Singapore legislation
Section 238
Section 238
Responsibility for fraudulent trading
(1)
If, in the course of the judicial management or winding up of a company or in any proceedings against a company, it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court, on the application of the judicial manager, liquidator or any creditor or contributory of the company, may, if it thinks proper to do so, declare that any person who was knowingly a party to the carrying on of the business in that manner is personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court directs.
(2)
Where the Court makes any declaration under subsection (1), it may give such further directions as it thinks proper for the purpose of giving effect to that declaration and in particular —
may make provision for making the liability of any person under the declaration a charge —
on any debt or obligation due from the company to the person liable; or
on any charge or any interest in any charge on any assets of the company held by or vested in —
the person liable;
any corporation or other person on behalf of the person liable; or
any person claiming as assignee from or through the person liable or any corporation or person acting on behalf of the person liable; and
may from time to time make such further order as is necessary for the purpose of enforcing any charge imposed under this subsection.
(3)
For the purpose of subsection (2)(a)(ii)(C), “assignee” —
includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation or charge was created, issued or transferred or the interest created; but(b)does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made.
(4)
Where any business of a company is carried on with the intent or for the purpose mentioned in subsection (1), every person who was knowingly a party to the carrying on of the business with that intent or purpose shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 7 years or to both.
(5)
Subsection (4) applies to a company whether or not it has been, or is in the course of being, wound up, and whether or not it has been, or is, in judicial management.
(6)
This section has effect even if the person concerned is criminally liable apart from this section in respect of the matters on the ground of which the declaration is made.
(7)
On the hearing of an application under subsection (1), the judicial manager or liquidator may give evidence or call witnesses.