Asia Pacific Breweries (8/10/2007) announced in a statement that two of the four banks namely Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation have withdraw their claims pertaining to the commercial fraud case of its ex-finance manager Mr Chia Teck Leng. There is no discussion or settlement reached with the two banks.

APBS is confident that the Company has a good defence and has instructed its lawyers, Drew & Napier LLC, to continue to vigorously defend the claims by the remaining two banks which are Skandinaviska Enskilda Banken AB (”SEB“) and Bayersiche Hypo-und Vereinsbank Aktiengesellschaft ( “HVB”).

For those who are unfamiliar with this case, append below some details:

About the Company

• Asia Pacific Breweries is a public listed company in Singapore. It is a joint venture between Fraser & Neave group and Heineken. APB produces the Singapore’s popular Tiger Beer.

About the fraud

• Chia Teck Leng, a former finance manager at the brewery, conned the banks into giving him credit facilities by using forged signatures in the name of the brewery, and used the money to gamble at casinos.
• (a) Chia used forged certified extracts of board resolutions to cheat several banks over a period of four years, between February 1999 to March 2003 With the forgery, he managed to extend for himself credit and loan facilities in the name of APB, with him as the sole signatory.
• (b) Chia also forged signatures of top APB executives, like its chief executive Koh Poh Tiong, and then-Fraser and Neave’s managing director, Tan Yam Pin. Fraser and Neave owns 37.9 % of APB.

About the Accused

• Chia was an accountancy graduate who began his career at the, now-defunct accounting and consultancy firm, Arthur Andersen. He moved on, attaining several top positions in various companies including the post of assistant vice-president at the United Overseas Bank, a mergers-and-acquisitions manager at Jack Chia-MPH and a financial controller at Swire Pacific Offshore Services.

• He joined Asia Pacific Breweries (APB) on 20 January 1999 as its finance manager. APB is considered one of the region’s largest breweries with sales of $372.7 million and an after-tax profit of $38.6 million in 2001. The job required him to travel and paid him a tidy salary of between $200,000 and $300,000 a year.
• Chia(aged 44) lived with his wife, a teacher, and their two teenage sons in a St Francis Lodge condominium, off Serangoon Road.
• Chia had been a habitual gambler since 1994. By the time he joined APB in 1999, he was heavily indebted.
   

Accused Of

• Chia was arrested on 2 September 2003 by the Commercial Affairs Department.
• He was first charged in court on 4 September, on two counts, one of cheating and one of forgery involving S$3 million.He was first accused of cheating a Scandinavian bank, Skandinaviska Enskilda Banken (SEB) in February 1999 of giving him $3 million in credit. As investigations continued, more charges were levelled against him.By 11 September 2003, he faced eight new charges. He was accused of cheating four banks into giving him a total credit of about S$113 million; one Scandinavian bank, two Japanese banks, and one German bank. On 17 September 2003, 18 more charges were added on. These included new charges of money withdrawals from banks, such as US$25 million from SEB, and US$10 million from Sakura Bank. On 24 September, he was charged with four more counts of forgery. This time of opening a schedule of fixed deposit with Citibank, and transferring legitimate funds from APB’s OCBC bank account to the fictitious Citibank account.Chia faced 32 charges by the end of September.On 5 December 2003, 14 new charges were added to the existing 32, bringing the total number of charges against Chia to 46.
• In summary the 46 charges comprised 14 charges of forgery and 18 of cheating four foreign banks of about S$117 million, four charges of criminal breach of trust of S$53 million, two of money-laundering, and eight of abetting his girlfriend, Li Jin, to use a forged passport.

With these 46 charges facing Chia, he was ordered to stand trial in the High Court on 26 March 2004 in what is considered the biggest case of financial fraud in the history of Singapore.

Judgement

• On 2 April 2004, Chia was convicted by the High Court after pleading guilty to six charges of forgery and eight charges of cheating. Another 32 charges were considered during sentencing. High Court Judge Tay Yong Kwang sentenced him to 42 years in jail, the longest jail term ever given out for a commercial crime.
• In all, Chia had swindled the banks of more than S$117 million, losing S$62 million in casinos around the world. Only S$34.8 million has so far been recovered.
• In this sentence, Judge Tay( who have also presided in the other commercial fraud case by SIA’s employee, Teo Cheng Kiat) emphasised that bankers are eager to forge business relationships, and not be the unwitting victims of forgery.

(PS: previously, the worst commercial fraud case was held by Singapore Airlines’ employee Teo Cheng Kiat, who embezzled S$35 million from the airline for over 13 years. He was convicted in 2000 and jailed for 24 years for the crime.)