Deputy-CEO Jailed For Cooking The Books
Thursday, 15th April 2010
The 37-year-old Deputy Chief Executive Officer (CEO) of JEL Corporation (Holdings) Limited, a public listed company dealing in photographic and IT products, was sentenced to 12 months jail and fined S$100,000 for his creativity. Mr Wee Teck Han has pleaded guilty to conspired with two of his colleagues to falsify (cook) the company's accounts (books) and inflated its profits by more than S$4.2 million.
In 2006, he and the then CEO Eric Tan Boon Yong told Wee to adjust JEL's accounts to show that it had achieved a net profit after tax of S$8 million for the financial year in 2006. Wee then liaised with the company's financial controller, Alex Ng Soon Heng, on how to cook the accounts.
Tan instructed Wee to get Ng to compile a list of transactions to be "revised". Ng then directed various members of JEL’s staff to falsify a number of invoices:
- A JEL tax invoice to Yong Tat was inflated by US$190,062.50;
- A JEL tax invoice to Yong Tat was inflated by US$110,250.00;
- A JEL tax invoice to Yong Tat was inflated by US$110,859.57;
- A fictitious JEL tax invoice to Vietco for S$424,816.27 was created;
- A fictitious JEL tax invoice to Vietco for S$374,353.13 was created;
- A fictitious JEL tax invoice to Vietco for US$1,693,720.15 was created;
- JEL’s General Journal was falsified by voiding a JEL Debit Note to Tan Thinh with a value of US$237,412.12, thereby reducing JEL’s recorded expenses.
The cumulative effect of the seven changes was to inflate JEL’s profits by US$2,244,875.02 plus S$799,169.40 (GJ) was a total of S$4,233,828.18. With that done, Tan then claimed that JEL's profits to meet the targeted S$8 million. They were caught red-handed by Singapore Police Force Commercial Affairs Department (Police Cantonment Complex) and were charged in 2009.
JEL had conducted business with several trading partners, including Hong Kong-incorporated Yong Tat Enterprise and Singapore-incorporated Vietco Pte. Ltd. both of which are directly or indirectly owned by Biomed Holdings. Biomed Holdings a British Virgin Islands-incorporated company was where Eric Leow, the chief operating officer of JEL Corporation (Holdings) Limited, was an ex-director.
Eric Leow Eric Hock Leong, age 53, was fined $150,000 for failing to notify the Singapore Exchange (SGX) of his interests in Biomed Holdings (when JEL went public in 2003, Leow had failed to disclose in the company's prospectus) and intentional failure to disclose interested party transactions.