Singaporean and Briton claim trial in Wirecard case over allegedly falsified documents
The allegedly falsified letters state that an accounting firm in Singapore held sums of up to €328 million in escrow accounts for Wirecard AG or its related companies.
R Shanmugaratnam (left) and James Henry O’Sullivan claimed trial at the State Courts on Jul 31, 2023 for charges related to the Wirecard case. (Photos: Ili Nadhirah Mansor/TODAY)
SINGAPORE: Two men linked to collapsed German payments firm Wirecard AG claimed trial in Singapore on Monday (Jul 31) to charges of falsifying documents related to millions held in escrow accounts.
Singaporean R Shanmugaratnam, 57, and Briton James Henry O'Sullivan, 48, denied the charges in a hearing before District Judge Kow Keng Siong in the Singapore State Courts.
Shanmugaratnam is the director and sole shareholder of Citadelle Corporate Services, a local company providing accounting and auditing services. He was in charge of the company's operations and was its signatory, with access to its OCBC bank accounts.
He became acquainted with O'Sullivan in 2010 - six years before the alleged offences - when the latter engaged Citadelle to set up companies in Singapore.
Opening its case on Monday, the prosecution, led by Deputy Public Prosecutor Gordon Oh, said it would proceed on 13 out of 14 charges for Shanmugaratnam and five out of seven charges for O'Sullivan. The remaining charges were stood down for the time being.
Shanmugaratnam's charges are for falsifying letters from Citadelle to various parties, including Wirecard AG and its subsidiaries as well as auditors in Germany and Ireland.
The letters stated that large sums of money ranging from €20 million (US$22 million) to €328 million were held by Citadelle in escrow accounts, when in fact these sums did not exist.
In five of the letters, the bank accounts stated did not exist.
The falsified letters were purportedly prepared between 2016 and 2018.
O'Sullivan's charges are for abetting by instructing Shanmugaratman to issue the letters.
The prosecution's case was that Shanmugaratnam prepared the letters wilfully and with intent to defraud - but his lawyer Megan Chia from Tan Rajah and Cheah denied this.
O'Sullivan is represented by lawyer Tito Isaac from Tito Isaac & Co.
The alleged offences occurred against the background of Wirecard's collapse in Germany. In October 2019, media outlet Financial Times wrote about Wirecard AG's suspect accounting practices.
Allegations of a concerted effort to fraudulently inflate sales and profits of Wirecard businesses in Dubai and Ireland, in order to potentially mislead Wirecard AG’s auditor, were also surfaced.
Following the report, between October 2019 and April 2020, Wirecard AG appointed KPMG AG in Germany to investigate the allegations.
KPMG AG reported that it could not verify Wirecard's revenues, as its arrangements for receivables predominantly involved payments to escrow or trust accounts held with third parties. Available records also consisted of single-sum balance confirmations, with individual transactions not specified.
In June 2020, Wirecard AG released statements that €1.9 billion held in escrow or trust accounts did not exist. It filed for insolvency in Germany.
Several individuals were arrested and are facing prosecution in Germany for offences including fraud and market manipulation.
These include Oliver Bellenhaus, the then-managing director of a related Wirecard company in Dubai, and chief operating officer Jan Marsalek - who remains at large.
PROSECUTION'S CASE
In its opening statement on Monday, the Singapore prosecution argued that Shanmugaratnam falsified letters at the behest of Bellenhaus and Marsalek, to say that Citadelle held monies for Wirecard AG or its subsidiaries in escrow accounts.
These letters were signed off by Shanmugaratnam, with the Citadelle company stamp affixed. In fact, the sums in these escrow accounts were far less than what was stated in the letters, said the prosecution.
"To prove the case against R Shanmugaratnam and O'Sullivan, and to also prove that Shamugaratnam stood to benefit from making the falsified letters, the prosecution will rely on the statements of (both) in the course of investigations which were given voluntarily, without threat, inducement or promise and recorded accurately," said Mr Oh.
The prosecution will also rely on emails and Telegram messages from Shanmugaratnam to prove its case.
Mr Oh said that the prosecution will prove that Shanmugaratnam stood to benefit financially from creating the letters, and also from a "continuing business relationship" with Marsalek, Bellenhaus and O'Sullivan.
The trial resumes on Monday afternoon with the prosecution's first witness, an OCBC bank representative, expected to testify.
The first tranche is slated to run over nine days until Aug 11.
