A New Singapore Family Office Scandal is Brewing
A substantive multi-million-dollar fraud case is likely working through the city-state justice system, potentially tarnishing the wealth management and banking sector for the second time in as many years.
If 2023 was the year of the money laundering scandal, something finews. asia extensively commented on at the time, 2025 could become the year of large-scale fraud.
A «Nikkei Asia» article published recently lists the individuals and the rough parameters of what we are currently looking at.
Large Misappropriation
According to the publication, Zhong Renhai, the head of a Chinese Singapore-based single-family office called Panda Enterprises, along with another entity under his ownership, Lee Fung International, has made a series of very grave accusations.
He believes that former local employees have scooted off with about S$74 million ($55.5 million).
Freeze Order
There seems to be something behind the large-scale misappropriation, given that other regional media(collated Google search), including the «South China Morning Post» and the city’s «Business Times», all citing court proceedings or documents, including a freeze order issued in the middle of March.
«The Straits Times», for example, maintains that the four former employees set up an entity called Singa Wealth, and that they were the only locally based staff at Lee Fung International between 2015 and 2024.
Evidence Disclosed
The court also maintained in the article that the judge said that the accusers had shown a «good arguable case» while disclosing evidence of fraud and dishonesty.
«Nikkei Asia» state also that the four ex-employees at Lee Fung were Singaporeans, and that there was an additional BVI entity controlled by the four.
Employees Fired
The acts were apparently perpetrated at the end of 2023, or shortly after the large-scale money laundering scandal broke.
Nikkei Asia indicated that the Chinese businessman only discovered what was going on at the end of that year and removed the four employees in January 2024.
Exaggerated Pay
But it is not only the flagrant details that are surprising, it is the fact that it was conducted so openly.
The employees seemingly overpaid themselves significantly as part of the fraud, while one of the four allegedly fabricated documents to embezzle funds that belonged to Zhong.
Prolonged Scrutiny
Moreover, if they used local or international banks to help with the transfers, these would likely come under prolonged regulatory scrutiny, particularly if they did not heavily query the salaries and the transfers and simply acted on them.
If the details stand as we currently know them now, there are not many inspectors out there who are going to look at that in a particularly friendly fashion.
Extended Periods
One of the key reasons that this all happened is the assertion that the alleged acts occurred during the COVID-19 pandemic when Zhong was not in a position to travel to Singapore for extended periods of time.
That allowed them to exploit the family office for their own purposes. The ostensible details, however, are alarming, as it is not something one would expect from financial sector employees in the city-state to begin and like to set many future precedents related to single-family-office systems - and checks.
Hurried Checks
It is also certain to prompt other family-office owners to hurriedly check their accounts and make sure there is a system in place to mitigate those kinds of things from happening.
But at the end of the day, it all comes down to trust, or the lack of it, by staff and employees, and the blatant disregard of it, in this case, is something the family office sector in the city-state is going to be talking about for years.
