Law Society seizes control of funds held by law firm JLC Advisors as crisis over missing S$33 million deepens

SINGAPORE — The Law Society of Singapore (LawSoc) has taken the rare step of seizing control of all funds held on behalf of clients or third parties by JLC Advisors, a law firm at the centre of a police investigation over S$33.2 million in missing funds.

The LawSoc said it had received “credible information” relating to the conduct of JLC’s managing partner Jeffrey Ong Su Aun, whose whereabouts are not known.

“As a result of the information disclosed, the Council of the Law Society had reason to suspect dishonesty on the part of Ong,” the LawSoc said in a statement issued on Friday (May 24).

The LawSoc will also conduct an investigative audit on the client accounts of JLC, which had been engaged by Singapore-listed engineering firm Allied Technologies to hold its escrow account that contained the now-missing S$33.2 million.

An escrow account is used by solicitors to safe-keep a buyer’s funds during the sale of property.

“In carrying out this audit, the Law Society will inquire into all the facts and circumstances surrounding the operation of JLC’s client accounts, and the role played by Ong,” it said in response to queries from the media on Friday (May 24).

The LawSoc said that it will issue statements “as considered appropriate” to JLC’s clients and the public once the audit is completed.

Apart from making a police report, Allied also reported the case of its missing money to the LawSoc, and has “commenced legal proceedings”.

In its statement on Friday, the LawSoc added that it has since taken control of all monies held by JLC, including what is being held by the law firm on behalf of its clients or third parties.

By doing so, the LawSoc said it was exercising its statutory power of intervention under the first schedule of the Legal Profession Act that would enable it to carry out its “duty to protect and safeguard the interests of clients and third parties”.

“Interventions of this nature due to reasonable suspicions of dishonesty are rare,” noted the LawSoc.

However, it added that it will do so when the need arises to “safeguard public interest and the integrity of the legal profession”.

The LawSoc said that the outcome of a special audit will be made public, and the Singapore Exchange Regulation (SGX RegCo) will update the market on further actions after that.

Based on SGX RegCo’s first notice of compliance issued on May 8, Allied was required to appoint a special auditor. SGX has now ordered that the special auditor report solely to the regulator its findings from the special audit.

Besides looking into the circumstances leading to Allied placing its funds with JLC Advisors, SGX also said that the special auditor will have to investigate developments surrounding the missing money.

Mr Ong, who also goes by the alias Wang Ci' An, might have given an unauthorised instruction to pay out the missing money, Allied said in a stock exchange filing on Thursday. It also said it was making a police report on the incident.

Police told TODAY that investigations into the matter are ongoing, and the whereabouts of Mr Ong are currently unknown. The Immigration and Checkpoints Authority declined to reveal if the 42-year-old lawyer has left the country, citing confidentiality reasons.

CLIENTS' CHOICE ON HOW TO KEEP MONIES SECURE

In response to queries from TODAY, the Ministry of Law said that the proper handling of accounts by lawyers is governed by the Legal Profession Act, its subsidiary legislation and in detailed guidelines issued by the LawSoc.

These include specific safeguards for clients’ accounts, said the ministry’s spokesperson.

In August 2011, measures were implemented by the ministry that saw the tightening of the process in which law firms handle clients' monies under amendments to the Conveyancing and Law of Property Act and the Legal Profession Act.

These safeguards were imposed after two other rogue lawyers allegedly absconded with large sums of money.

To facilitate day-to-day handling of commercial matters, the spokesperson clarified that lawyers are allowed to hold their clients' monies.

However, the spokesperson stressed that this is subject to strict rules and guidelines.

“How much is placed with lawyers is a matter for clients to decide. When large sums are involved, it is possible to have alternate arrangements. It is a matter of a client's choice,” said the spokesperson.

For instance, they can choose to have it with lawyers or with financial institutions.

Ultimately, the spokesperson said the clients have to make their own arrangements to keep the monies in a secure way.