Singaporean Allegedly Swindled $352 Million for Jet-Set Life
(Bloomberg) -- The businessman allegedly behind Singapore’s biggest investment fraud is said to have pocketed more than half of the net funds investors poured into his company as a document pointed to lavish spending on private jets, nightclubs and cash gifts.
Ng Yu Zhi, 34, was responsible for outflows of S$475 million ($352 million) from his Envy Group of companies, according to a report by court-appointed judicial managers for the firms. The report was distributed to investors and seen by Bloomberg News. That compared with confirmed net inflows of S$841.5 million from investors, the report said, adding the tracing of fund flows is ongoing.
Ng spent about S$2 million a month to fund his lifestyle, which included the services of a butler and chauffeur, and expenditure on alcohol, hotel rooms and at fine dining restaurants, the report showed. He made “significant monetary gifts to close associates,” it said.
Ng’s companies are now run by a team of interim judicial managers led by Bob Yap of KPMG LLP, who have suggested to the court that Envy be liquidated. They declined to comment on the report. Ng’s lawyers at Davinder Singh Chambers LLC didn’t respond to a request for comment.
The alleged scam has rattled the moneyed classes in one of Asia’s wealthiest nations as the list of victims grows to include high-profile professionals from the city’s asset management and legal industries. Ng is facing 32 charges, and has been accused of cheating and of criminal breach of trust by misappropriating at least S$201 million.
The report is the second one from the interim judicial managers, after the first one was distributed in May.
Part of the S$841.5 million of investor funds went to Ng’s associates including his Envy business partner Lee Si Ye, other employees, and some investors as referral fees, according to the report. About S$119.7 million was attributed to investor withdrawals, and S$64.5 million of outflows has yet to be verified.
Lee, a minority shareholder in Envy, did not respond to questions sent via text messages to her mobile phone.
The report also said Ng made personal loans worth S$7.5 million to Envysion Wealth Management founder Veronica Shim, previously named by the police as an investor in Envy’s funds. Of this amount, S$5.5 million was set to be applied toward Envysion’s capital, with Ng given an option to convert it to a 50% stake in Envysion Holdings Pte., subject to approval from the Monetary Authority of Singapore. The rest would fund a shareholders’ loan in Shim’s name to Envysion, accruing interest at 4% per annum, according to the report.
In an emailed reply to queries by Bloomberg, Shim said she was unable to comment on specifics because it was part of an ongoing matter before the courts. There was never any trust agreement entered with Ng, and she and Envysion were victims of Ng’s alleged fraud, said the former private banker.
“There were loans with Ng Yu Zhi negotiated on an arm’s length basis and the funds were remitted from his personal account and not from the accounts of the Envy companies,” Shim said.
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About S$53 million is still in Envy’s bank and brokerage accounts, according to Yap and his team. That compares with more than S$100 million of Ng’s personal assets that have been frozen by the police. The managers have put claims on Lee’s and Shim’s funds amounting to the sums given to them, according to the report.
The managers are also looking to retrieve money paid in referral fees to investors, as well as sums some investors took out in excess of what they had invested in Envy.
Yap, a KPMG partner, was the lead liquidator for entities of Lehman Brothers Holdings Inc. and MF Global Holdings Ltd., according to KPMG Singapore’s website.
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