Property tycoon Ong Beng Seng handed two charges linked to dealings with Iswaran; David Lum will not be charged

Billionaire and property tycoon Ong Beng Seng was on Friday (Oct 4) handed one charge of abetting the obstruction of justice, and one charge of abetting offences under Section 165 of the Penal Code, both in relation to dealings with former transport minister S Iswaran.

This came a day after Iswaran, 62, was sentenced to 12 months’ jail, having pleaded guilty to four charges under Section 165 and one for obstruction of justice.

Section 165 prohibits public servants from accepting valuable items for free or inadequate payment from someone connected to business transactions or proceedings they handle.

But no charges will be tendered against David Lum, managing director of mainboard-listed construction company Lum Chang, with whom Iswaran also had dealings.

In response to queries from the media, the Attorney-General’s Chambers (AGC) said: “In arriving at the decision, the prosecution considered all the relevant facts and circumstances of the case, including the role that Lum played in each of the transactions.”

On Friday, Ong appeared in court dressed in a blue shirt. He did not speak to reporters who approached him.

No plea was taken from him. His lawyer, Aaron Lee from Allen & Gledhill, told the court that he needed time to take instructions from his client; Lee asked for a six-week adjournment and for the case to move to the pre-trial conference stage.

The prosecution, led by deputy chief prosecutor Christopher Ong, had no objections to that. The case has been adjourned to pre-trial conference at 9 am on Nov 15.

The charges against Ong correspond to two of the charges to which Iswaran pleaded guilty. The first, for abetting an offence under Section 165, related to flights and a hotel stay.

Ong allegedly offered Iswaran a trip to Doha in December 2022, and arranged for his private jet to fly the minister there. The flight was worth US$7,700.

Ong also allegedly made arrangements through Singapore GP for a one-night stay at Four Seasons Hotel Doha, valued at S$4,737.63, and offered Iswaran a business-class flight from Doha to Singapore worth S$5,700.

The second charge was for allegedly instructing Singapore GP director Mok Chee Liang, in May 2023, to bill Iswaran for the business-class ticket from Doha to Singapore – action that would have obstructed the course of justice. 

Those found guilty of offences under Section 165 can be jailed for up to two years, fined or both. The maximum penalty for obstructing the course of justice is jail time of up to seven years, a fine or both.

Abetting an offence would result in the same punishment if the offence is committed as a consequence of the abetment.

The AGC said the prosecution would not tender charges against Ong for his involvement in the other charges Iswaran faced.

Tickets, flights and a hotel stay

Ong, the 78-year-old managing director of Hotel Properties Limited (HPL), is known for being among the individuals credited with bringing the Formula 1 (F1) night race to Singapore in 2008. He owns the rights to the Singapore Grand Prix.

Iswaran was previously chairman of the F1 steering committee and the chief negotiator with Singapore GP on business matters relating to F1.

Of the Section 165 charges on which he was convicted, two involved gifts from Ong. One charge was for obtaining 10 green room tickets to the 2017 Singapore F1 Grand Prix, with a value of S$42,265.

The other was for accepting the flight on Ong’s private jet, the stay at the Four Seasons Doha and the business class flight, with a total value of S$20,848.03.

The obstruction of justice charge pertained to the repayment of S$5,700 that Iswaran made to Singapore GP for the business-class flight.

In Iswaran’s sentencing hearing on Thursday, Justice Vincent Hoong said the former minister had acted with deliberation in asking Singapore GP to bill him and making payment for the flight, knowing that this would make an investigation less likely.

On Friday evening, HPL said in a regulatory filing that Ong remains as managing director, after the nominating committee had assessed and determined that he “continues to be suitable to carry out his duties and responsibilities” in that role.

Ong is currently out on S$800,000 bail.

A spokesperson for Ong said that he is “seeking legal advice on the charges”.

Iswaran’s case

Iswaran’s two remaining charges were for dealings with Lum, from whom he obtained 14 bottles of whisky and wine worth S$3,255.75 and a Brompton bicycle valued at S$7,907.50.

Another 30 charges under Section 165 were taken into consideration for sentencing.

The 12-month sentence Iswaran received was higher than what both the defence and prosecution had sought. The prosecution had previously made a case for six to seven months’ jail, and Iswaran’s lawyer Senior Counsel Davinder Singh had asked for eight weeks.

On Thursday, Justice Hoong said adopting either parties’ proposals would result in a “manifestly inadequate” sentence.

Iswaran is due to surrender himself at the State Courts on Oct 7. He has 14 days from Thursday’s sentencing to appeal against his sentence.

If convicted, can Ong Beng Seng remain as Hotel Properties director?

Former transport minister S Iswaran was sentenced on Thursday (Oct 3) to 12 months’ jail, having pleaded guilty on Sep 24 to five charges: two for obtaining hospitality suite tickets for the 2017 Singapore F1 race, as well as flights and a hotel stay in Doha from property tycoon Ong Beng Seng.

The 78-year-old Ong, popularly known as OBS, was charged on Friday (Oct 4) afternoon.

The managing director and controlling shareholder of Singapore-listed HPL was charged on one count under Section 165, for having allegedly abetted a public servant in obtaining gifts, and one count for obstruction of justice.

The charges, initially brought under the Prevention of Corruption Act, alleged that these gifts were intended as inducements to further his business interests in contracts with the Singapore Tourism Board for events such as the Singapore Grand Prix and the ABBA Voyage virtual concert. The prosecution later amended the charges to lesser offences under Section 165. The tycoon is out on bail of S$800,000.

Why did HPL request trading halt?

HPL requested a trading halt before the market opened on Friday, pending an announcement. This came amid concerns that a fine or jail sentence above a certain threshold could disqualify Ong from serving as a director or holding key appointments within the company.

On Friday evening, HPL requested that the trading halt be lifted. This came after it said in a filing that Ong “continues to be suitable to carry out his duties and responsibilities” in his role. HPL added that the board and nominating committee will continue to monitor the progress of the matter, and that the committee will continue to re-assess the suitability of Ong’s continued appointment.

The Malaysian founded HPL in 1980 to buy the Hilton Singapore hotel for S$72 million. This marked his foray into the property, hotel and retail sectors. The company swiftly went on to acquire more hotels and properties, notably those located in the prime Orchard Road belt. Today, it is a conglomerate with interests in hotel ownership, management and operations, property development and investment holdings; it owns brands such as the Four Seasons Hotels and Resorts, Hard Rock Hotels and Marriott International.

What does the law say?

Lawyers told The Business Times that under Section 154(1) of the Companies Act, an individual can be disqualified from serving as a director of a company if convicted of any offence in any country that, firstly, involves fraud or dishonesty, and secondly, is punishable with imprisonment lasting three months or more. 

This disqualification also applies to any offence related to market conduct and enforcement of a civil penalty under the Securities and Futures Act.

A court may further disqualify anyone convicted in the country of crimes related to the formation or management of a company, as well as offences under certain sections of the Companies Act or the Insolvency, Restructuring and Dissolution Act. 

Lin Yuankai, a partner at RPC Premier Law, told BT that “aside from being unable to act as a director, the person is also prohibited from both direct and indirect participation in the management of the company”. 

“This person is entitled to apply to the High Court for permission to act as director or to participate in the management of a company during the disqualification period, though it is possible that the Accounting and Corporate Regulatory Authority may object to this application,” he added.

The duration of disqualification depends on the circumstances of the conviction. If an individual is convicted but not sentenced to imprisonment, the disqualification lasts for five years, or for a shorter period as determined by the court. If imprisonment is involved, the disqualification extends for five years following the individual’s release.

Referring to Ong’s case, senior corporate lawyer Robson Lee told BT, however, that the charges do not involve fraud, and there was no hint of dishonesty. He emphasised that the case is not comparable to typical dishonest conduct seen from time to time, and so would not lead to automatic disqualification from directorships.

“The process has to take its due course. It is premature to speculate that this is going to be a consequence,” he added. He said the court has to make a disqualification order and there are several legal requirements to satisfy. 

Lee, a partner at Kennedys Law and a director of Legal Solutions, said: “It might take some time before the outcome of his charges are known.”

He pointed out that it is uncertain whether Ong will plead guilty, and that the court must provide sufficient time for him to seek counsel. This means the entire process could take a few months, depending on whether he chooses to contest the charges.

Legislation for foreign nationals

Non-Singaporean directors who are convicted may be deported immediately. Lin said that the legal framework applicable to foreign nationals in this context is primarily the Immigration Act, which gives Singapore’s immigration authorities the right to control non-citizens’ clearance to enter or leave Singapore.

A foreign national who is convicted and jailed for any offence in or outside Singapore may, as a result, be deemed by the immigration authorities to be a “prohibited immigrant” and be refused entry into Singapore. If the foreign national is classified as such while in Singapore, this person may be deported and barred from future re-entry.

Lin added: “This may pose challenges to a foreign national who has deep roots in Singapore, whether personally or professionally.”

But Lee pointed out that such deportation orders lie at the discretion of the Immigration & Checkpoints Authority.

“It’s not automatic. The severity of the offence in question would be a factor for consideration,” he said.

In Ong’s case, his wife, Christina Fu, is a Singaporean. She runs Como Hotels and Resorts, retail empire Club 21 and London-listed handbag maker Mulberry. They have a son and a daughter. The couple were ranked 24th richest in Singapore by Forbes in 2022 and are estimated to have a net worth of US$1.7 billion. Ong is a Singapore permanent resident (PR) who has spent a lifetime here.

Stephanie Chew, associate director for litigation at TSMP Law Corporation, told BT: “Foreign passport holders who are Singapore PRs may have their PR status affected if they are convicted of a criminal offence. Unlike citizenship, being a PR is not a permanent status per se, and the authorities retain the discretion on whether to revoke an individual’s PR status. This is a complex and multifactorial exercise.”

Implications for Lum

Two of the five charges Iswaran admitted to are for obtaining, as a public servant, valuable items from David Lum, managing director of mainboard-listed construction company Lum Chang Holdings : L19 0%. The items included bottles of whisky, golf clubs and a Brompton bicycle, which he received while he was transport minister, despite knowing about Lum’s business connections to his ministerial role.

The Attorney-General’s Chambers said on Friday that it would not tender charges against Lum. Lee said it is “premature” to talk about Lum.

In March 2024, shares of Lum Chang fell more than 10 per cent after the company revealed that its managing director had “attended several interviews” with the Corrupt Practices Investigation Bureau to assist in the investigations against Iswaran. The company at that time maintained that it deemed Lum suitable to carry on as its managing director after having considered the charges against Iswaran and Lum’s alleged involvement.

One of Lum’s companies, Lum Chang Building Contractors, won a contract from the Land Transport Authority (LTA) in 2016 for works at Tanah Merah MRT station. At the time Iswaran was transport minister – from 2021 till January this year – Lum’s company had a contract with the LTA to undertake additions and alterations to the MRT station and its existing viaducts.

Commenting on the Iswaran case, Lee said Thursday’s sentencing “underscores the determination of the Singapore government to keep the system clean and sets a strong precedent that such conduct by high-level public servants will not be condoned”.

Source: Business Times © SPH Media Limited. Permission required for reproduction.

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