A Report by CYS Global Remit Legal & Compliance Office
In a recent legal development reported by Today Online, a director, Koh, aged 46, faced a fine of S$28,000 for admitting guilt to seven charges related to a lapse in diligence under the Companies Act. The case, discussed in the court, revealed that Koh, overseeing 60 companies, failed in his duties pertaining to 46 of them.
Koh's involvement as a nominee director in 2019 at a firm named Osome was driven by his desire to earn additional income. As part of Osome's panel of nominee directors, he was compensated with S$100 a month for each company where he served as a nominee director. Osome, a company providing corporate services, offers Singaporean directors to entities needing to meet regulatory requirements.
Before joining Osome, Koh was informed of the need to conduct due diligence checks on the companies, including examining the foreign director's passport, proof of address, and undergoing "watch list" screenings - a check by the authorities to ascertain if the companies are susceptible to financial crimes.
However, the court revealed that Koh did not perform any checks or due diligence before agreeing to become a director, instead he assumed that Osome's checks would suffice. This lack of diligence led to charges under the Companies Act.
This incident serves as a stark reminder of the critical importance of robust corporate governance practices. CYS Global Remit remains committed to learning from such cases, reinforcing governance structures, ensuring effective risk management, and fostering active and responsible engagement from their directors. This process involves regular assessments of governance frameworks, evaluations of director performance, and an unwavering commitment to upholding elevated ethical standards.
Stay tuned with CYS Global Remit for more insights into governance excellence and risk management in the ever-evolving corporate landscape.