Chinese billionaire in Singapore reports former employee’s embezzlement of 400 million in assets

Chinese tycoon Zhong Renhai has accused four former employees of his Singaporean family office of embezzling assets amounting to a staggering 74 million Singapore dollars (approximately 400 million Chinese yuan). Currently, the billionaire has reported the incident to the police.

According to a report by Nikkei Asia on Friday (March 21), the Singaporean police have received Zhong Renhai’s complaint and are conducting an investigation into suspected criminal breach of trust. However, the police have not provided further details.

Publicly available information indicates that Zhong Renhai is the legal representative of Zhejiang Hongji Petrochemical and the actual controlling shareholder of A-share listed company Gengxing Stock.

Hongji Petrochemical is a privately-owned technology enterprise engaged in the entire industrial chain production of olefins. Gengxing Stock is a financial company headquartered in Shanghai.

On Tuesday (18th), local media in Singapore and the American financial news agency first reported on this matter. Family offices are companies used by wealthy individuals to manage their assets and those of their families.

Recently, a court document released by the Singapore High Court shows that Zhong Renhai filed a lawsuit with the Singapore court, accusing four former employees – Goh Sock Ngee (Shannon), Lim Wee Siew (Alice), Eileen Ealham (Eileen), and Yap Shin Tze (Richard) – of engaging in false transactions and forging reimbursement documents, resulting in the embezzlement of approximately 74 million Singapore dollars from his Singaporean companies.

According to mainland media outlet “21 Finance,” the suspects involved in asset misappropriation are the four former employees who were part of Zhong Renhai’s highly trusted management team. Reports suggest that during Zhong Renhai’s restricted travel period preventing frequent trips to Singapore, the daily management of the family office was entrusted to these individuals.

In December 2023, Zhong Renhai discovered that these four employees were suspected of embezzling funds from his two Singaporean companies, following which they were subsequently dismissed or voluntarily resigned.

In January 2024, Zhong Renhai engaged an overseas legal firm to conduct a thorough investigation into the employees’ misappropriation actions. After nine months of investigation, it was found that these four employees, during their tenure, embezzled substantial funds through methods such as false reimbursement claims, fabricated expense reports, and fictitious division of labor. They illegally transferred a large amount of funds from the two Singaporean companies to personal accounts, amounting to approximately 400 million Chinese yuan, through actions like forging wire transfer payment orders and underreporting received salaries and bonuses.

The involved employees claim no wrongdoing. The case is still under trial.

Nikkei Asia reports that this is a civil case not publicly disclosed for trial. Currently, the Singapore High Court has ordered the freezing of the assets of the individuals involved and their affiliated company Singa Wealth globally to prevent further asset transfer.

Reportedly, these employees and a British Virgin Islands entity under their control are all based in Singapore.

As Singaporean authorities are investigating this matter, Gerard Quek, a fraud specialist at Singapore law firm PDLegal, informed Nikkei Asia that if the police find sufficient evidence to charge the involved individuals and ultimately convict them in a criminal trial, they might face imprisonment exceeding 10 years and fines.

“The key component for the offense of criminal breach of trust is essentially the intentional deprivation of another person’s property,” emphasized the lawyer.

Under Singapore’s criminal law, the maximum sentence for employee breach of trust is 15 years, and for corporate executives, it is 20 years.

Gengxing Stock, under Zhong Renhai, responded to mainland media reports, stating that the relevant coverage pertains to Mr. Zhong’s personal affairs, which the company cannot verify. This report is unrelated to the company and does not impact its normal operations.