A 60-year-old Singaporean-Indian was sentenced to four weeks' jail on Wednesday for failing to exercise diligence in his duties as the director of a company.
Thilagaratnam Rajaratnam of Strategic Corporate Investments, who was convicted in October last year, was also disqualified from acting as the company's director for five years, the Singapore Police Force said in a statement.
In 2014, Rajaratnam agreed to be the sole director and shareholder of Strategic for SG$500 a month without participating in the management or operations of the company. He was also the sole signatory to Strategic’s bank account as of August 2015, and aside from signing company documents, he was not involved in and did not take any steps to find out about Strategic’s business and affairs.
In particular, Rajaratnam did not know that between December 2014 and September 2015, Strategic’s bank account received a total of 54,718,880.76 euros from Wirecard AG, a German payment processor and financial services provider.
The company had filed for insolvency in Germany in June 2020 after admitting 1.9 billion euros in cash was missing from its accounts.
These funds received by Strategic were subsequently transferred to various parties, police said.
At the time of the offence, Rajaratnam's brother, R. Shanmugaratnam, 58, was a director at Citadelle Corporate Services, which provided corporate secretarial services, and its clients included companies owned by James Henry O’Sullivan.
Between March 29, 2016 and April 7, 2018, Shanmugaratnam prepared seven letters from Strategic addressed to Wirecard AG and handed them to Rajaratnam for signing.
These letters were prepared following requests by Wirecard AG’s auditors for confirmation as to the amounts that Strategic held in its bank accounts on Wirecard AG’s behalf. Further, the letters stated that Strategic held amounts ranging from 29,940,119.76 euros to 54,718,880.76 euros at the end of various financial years.
According to the police statement, Strategic did not hold such amounts at those points in time.
Rajaratnam admitted that he signed the seven letters at the request of Shanmugaratnam without making any effort to verify the balances in Strategic’s bank account.
Despite being unaware of the purpose of the letters or the matters mentioned therein, he did not ask Shanmugaratnam, O’Sullivan, or O’Sullivan’s employees about them.
O’Sullivan has been charged in court with related offences for his role in Strategic’s issuance of such letters addressed to Wirecard AG.
Along with O’Sullivan, Shanmugaratnam has also been charged for offences relating to similar letters issued by Citadelle to Wirecard entities, and court proceedings are ongoing.
According to The Straits Times newspaper, Rajaratnam's lawyers stated in court documents that he was negligent and pleaded for him to be given a fine of SG$5,000. While his bail has been set at SG$30,000, Rajaratnam is expected to surrender himself at the State Courts on February 29 to begin serving his sentence.
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