Henry Tan (also known as Henn Tan), the founder and former CEO of SGX-listed Trek 2000, has pleaded guilty to five charges of conspiring to falsify accounts, forge documents and cheat external auditors on Aug 15.
According to The Business Times, Tan, who is also the inventor of the thumb drive, will be sentenced on Sept 22.
The judge will also consider four other similar charges levelled at Tan then.
Tan has been on remand for 1.5 months although he has been offered bail at $400,000.
The move to falsify entries in Trek 2000’s financial statements had gone as far back as from 2006 to 2011, says the broadsheet, and went unnoticed until the company’s auditors, Ernst & Young (EY) discovered that the figures were altered for the financial year 2015 (FY2015).
The tampering of the company’s figures for the FY2015 was made due to its dismal performance. Tan, at the time, had worked with other senior officers within the company to inflate its revenue and pre-tax operating profit. When asked about the transaction, Tan and his colleagues tried to convince EY that the statements were correct and that the sale was genuine.
On March 1, 2016, Trek 2000 sought for an extension of time to announce its results for the FY2015 ended Dec 31, 2015. The extension was requested due to “certain documentation deficiencies which require further audit work to be carried out by the auditors of the company”.
The “documentation deficiencies relate to documentation for certain sale transactions between a subsidiary of the company and a customer”, with the sale transactions coming up to US$3.2 million, according to a filing dated March 14, 2016.
On May 25, 2016, Singh was asked to assist with investigations by the Commercial Affairs Department (CAD). The investigations were related to a possible offence under the Penal Code.
According to the filing at the time, the CAD had requested access to Trek 2000’s accounting documents and banking records from FY2021 to FY2015, as well as all corporate and secretarial documents for the same period.
In addition, the CAD requested that the company release access to all documents relating to the transactions with Taiwanese manufacturing firm Unimicron Technology Corp. and Indian sign manufacturer Colite Technology Inc.
The CAD had also requested access to the corporate emails, computers, laptops or other IT equipment that were used by Tan, Singh, Foo Kok Wah (then president of regional sales), Dr Shew Paul Wale (then head of research and development), Poo Teng Pin (an executive director) and other employees.
On Sept 25, 2019, the Singapore Exchange Regulation (SGX RegCo) issued a query to the company following media reports that Tan and three former officers were charged by the CAD.
In the same filing, the market regulator had asked the company to confirm that the charges served were related to some of the matters highlighted in 2017 and 2018 by forensic auditor RSM Corporate Advisory.
On Sept 26, 2019, Trek 2000 stressed that the legal action was being brought upon the former management staff in their personal capacity and not on the company and its subsidiaries.
Trek 2000 had, on the same day, confirmed that the charges levelled by the CAD, were related to the matters highlighted by RSM.
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“The charges concerned interested person transaction (IPT) matters highlighted in the report of July 18, 2017, and three of the seven issues highlighted in the report of April 23, 2018,” read the statement released on Sept 26, 2019.
Following RSM’s report, SGX RegCo barred Tan, Singh, Poo and Foo from holding appointments as a director or executive officer in any Singapore-listed company for a period of three years on April 2018.
The market regulator also ordered Trek 2000 to undertake an independent review of the company’s internal controls and corporate governance practices.
Trek 2000 is now helmed by Tan’s son, Wayne, who is the company’s president and executive director.
The elder Tan stepped down from his position as chairman, CEO and executive director of the company on May 25, 2018. He assumed the role of chairman emeritus of the group from then till June 30, 2020.
In addition to his ongoing case, Tan was fined $80,000 in August 2020 after he pleaded guilty to two charges under the Securities and Futures Act (SFA), for failing to immediately disclose interested person transactions (IPTs) made.
During an interview with The Edge Singapore in April 2021, the younger Tan said “based on what we know, there has been no misappropriation of funds in the company, no malicious intent, no losses incurred to our shareholders and the company”.
He added that the incidents were “a foolish mistake on the part of the past management”. “Nobody, no company is perfect or infallible, we have looked into it, we have improved. We have complied with what the authorities want us to do, and we continue to look into how we can strengthen our internal process and corporate governance to prevent future incidents from happening again.”
As at 4.51pm, shares in Trek 2000 are trading 1.2 cents lower or 12.90% down at 8.1 cents.