‘I was sold’: Venture capitalist admits he was fooled by alleged fraudster in $1.45b nickel scam

Well-known venture capitalist Finian Tan told the High Court on April 4 that he had always avoided being cheated, but was “sold” on the story that alleged fraudster Ng Yu Zhi had told him for several months.

When the Commercial Affairs Department started looking into Ng’s nickel-trading business, Dr Tan was thinking of ways to help Ng solve his problem with the authorities, believing that it was just a misunderstanding.

Dr Tan said he then tried, but could not get satisfactory answers from Ng. After gathering information from other sources, he realised it was more than a misunderstanding. “There was a serious stench of some fraud,” he said. 

Dr Tan, the founder and chairman of Vickers Venture Partners, was on the stand for the second day in the ongoing trial of Ng, 37, who is accused of masterminding a nickel-trading scam that attracted $1.45 billion from hundreds of investors from 2016 to 2021.

Ng is accused of cheating Dr Tan by getting him to deliver US$19.2 million (S$25.7 million) between October 2020 and January 2021 to Ng’s company Envy Global Trading (EGT).

He allegedly did so by deceiving Dr Tan into believing that the company was buying nickel at a discount and selling the metal for a profit.

The bulk of the sum came from Dr Tan: US$14 million was from holding company Vickers Financial Group, of which he is the majority shareholder, and another US$1.5 million was his personal money.

Ng is also accused of cheating a company named FinComm, which used money from two of Vickers’ funds to invest in the nickel scheme. FinComm had delivered another US$14.1 million to EGT between December 2020 and January 2021.

The prosecution contends that no nickel was actually bought or sold; earlier investors were paid with money put in by other investors.

During his first day on the stand, Dr Tan said he was introduced to Ng in August 2020. He said Ng did not approach him about the nickel business, but wanted to invest in Vickers.

Dr Tan later asked Ng how he made his money in nickel trading, and asked to invest in Ng’s business.

On April 4, when asked how the case had affected him, Dr Tan said: “As a venture capitalist, it’s my first exposure to something like this.”

Speaking thoughtfully, he noted that he was in the business of investing and taking risks, and that several people had tried to cheat him. “I’ve always avoided them because I could see slip-ups,” he said.

“I admit that in this case, I was sold. He was skilful in what he did. He could fool me,” said Dr Tan.

He said Ng knew all the jargon and knew what could possibly make this type of money. He noted that Ng chose a metal that had low prices a few years ago, but whose prices have since gone up.

Dr Tan also testified about the “amazing act” that Ng had put on. The two men often met for meals with their families, and Ng was always checking nickel prices on his phone, said Dr Tan.

Once, Ng was constantly checking about a hurricane in Australia, apparently out of concern over a cargo loading. They high-fived each other after the loading was done, he testified.

“I never expected that this would be a Ponzi (scheme),” he said. “Why would someone doing (a) Ponzi (scheme) lock up money for 12 years?”

He was referring to how Ng had agreed to commit a US$5 million investment in one of Vickers’ funds.

Ng had also contributed US$13 million out of a US$24 million investment that he and six others had put into a company in the Vickers group.

Dr Tan said Ng had gained his trust. “He invested in us with no requirement. He never solicited anything, he never asked me to invest... I treated him as an investor,” he said.

Dr Tan said the nickel scheme seemed to make sense at the time, given his own experience in commodity trading.

Ng claimed he had a term contract to buy nickel from the supplier at a discount. He needed funds to buy the nickel and ship the cargo to the buyer, said Dr Tan.

Dr Tan said he understood that it was difficult for Ng to borrow money from banks because he was running a “small shop”.

He added that he consulted metals traders and also got good feedback from other investors, including people he knew personally.

Dr Tan said he now realised that many people had invested their life savings and that lives have been destroyed.

He said he still could not connect the person he knew to what Ng has been accused of.

“What would motivate someone to do this and hurt so many people in the process?”

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