Judge raises fairness question in sentencing of Airocean directors
Remisier kings
The cousins who have taken over Peter Lim’s throne View PDF
Popular posts from this blog
Ex-bank owner Agus Anwar declared bankrupt
Prominent former bank owner Agus Anwar was yesterday declared bankrupt by the High Court.
Two ex-UOBKH staff charged with lying to MAS over due diligence reports on a Catalist aspirant
TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issu...
Comments
CJ Chan notes that their acts took place long before harsher benchmarks were mooted
By KENNETH LIM
25 February 2012
Questions of fairness may arise if the courts use harsher sentencing benchmarks that emerge only years after the crime itself was committed, Chief Justice Chan Sek Keong ventured yesterday at the magistrates appeals hearing of three former directors of Airocean Group.
The judge, who had lengthy exchanges with the lawyers, reserved his judgment at the end of the second and final day of appeal hearings.
Former independent directors Peter Madhavan and Ong Seow Yong and former chief operating officer Johnson Chong are appealing their convictions and sentences in case over Airocean’s disclosures about a late-2005 corruption investigation of former Airocean chief executive Thomas Tay, who was later found guilty.
Madhavan, who is believed to be the first independent director in Singapore to be sentenced to jail, has been of particular focus.
Lawyers for both sides asked the court to determine the nature of Madhavan’s role in Airocean’s lack of disclosure about Tay’s investigation in September 2005 by the Corrupt Practices Investigation Bureau and a subsequent announcement in November 2005 that told investors the investigation concerned other companies in the industry.
‘Either he was helping out . . . or he was orchestrating this master scheme,’ Senior Counsel Davinder Singh of Drew & Napier, acting for Madhavan, told the court.
A lawyer himself, Madhavan faces four months’ jail and a $120,000 fine for making a false and misleading statement and for not disclosing material information.
Ong was fined $170,000 while Chong, who was also convicted of insider trading, was sentenced to four months’ jail and fined $280,000.
Ex-CEO Tay was eventually fined $3,000 for his corruption conviction, and in 2007 was fined $240,000 for disclosure lapses and giving misleading information.
The three appellants’ lawyers yesterday urged the court, if it upheld the convictions, to reduce their sentences.
Mr Singh said that Madhavan’s fine should be cut to $80,000 and the jail requirement removed.
Ong’s lawyer, Senior Counsel Michael Hwang of Michael Hwang Chambers, also asked for his client’s fine to be reduced to $80,000.
Subramanian Pillai of Colin Ng & Partners, lawyer for Chong, asked for the disclosure-related fines to be cut to $120,000, and the jail term for insider trading to be reduced to a fine.
The appellants’ lawyers asked the court to consider that Tay got a lighter sentence for acts that were similar to those for which their clients were convicted, even though Tay had arguably more culpability.
The appellants’ relatively harsh sentences are ‘making the whole idea of parity of sentencing a mockery’, Mr Singh said.
The prosecution, represented by deputy solicitor-general and Senior Counsel Jeffrey Chan, argued that Tay’s sentence was more lenient because he had pleaded guilty to the securities-related convictions.
The courts in 2008 also signalled that, in future, sentences for certain securities-related crimes should be harsher and include imprisonment, the prosecution argued.
But the judge, noting that the acts in question took place earlier, in 2005, wondered if it was fair for a court to apply new and harsher benchmarks so long after the occurrence of the alleged actions.
For instance, if Parliament were to enact a new law that raises penalties for a certain crime, the judge said, the court would typically apply that new law only for crimes that occur after the new law was enacted.
The prosecution replied that the court was entitled to use new benchmarks if they reflected a change in judicial attitude and social needs.
It was also important for the court to come down hard on such acts, Mr Chan said. ‘The results of this case will send, in effect, a signal to the market.’
The judge asked the appellants why Airocean could not have just made a straightforward announcement in September to say that Tay was being investigated.
Mr Singh replied that ‘half-baked information’ could cause common investors to lose money and then blame the company.
Mr Singh said that Madhavan consistently acted in good faith, to the best of his knowledge and abilities, and inadvertently exposed himself when he went beyond the call of duty as an independent director to help Airocean navigate through a crisis. Madhavan may have made poor judgements, but ‘he is not a criminal’, Mr Singh said.
But the prosecution painted Madhavan as a person who deliberately sought to hide from the public information that he knew was material and discloseable. ‘If you don’t disclose, you are creating a false market,’ said Mr Chan.