Singapore High Court brands Malaysian duo’s failure to pay tax ‘reprehensible’

 

The Singapore High Court says there was no contractual basis to give Malaysian businessmen Shawn Ng Chee Heung and Jerald Wong Thai Hian the right to receive payments from Ice Messaging Pte Ltd. (Reuters pic)

PETALING JAYA: Two Malaysian businessmen who failed to declare and pay tax on substantial sums received by them in Singapore, purportedly as income earned between 2011 and 2013, were admonished by the republic’s High Court in a lawsuit which concluded there last week.

Four years ago, Ice Messaging Pte Ltd commenced legal action to recover a combined sum of S$308,484 (about RM956,300) from Shawn Ng Chee Heung, 48, and Jerald Wong Thai Hian, 42, on the basis that they had no right to receive the sums which had been paid to them.

In their defence, Ng and Wong contended that they were at the time employees of Ice Mobile Sdn Bhd, a sister company of Ice Messaging, and that there was in place an arrangement between the two companies for the Singapore entity to pay them commissions on the Malaysian company’s behalf.

They claimed that the payments were authorised by former CEO Bala Balamurali.

However, after a six-day trial, the High Court found that there was no contractual basis giving Ng and Wong the right to receive those payments from Ice Messaging.

Justice Lai Siu Chu also held that the arrangement was illicit as there was no board resolution authorising the payment. She said that Ng, then a director of Ice Mobile, had not disclosed the payments which he received from Ice Messaging to the Malaysian company’s board.

“Bala also did not inform the boards of either Ice Mobile or the plaintiff of the defendant’s receipt of commission from the plaintiff,” the judge noted in her grounds of judgment.

Although he was CEO at the time, Bala did not have carte blanche to pay the defendants such huge sums without at least informing Ice Messaging’s other directors as well as its shareholders, Lai wrote.

“It is also undisputed that neither Ng nor Wong have paid taxes on or declared the unauthorised commissions to either the Malaysian or Singapore tax authorities,” she said, adding that she disbelieved Ng’s claim that he had not got round to declaring his income.

“It was deliberate concealment by the defendants to save paying income tax in both countries. Such tax avoidance/evasion on the defendants’ part is reprehensible.”

Holding that Ng and Wong have been unjustly enriched, the court ordered that they repay Ice Messaging the sums of S$174,988.34 (RM542,463.85) and S$133,495.90 (RM413,837.29) respectively, with interest of 5.33% per annum from Feb 2, 2018 until payment.

They were also ordered to pay a combined sum of S$163,000 (RM505,300) in legal costs. - FMT