Former CFO of thumbdrive inventor Trek 2000 jailed, fined for multiple offences

SINGAPORE: The former chief financial officer of Trek 2000 – the tech firm behind the invention of the thumbdrive – was on Monday (Dec 5) sentenced to 11 months' jail and a fine of S$20,000 after pleading guilty to a number of charges.

Gurcharan Singh was convicted of eight charges: One charge of failing to make immediate announcements of interested person transactions; one charge of conspiring with others to falsify Trek 2000's financial statements; one charge of engaging in a conspiracy to cheat the company's auditors; three charges of instigating an employee to forge documents; and two charges of abetting another to falsify documents.

Nine other similar charges were taken into consideration for the purposes of sentencing, the Singapore Police Force (SPF) said in a news release.

INTERESTED PERSON TRANSACTIONS

The charge concerning interested person transactions involved a company called T-Data Systems, whose sole shareholder was the wife of Trek 2000's then-executive director Poo Teng Pin.

In 2011, the Trek 2000 group was involved in seven transactions with T-Data Systems, totalling US$2.79 million.

Trek 2000 is a mainboard-listed company, and under the SGX-ST mainboard rules, T-Data was an interested person in relation to Trek 2000. All seven transactions, therefore, had to be announced immediately.

"However, Trek 2000 recklessly failed to make the necessary disclosures, and this failure was attributable to, among other things, the neglect of Singh," SPF said.

"Singh knew that T-Data was an interested person but did not take any steps to get Trek 2000 to make the necessary disclosures."

FICTITIOUS SALE

Singh also conspired with Poo and former Trek 2000 CEO Henn Tan to falsify the company's financial statements between November and December 2015, by recording a fictitious sale to Unimicron Technology Corp worth US$3.2 million.

"In February 2016, Trek 2000's auditors, Ernst & Young LLP, queried the fictitious sale to Unimicron and requested supporting documents," said SPF.

"Singh then conspired with Tan, Poo and another employee who is also facing charges, to deceive Ernst & Young into believing that the sale to Unimicron was genuine. Thereafter, Singh instigated an employee to forge two bank advices to support the fictitious Unimicron sale, and together with his co-conspirators, created a document setting out a false chronology of events relating to the fictitious Unimicron sale."

Ernst & Young later lodged a report to the Accounting and Corporate Regulatory Authority (ACRA), SPF said.

The police added that court proceedings against the other employee referred to in this case are ongoing.

FICTITIOUS LICENSING INCOME, OPERATING EXPENSES

Additionally, Singh was involved in the creation of documents which recorded fictitious licensing income, purportedly from Toshiba Electronics Asia (Singapore).

This was done to boost Trek 2000's reputation in the industry, said SPF, as Toshiba Electronics Asia (Singapore) was its supplier for integrated circuit memory chips.

"Sometime between 2012 and 2013, Singh entered into a conspiracy with Poo to falsify documents to record the said fictitious licensing income. Pursuant to this conspiracy, between February and October 2015, Singh instructed Poo to instruct an employee to falsify seven invoices to record a total of US$1.74 million in fictitious licensing income supposedly earned from TEA," SPF added.

Sometime from June 2015, in order to inflate the gross profits it earned, the Trek 2000 group continued to record fictitious licensing income earned from TEA and forged 11 TEA invoices to reduce the price charged by TEA for integrated circuit memory chips.

"To ensure that the group's accounts appeared balanced, the group then recorded fictitious operating expenses to offset the false increase in gross profits," SPF said.

"To record these fictitious operating expenses, Singh instructed the forgery of 15 TEA invoices and two TEA credit notes."

On Aug 15, Tan was convicted of five charges relating to the falsification of Trek 2000's financial statements, the forgery of invoices and delivery orders, and for conspiring to cheat the company's auditors.

On Oct 11, he was sentenced to 16 months in prison for these offences.

He had earlier been fined S$80,000 for failing to disclose US$10.5 million (S$14.2 million) worth of transactions. These transactions were between the Trek 2000 group and another firm he was the sole shareholder for, as well as a firm in which his son held the majority of shares.