limited role in disturbing the findings of fact made by a trial court, especially where these are based on an assessment of the witnesses and their credibility. Thus, unless these findings can be shown to be plainly wrong or against the weight of the evidence, an appellate court would be slow to overturn the trial judge’s findings of fact.
The decision below on conviction
The CBT Charges
[51] The Judge approached the analysis of the CBT Charges by identifying the elements that the Prosecution was required to prove. He held that there were five elements, being that:
(a) the relevant appellants who were on the CHC Board were entrusted with dominion over CHC’s funds;
(b) such dominion was entrusted to them in the way of their business as agents;
(c) things were done that constituted a “wrong use” of CHC’s funds;
(d) each of the appellants played some role in the things done; and
(e) each of the appellants acted dishonestly in doing so.
[52] As to the first element, the Judge held that John Lam, Kong Hee and Ye Peng had been entrusted with dominion over CHC’s funds by reason of their membership of the CHC Board. He also held that John Lam, Kong Hee and Ye Peng had been entrusted with the funds in the way of their business as agents and thus fell under s 409 of the Penal Code. In this regard, the Judge held that he was bound by the decision of the High Court in Tay Choo Wah v Public Prosecutor [1974–1976] SLR(R) 725 (“Tay Choo Wah”) where it was decided that directors who were entrusted with property in the course of their duties as directors would have been entrusted with the property in the way of their business as agents.
[53] Having established the first two elements, the Judge then analysed whether the application of CHC’s funds towards (a) the Xtron bonds; (b) the Firna bonds; and (c) the round-tripping transactions constituted a “wrong use” of CHC’s funds. In respect of the Xtron and Firna bonds, the question of “wrong use” of the BF turned on whether the Xtron and Firna bonds could be considered investments. He held that:
(a) The Xtron bonds constituted a “wrong use” of the BF because the Xtron bonds were not a genuine investment. Instead, the transaction was a “temporary loan” of money from the BF to Kong Hee to use in respect of the Crossover (the Conviction GD at [153]).
[54] In respect of the round-tripping transactions, the considerations were slightly different. The Judge held that:
(a) Tranche 10 of the SOF constituted a “wrong use” of the BF because it was not a genuine investment. It was instead part of an overall scheme to substitute one debt owed to CHC (ie, the Firna bonds) with another debt owed to CHC (ie, under the AMAC SOF) (the Conviction GD at [174]).
(b) Tranche 11 of the SOF was disbursed from the GF, which was not a restricted fund like the BF. However, this also constituted a “wrong use” because it was not a genuine investment and, in any case, the GF could not be used for the perpetration of fraud (the Conviction GD at [174] and [178]).
(c) The disbursement of approximately $15m under the ARLA was a “wrong use” of the BF because it was not a property- or building-related expense. It was a device to repay the Tranches 10 and 11 of the SOF (the Conviction GD at [175]).
[55] With the above having been established, the Judge turned to consider whether the Prosecution had proven that the appellants had participated in the plans to an extent that they could be said to have engaged in a conspiracy to put CHC’s funds to wrong use, and whether they acted dishonestly in doing so. In relation to the issue of dishonesty, the Judge’s approach was to decide if (a) the appellants intended to put CHC’s funds to uses which amounted to wrong uses of those funds; and (b) the appellants did so knowing that they were not legally entitled to use the funds in that manner.
[56] The Judge considered the appellants’ argument that the critical fact that exonerated them was that they did not keep the relevant transactions hidden from the professionals who were advising them. However, the Judge was not persuaded by this argument because he found that they had not been “open” with the professionals. In this connection, he found that:
(a) In relation to the Xtron bonds, the auditors and lawyers did not know that Xtron was controlled by Kong Hee and the other appellants, and that the directors of Xtron were merely figureheads (the Conviction GD at [207] and [212]).
(b) In relation to the Firna bonds, the auditors and lawyers did not know that (i) Kong Hee and those assisting him had full control over the Firna bond proceeds and treated the monies as theirs; and (ii) neither Firna nor Wahju was truly responsible for redeeming the Firna bonds (the Conviction GD at [220]).
(c) In relation to the round-tripping transactions, the Judge held that the substance of the transactions was not disclosed to the lawyers or auditors (the Conviction GD at [230]).
[57] Finally, the Judge analysed the facts concerning each appellant, and held that they had been proven beyond reasonable doubt to have been involved in the conspiracy with the requisite dishonest mens rea. He therefore convicted them on the respective CBT Charges that have been brought against them. We elaborate on the Judge’s findings in the various sections below.
The account falsification charges
[58] On the charges relating to account falsification, the Judge’s approach was to determine (a) if the accounting entries were false; (b) whether each of the appellants who had been charged for this category of offences engaged in a conspiracy for the doing of a thing that amounted to making a false entry in CHC’s accounts; and (c) whether each of those appellants acted with an intent to defraud. On each of the elements, the Judge held that:
(a) The relevant accounting entries, involving (i) Tranches 10 and 11 of the SOF; (ii) the payment of approximately $15m under the ARLA; and (iii) the redemption of the Xtron bonds, were false (the Conviction GD at [447] and [452]).
(b) The appellants had a common design to remove both the Xtron and Firna bonds from CHC’s accounts, satisfying the requirement of engagement in a conspiracy (the Conviction GD at [448] and [453]–[454]).
(c) The appellants acted with an intention to defraud as they knew that the various transactions were meant to create false appearances (the Conviction GD at [449] and [458]).
The Judge thus convicted the relevant appellants on the account falsification charges.
The CBT Charges
The elements of an offence of CBT
[59] We begin our analysis with a consideration of the CBT Charges. Under these charges, the appellants were charged for abetment by engaging in a conspiracy to commit CBT as agents punishable under s 409 and s 109 of the Penal Code. CBT is defined in s 405 of the Penal Code and abetment by conspiracy is defined in ss 107(b) of the same. Sections 107(b), 109, 405 and 409 of the Penal Code provide as follows:
[60] To be guilty of a CBT charge, an accused must be proven to have (a) dishonestly misappropriated property; (b) dishonestly converted property to his own use; (c) dishonestly used or disposed of property in violation of any laws or directions; or (d) wilfully suffered any other person to do any of the acts in (a)–(c) above. The Prosecution’s case is based only on the actus reus of misappropriation (ie, (a) above), and we thus focus only on that in our analysis below.
[61] As for the element of abetment by conspiracy, it has been held in various cases that abetment by conspiracy requires “proof of a criminal conspiracy coupled with proof of some further act which has been done in pursuance of that conspiracy” (Er Joo Nguang and another v Public Prosecutor [2000] 1 SLR(R) 756 (“Er Joo Nguang”) at [29]). Thus, the mere entering into a conspiracy is insufficient to prove abetment by conspiracy (see also Chai Chien Wei Kelvin v Public Prosecutor [1998] 3 SLR(R) 619 at [76]; Lee Yuen Hong v Public Prosecutor [2000] 1 SLR(R) 604 at [38]). Three elements must be shown:
(a) the person abetting must engage with one or more other persons in a conspiracy;
(b) the conspiracy must be for the doing of the thing abetted; and
(a) the relevant appellants were entrusted with dominion over CHC’s funds;
(b) this entrustment was in the way of the relevant appellants’ business as agents;
(c) monies from CHC’s funds were misappropriated for various unauthorised purposes in pursuance of a conspiracy to misuse CHC’s funds;
(d) the appellants abetted each other by engaging in the above conspiracy to misuse CHC’s funds; and
(e) the appellants acted dishonestly in doing so.
[63] The appellants raise the following legal arguments in relation to each of the issues:
(a) The Judge was wrong to find that the relevant appellants, namely, Kong Hee, Ye Peng and John Lam, had been entrusted with dominion over CHC’s funds because they were not able to deal with CHC’s funds on their own.
(b) Even if Kong Hee, Ye Peng and John Lam had been entrusted with dominion over CHC’s funds, they were not entrusted with the funds “in the way of [their] business as … agent[s]” under s 409 of the Penal Code.
(c) The Xtron and Firna bond transactions and the round-tripping transactions were genuine investments or involved building-related expenses and were thus not a misappropriation or misuse of CHC’s funds.
(d) The appellants had acted in good faith and had not intended to cause CHC to suffer any wrongful loss. By virtue of this, they could not be considered to have acted dishonestly.
[64] Besides these broad legal arguments, the appellants argue that the Judge did not give sufficient weight to various facts, including their disclosures to the professionals, which demonstrated that they genuinely believed they were on firm legal footing when they carried out the transactions. In respect of John Lam and Sharon, arguments were also made that they were not participants in the conspiracies to misuse CHC’s funds. We deal with each of these broad arguments and examine the specific arguments and factual circumstances concerning each appellant’s involvement in the various transactions in the sections below.
Whether the relevant appellants were entrusted with dominion over CHC’s funds for the purposes of the CBT Charges
[65] Dominion is an essential element that needs to be established in each of the CBT Charges. The sham investment charges allege that Kong Hee, Ye Peng and John Lam were entrusted with dominion of the BF by virtue of being members of the CHC Board. The round-tripping charges allege that Ye Peng was entrusted with the dominion of the funds of CHC as a member of the CHC Board.
[66] It is undisputed that the CHC Board as a whole was, and is, entrusted with dominion over CHC’s funds. Nor is it disputed that the appellants did not form a majority on CHC’s board. The specific issue which arises in this case is whether Kong Hee, Ye Peng and John Lam could be said to have been entrusted with dominion over CHC’s funds for the purposes of the CBT Charges by reason only of their membership on the CHC Board.
[67] On appeal, the appellants raise the same arguments as they did before the Judge. In essence, they argue that dominion over property requires the accused to have total or effective control over the property in question. They submit that dominion for the purposes of the CBT Charges refers to the ability of one or more persons to exercise total or effective control over the property (such as a situation where a number of people may singly operate a bank account) and does not include a situation where a person can only deal with the property when acting in conjunction with other persons. They submit that whether an accused person has total or effective control over property is a question of fact. On the facts, they argue that the element of dominion over property is not satisfied because the appellants did not have de facto control over CHC’s funds and required the consent of other independent persons (who exercised independent judgment) to exercise control over CHC’s funds. Thus, the appellants argue that it was only the CHC Board as a whole that was entrusted with dominion over CHC’s funds.
[68] In response, the Prosecution submits that the appellants have confused the concept of dominion over property with the exercise of that dominion. In the Prosecution’s submission, dominion over property for the purposes of CBT does not require total control. The fact that the relevant appellants were on the CHC Board vested in them a degree of control and influence over CHC’s funds, and this would be sufficient to show that the appellants had dominion over the property.
[69] The amicus curiae, Mr Evans Ng (“the amicus”), submits that the question of whether a person has dominion over property is a question of fact which depends on the degree of control exercised by the person over the property. In a scenario where both the consent of X and Y are required to dispose of a property, the amicus submits that prima facie neither X nor Y alone has dominion over the property. However, if as a matter of fact, Y would always give approval for X to dispose of the property, then it can be said that X has dominion over the property even in the absence of a conspiracy with Y. However, if the position were to be that Y independently exercised his judgment without abetment on the part of X, the amicus submits that it is highly arguable that X had no dominion over the property, even if in that instance Y had given acquiescence to X’s advantage.
[70] It is well-established that the factor that determines whether there has been entrustment with dominion over property is the “degree of control exercised by the accused” (see Hon Chi Wan Colman v Public Prosecutor [2002] 2 SLR(R) 821 (“Hon Chi Wan”) at [48] and Sarjit Singh s/o Mehar Singh v Public Prosecutor [2002] 2 SLR(R) 1040 at [20]). In this connection, it has also been established that “a general degree of control can amount to dominion over a property” (see Hon Chi Wan at [50]). In the present case, it is clear that as directors of the CHC Board, Kong Hee, Ye Peng and John Lam had some control over CHC’s funds. The question to be decided is whether, as a matter of law, that degree of control that the relevant appellants possessed as directors of the CHC Board was sufficient to satisfy this element of the CBT Charges. This requires the court to interpret the scope of the CBT offences under the Penal Code which in turn would further require the court to consider how the purposive interpretation mandated in s 9A(1) of the Interpretation Act (Cap 1, 2002 Rev Ed) should be applied in relation thereto.
[71] We therefore begin our analysis with a consideration of the purpose or object behind the CBT offences in the Penal Code. In Hon Chi Wan, Yong Pung How CJ stated that the “essence of the offence [of CBT] lies in the entrustment of property to an employee and his subsequent betrayal of that trust” (at [54]). Similarly, in Walter Morgan and A G Macpherson, Indian Penal Code (Act XLV of 1860) With Notes (G C Hay & Co, 1861) at p 364, the learned authors observed that the offence of CBT involved a “fraudulent appropriation of property”. The authors went on to note that what distinguishes the offence of CBT from other property offences is that CBT “is not originally a wrongful taking or moving as in theft, but the offence consists in a wrongful appropriation of property, consequent upon a possession which is lawful”. In this regard, it is also useful to refer to C K Thakker et al, Ratanlal & Dhirajlal’s Law of Crimes: A Commentary on the Indian Penal Code, 1860 vol 2 (Bharat Law House, 26th ed, 2007) at p 2284, which states:
It is therefore clear that the conduct which the offence of CBT prohibits is a situation where a person who lawfully possesses property belonging to another, in breach of directions or without authorisation, dishonestly misappropriates, converts to his own use, uses or disposes of that property. In other words, the purpose of an offence of CBT is to criminalise a dishonest betrayal of original trust. Whilst all the illustrations to s 405 of the Penal Code appear to deal with a situation where an accused has sole or total control over the property in question, it is a well-established principle that the illustrations in the Penal Code “exemplify the practical applications of the provision in relation to particular hypothetical problems that may arise” [emphasis added] (see Public Prosecutor v Li Weiming [2014] 2 SLR 393 (“Li Weiming”) at [82]) and ought not to be construed as an exhaustive list of situations wherein the offence might be applicable.
[72] Having regard to the above, what is essential for the purposes of a CBT charge is that the accused has betrayed the trust originally reposed in him. Applied to the context of directors within a board, a director who applies his influence and vote on the board in a dishonest manner in pursuance of a conspiracy to misuse the property entrusted to the board is no less guilty of a breach of trust even if the other directors on the board who acted in accordance with the dishonest director were not privy to the conspiracy or his dishonest intention. As Yong CJ pithily put it in Hon Chi Wan, though in a slightly different context (at [54]):
[73] We briefly explain the facts of Hon Chi Won. In that case, the accused was the regional service logistics manager and the accessories sales and marketing manager of a communications company. His responsibilities included the requisitioning of inventory, although the other employees of the company were also able to requisition for the goods. The accused was charged for committing CBT by conspiring with a colleague to sell the company’s goods illicitly. The accused submitted that he had not been entrusted with dominion over the property because he did not have sole dominion over them. Yong CJ rejected this argument, holding that sole dominion was not a necessary condition to establishing the offence of CBT. On the facts, it was held that once the fact of the accused’s position as service logistics manager was established, the accused’s dominion over the relevant property was also established.
[74] We recognise that the situation in Hon Chi Won is not on all fours with the present case. However, what may be gleaned from the decision is that the concept of dominion is not a narrow one, and that where dominion over property is concurrently exercised by a number of individuals, this suffices for the purposes of the offence of CBT.
[75] In our view, it would also be consistent with the purpose undergirding the offence of CBT to hold that an accused would have dominion over property even where that dominion is exercised collectively or in conjunction with a number of other individuals.
[76] We find support for this approach in the decision of the Indian Supreme Court in R K Dalmia v Delhi Administration AIR 1962 SC 1821 (“Dalmia”). In Dalmia, the second accused, Chokhani, was an appointed agent of the company at the material time. By a directors’ resolution, Chokhani and the secretary and chief accountant, Raghunath Rai, were jointly authorised to operate the current account of the company. The court held that the “modus operandi of the joint operation of the bank account by Chokhani and Raghunath Rai amounted, in practice to Chokhani’s operating that account alone” (at [13]) because Raghunath Rai had signed a number of blank cheques. The appellants rely on this to argue that the element of entrustment with dominion is satisfied only if the second accused had total or effective control over the bank accounts. However, in our view, this would be an inaccurate reading of Dalmia. We refer to the following remarks of the Indian Supreme Court (at [79] and [83]–[84]):
From the above passage, it may be observed that the Indian Supreme Court considered that it was pursuant to the directors’ resolution that Chokhani obtained dominion over the funds. The reasoning in Dalmia is therefore in line with the proposition that an accused may have dominion over property even though that dominion could only be exercised in conjunction with another.
[78] We now turn to consider the cases that the appellants have cited in an attempt to argue against this position.
[79] The first case is the decision of the Kuala Lumpur court in Chang Lee Swee v Public Prosecutor [1985] 1 MLJ 75 (“Chang Lee Swee”). The accused there was an executive director of a company. He transferred certain funds without the approval of the board of directors. The Prosecution in Chang Lee Swee argued that once the accused was appointed as an executive director in-charge of finance, he was entrusted with the company’s funds (at 77). The court held that this was not the case, because of a board resolution that appointed another person referred to as “Tan” as the managing director. The court held that (at 80):
[80] As is apparent from the above, but for the resolution appointing Tan as the managing director, the court would have held that the board of directors was entrusted with the funds of the company. However, the resolution modified the state of affairs and entrusted Tan with the power to manage the funds of the company instead. In these circumstances, the board no longer had any dominion over the company’s property. Chang Lee Swee thus does not stand for the proposition that an accused who exercises collective dominion over property with other persons lacks dominion over the property for the purpose of a CBT charge.
[81] Chang Lee Swee was cited in the case of Tan Liang Chew and others v Public Prosecutor [1997] 5 MLJ 338 (“Tan Liang Chew”), which was heard by the Malaysian High Court at Kuala Lumpur. In Tan Liang Chew, the first accused, a director of a society, was charged with CBT as an agent. Besides being a director of the society, the first accused was also a member of a committee that recommended to the board whether applications for housing loans should be approved. An ineligible person applied for a loan, which the committee recommended to be approved despite his ineligibility. However, even before the board of directors considered the application, a cheque signed by the first accused (and co-signed by the second and third accused) was issued. KC Vohrah J acquitted the first accused, stating (at 349C):
[82] On its face, Tan Liang Chew may appear to stand for the proposition that it is the board of directors that is entrusted with the society’s property, and that the first accused’s position as a director was not sufficient to establish the element of entrustment with dominion. However, on closer analysis, we do not think that Tan Liang Chew assists the appellants. It must be recalled that in that case, a loan could only be issued after it had been approved by the board of directors. In breach of this, the first accused signed a cheque for the disbursement of the loan. He was charged with misappropriating the sums disbursed under that cheque. Critically, there was also no evidence that the board of directors was vested with the power to deal with the society’s property other than to issue approval for housing loans. In such circumstances, the first accused’s signing of the cheque was an unauthorised and illegitimate act on his part. The money which found its way into the hands of the first accused, and for which he was charged for misappropriating, was thus not obtained lawfully. Evidently, such a scenario would not satisfy the elements of a CBT offence, which as explained above, requires the accused to come into possession of the property lawfully. But in any case, we agree with the Judge that the court in Tan Liang Chew does not seem to have considered the specific issue of whether a single director, as opposed to the board of directors as a whole, has dominion over the property of the company or society. As the Judge noted in the Conviction GD at [108], the court in Tan Liang Chew did not appear to have addressed the question of whether the first accused could be said to have been entrusted with dominion over the money by virtue of his directorship. While the court did note that the first accused was a director of the society, it did so only in the context of ascertaining whether the element of being entrusted with property in the way of his business as an agent is made out. In answering the question of whether the first accused had been entrusted with dominion over property, the court seemed to have focused only on his capacity as a member of the committee that made recommendations on housing loan (see the quote in the preceding paragraph). Given this, we agree with the Judge that little, if any, weight can be placed on this authority.
[83] Another case that the appellants rely on is a decision of the Johor Bahru High Court in Yap Sing Hock and another v Public Prosecutor [1991] 2 MLJ 334 (“Yap Sing Hock”). That was a case where the first and second accused persons were principal directors and shareholders of a company, Yap Sing Hock Holdings Sdn Bhd (“Holdings”). Holdings entered into a sale and purchase agreement to purchase another company, Lien Hoe Sdn Bhd (“Lien Hoe”), but it transpired that Holdings did not have sufficient funds to do so. The accused persons then devised a plan for Lien Hoe to provide financial assistance to Holdings for the purchase. As part of the plan, the accused persons were appointed as directors of Lien Hoe, while the previous set of directors resigned, and a resolution was passed to make them signatories of Lien Hoe’s bank accounts and to give them authority to use three fixed deposit receipts as security for an overdraft. The funds obtained were transferred to Holdings’ account and were used to complete the purchase. The court held that the accused persons, who were charged for CBT for misappropriating the funds that had been transferred from Lien Hoe, had dominion over those funds and observed as follows (at 342):
[85] Finally, the appellants cite two Singapore cases, Lai Ah Kau and another v Public Prosecutor [1988] 2 SLR(R) 128 (“Lai Ah Kau”) and Cheam Tat Pang and another v Public Prosecutor [1996] 1 SLR(R) 161 (“Cheam Tat Pang”) in support of their position. In Lai Ah Kau, F A Chua J held that (at [27]):
The appellants seize on the phrase “total control” to submit that dominion over property requires “total control” over property. With respect, this is not borne out by the case, which set out only one scenario where the element of dominion over property for a CBT charge could be satisfied and was not intended to be exhaustive. Furthermore, Chua J made this statement in the context of addressing the argument that the companies were not “other persons” as they were owned and controlled by the accused persons; he was not addressing the issue of whether an accused’s position as a director of a company vests him with dominion over the company’s property.
[86] Turning to Cheam Tat Pang (which had not been addressed by the Judge), the issue of entrustment of dominion was not disputed by counsel there (see Cheam Tat Pang at [14]). The main issues in the case were whether (a) the actus reus that the accused persons had used the entrusted property in violation of a direction of law prescribing the mode in which the trust is to be discharged; and (b) the mens rea of dishonesty had been proven. In the circumstances, we do not think that the case is helpful.
[87] Having considered precedent, principle and policy, we hold that where a group of persons is collectively entrusted with dominion over property, each member of the group has also been entrusted with dominion over property for the purposes of satisfying that element of a CBT charge under the relevant provisions of the Penal Code. Thus, in the present case, the fact that the innocent directors on the CHC Board had, together with the guilty director(s), approved the plans devised and proposed to them by the appellants, merely facilitated the commission of the breach of trust, and does not absolve the appellants of criminal liability. In a similar vein, the fact that the drawdowns had to be authorised by signatories who were independent of the appellants also does not detract from a finding that the relevant appellants were entrusted with dominion over CHC’s funds. To hold otherwise would be to allow the appellants to rely solely on the innocence of other independent persons to absolve themselves of criminal liability. This runs counter to the purpose and object of the CBT offences.
Whether the entrustment was “in the way of [their] business as … agent[s]”
[88] The next contested issue is whether the relevant appellants (namely, John Lam, Ye Peng and Kong Hee), who were members of the CHC Board, were entrusted with the monies in the BF and the GF “in the way of [their] business as … agent[s]”. This issue has a bearing on whether the correct charge against the appellants is that of CBT simpliciter under s 406 of the Penal Code or the aggravated offence of CBT in the way of [their] business as agents under s 409. The maximum punishment of the former is three years’ imprisonment under the 1985 revised edition of the Penal Code and seven years’ imprisonment under the 2008 revised edition of the Penal Code while that of the latter is life imprisonment (with the maximum determinate sentence being ten years’ imprisonment under the 1985 revised edition of the Penal Code and 20 years’ imprisonment under the 2008 revised version of the Penal Code).
[89] For ease of reference, we again set out the relevant portion of s 409 of the Penal Code:
For our present purposes, the key words in the provision are “in the way of his business as … an agent”. The parties do not dispute that the existing position in Singapore, since the High Court decision of Tay Choo Wah, is that directors who misappropriate the property of the company or organisation which they are entrusted with are liable for the aggravated offence of CBT in the way of their business as agents under s 409 of the Penal Code.
[90] In coming to its decision, the High Court in Tay Choo Wah considered two conflicting authorities. The first is a decision of the Privy Council on appeal from Ceylon, Mahumarakalage Edward Andrew Cooray v The Queen [1953] AC 407 (“Cooray”), which held (or at least, on one reading, appears to have held) that an agent in the context of s 392 of the Ceylon Penal Code (which is in pari materia with s 409 of the Penal Code) is limited to one who carries on an agency business and does not comprehend a person who is casually entrusted with money.
[91] The second is a decision of the Indian Supreme Court, Dalmia (the facts of which have been summarised at [76] above), which held that Cooray did not stand for the proposition that a person must first be in the profession of an agent before this element is made out. Instead, the court in Dalmia held that the requirement of entrustment “in the way of his business” as an agent for the purposes of s 409 of the Indian Penal Code (which corresponds to s 392 of the Ceylon Penal Code and s 409 of our Penal Code) would be satisfied as long as the accused is an agent of another and that other person had entrusted him with property or with any dominion over that property in the ordinary course of his duties as an agent.
[92] The High Court in Tay Choo Wah agreed with Dalmia. The effect of the court’s holding in Tay Choo Wah was that directors of a company or an organisation who were entrusted with the company’s or organisation’s property and had dishonestly misappropriated such property would be liable for the aggravated offence of CBT in the way of their business as agents under s 409 of the Penal Code.
[93] Before the Judge, the appellants argued that Dalmia, and therefore Tay Choo Wah which followed it, had wrongly interpreted Cooray and was wrongly decided. The appellants submitted that the position in Cooray, which was adopted by the Court of Appeal of Malaysia in Periasamy s/o Sinnappan and another v Public Prosecutor [1996] 2 MLJ 557 (“Periasamy”), was correct. The appellants further argued that Cooray (a 1953 Privy Council decision on appeal from Ceylon) rather than Tay Choo Wah (a High Court decision) was binding on the Judge, who was exercising the jurisdiction of the State Court.
[94] The Judge held that he was bound by Tay Choo Wah because as a matter of stare decisis, a higher court’s decision which distinguished an even higher court’s decision was binding on the lower court, and it was thus not open for him, sitting at the State Court level, to find that Tay Choo Wah had wrongly distinguished Cooray (the Conviction GD at [123]). The Judge found that Tay Choo Wah stood for either of the following propositions, neither of which would assist the appellants: (a) that there would be an entrustment in the way of one’s business as an agent as long as the person is an agent and is entrusted with property in his capacity as an agent; or (b) that there would be such entrustment as long as he was entrusted with the dominion over the property in the course of his duties as an agent. He therefore concluded that given that John Lam, Kong Hee and Ye Peng were agents qua directors of the CHC Board, and were entrusted with CHC’s monies in their capacities as agents and in the course of their duties as members of the board, they fell within s 409 of the Penal Code.
[95] On appeal, the appellants argue that Tay Choo Wah should not be followed because (a) Cooray is binding – both on the Judge and on this court; and (b) in any event, even if Cooray is not binding, the approach taken therein is correct in principle and should be followed, while conversely, the approach in Tay Choo Wah (and Dalmia) is wrong. The appellants submit that unlike the Judge, this court is not bound by Tay Choo Wah and therefore can and should depart from that decision. For this latter argument, the appellants point to Periasamy, where the Court of Appeal of Malaysia had applied Cooray and had observed (at 574I–575A) that to adopt the approach in Dalmia would be “tantamount to rewriting the section by means of an unauthori[s]ed legislative act”.

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Public Prosecutor v Lam Leng Hung and other appeals

Laws this judgment relies on

Grounds of decision

Introduction and overview

Background

The appellants

The charges

The facts

The inception of the Crossover and its launch in the US

The Crossover’s need for funding and the entry into the Xtron bonds

The change in plans and the entry into the Firna bonds

Plan to redeem the Xtron and Firna bonds and the “round-tripping” transactions

Events in 2010

Part I: The appeals against conviction

The decision below on conviction

The CBT Charges

The account falsification charges

The CBT Charges

The elements of an offence of CBT

Whether the relevant appellants were entrusted with dominion over CHC’s funds for the purposes of the CBT Charges

Whether the entrustment was “in the way of [their] business as … agent[s]”