Phang Wah v PP: Fraudulent Trading under Companies Act & Public Interest Law
Phang Wah and another applicant appealed against their conviction for fraudulent trading under s 340 of the Companies Act. The Court of Appeal of Singapore, comprising Andrew Phang Boon Leong JA, V K Rajah JA, and Lee Seiu Kin J, dismissed the references, holding that no question of law of public interest arose. The court answered the questions out of deference to counsel's efforts, affirming the High Court's interpretation and application of s 340.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
References dismissed; no question of law of public interest arose.
1.3 Case Type
Criminal
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal on fraudulent trading conviction. Court held no public interest law arose, answering questions out of deference.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Phang Wah | Appellant | Individual | Reference Dismissed | Lost | Subhas Anandan, Sunil Sudheesan, Noor Marican, Diana Ngiam |
| Public Prosecutor | Respondent | Government Agency | Won | Won | Aedit Abdullah, April Phang, Ma Hanfeng, Yau Pui Man |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Phang Boon Leong | Justice of Appeal | Yes |
| V K Rajah | Justice of Appeal | No |
| Lee Seiu Kin | Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Subhas Anandan | RHTLaw Taylor Wessing LLP |
| Sunil Sudheesan | RHTLaw Taylor Wessing LLP |
| Noor Marican | RHTLaw Taylor Wessing LLP |
| Diana Ngiam | RHTLaw Taylor Wessing LLP |
| Philip Fong | Harry Elias Partnership LLP |
| A Sangeetha | Harry Elias Partnership LLP |
| Lionel Chan | Harry Elias Partnership LLP |
| Aedit Abdullah | Attorney-General's Chambers |
| April Phang | Attorney-General's Chambers |
| Ma Hanfeng | Attorney-General's Chambers |
| Yau Pui Man | Attorney-General's Chambers |
4. Facts
- The Applicants were involved in a multi-level-marketing business under Sunshine Empire Pte Ltd.
- The MLM scheme involved selling "lifestyle" packages to members of the public.
- CRP payouts were funded from the sale of lifestyle packages.
- The total revenue during the operation period was about $175 million.
- The total CRP payouts amounted to about $107 million.
- The Commercial Affairs Department raided Sunshine Empire’s premises on 13 November 2007.
- CRP constituted a very high proportion of Sunshine Empire’s revenue (viz, 99%).
5. Formal Citations
- Phang Wah v Public Prosecutor and another matter, Criminal Reference Nos 1 and 2 of 2012, [2012] SGCA 60
- Phang Wah and others v Public Prosecutor, , [2012] 1 SLR 646
6. Timeline
| Date | Event |
|---|---|
| Niutrend International Pte Ltd incorporated. | |
| Sunshine Empire's MLM scheme began operating. | |
| Niutrend International Pte Ltd renamed Sunshine Empire. | |
| Sunshine Empire's MLM scheme operations halted. | |
| Commercial Affairs Department raided Sunshine Empire’s premises. | |
| First Applicant applied for questions of law to be referred to the court. | |
| Second Applicant applied for an extension of time to make a similar application. | |
| Court of Appeal delivered the grounds of decision. |
7. Legal Issues
- Fraudulent Trading
- Outcome: The court upheld the conviction for fraudulent trading, finding that the applicants knowingly carried on a business with a fraudulent purpose.
- Category: Substantive
- Sub-Issues:
- Intent to defraud
- Sustainability of business model
- Actus reus
- Mens rea
- Related Cases:
- [2012] 1 SLR 646
- Interpretation of Section 340 of the Companies Act
- Outcome: The court affirmed the High Court's interpretation of s 340, holding that s 340(5) creates separate criminal liability independent of the civil liability in s 340(1).
- Category: Statutory Interpretation
- Sub-Issues:
- Pre-conditions for triggering s 340(5)
- Relationship between s 340(1) and s 340(5)
- Question of Law of Public Interest
- Outcome: The court held that no question of law of public interest arose in the present case, finding that the arguments raised concerned only factual issues.
- Category: Procedural
- Sub-Issues:
- Requirements for reserving questions of law
- Distinction between questions of law and questions of fact
- Back door appeals
- Related Cases:
- [2010] 1 SLR 966
- [2005] 3 SLR(R) 648
8. Remedies Sought
- Setting aside the conviction for fraudulent trading
9. Cause of Actions
- Fraudulent Trading
10. Practice Areas
- Criminal Appeals
- Corporate Crime
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Phang Wah and others v Public Prosecutor | High Court | Yes | [2012] 1 SLR 646 | Singapore | The judgment under appeal; the Court of Appeal upheld the High Court's decision. |
| Cigar Affair v Public Prosecutor | Singapore High Court | Yes | [2005] 3 SLR(R) 648 | Singapore | Cited for the principle that the first interpretation of a provision by the High Court does not automatically qualify for reference to the Court of Appeal. |
| In re Patrick and Lyon, Limited | English High Court | Yes | [1933] Ch 786 | England and Wales | Cited for the principle that dishonesty is the hallmark of having a fraudulent purpose. |
| Public Prosecutor v Phang Wah | District Court | Yes | [2010] SGDC 505 | Singapore | The original judgment endorsed by the High Court on appeal and commended by the Court of Appeal. |
| Bachoo Mohan Singh v Public Prosecutor | Court of Appeal | Yes | [2010] 1 SLR 966 | Singapore | Cited for the requirements that must be satisfied before the High Court can grant leave to reserve any questions of law of public interest to the Court of Appeal. |
| Ong Beng Leong v PP | Court of Appeal | Yes | [2005] 2 SLR(R) 247 | Singapore | Cited for the four requirements that have to be satisfied before the High Court can grant leave to reserve any questions of law of public interest to the Court of Appeal. |
| PP v Bridges Christopher | Court of Appeal | Yes | [1997] 3 SLR(R) 467 | Singapore | Cited for the principle that proceedings commenced and determined in the Subordinate Courts are to end in the High Court with, generally, no further recourse or avenue for appeal. |
| Abdul Salam bin Mohamed Salleh v PP | Court of Appeal | Yes | [1990] 1 SLR(R) 198 | Singapore | Cited for the principle that it is in the public interest that a person who has been wrongly convicted of any offence should be able to have it corrected on appeal. |
| Abdul Salam bin Mohamed Salleh v PP | Court of Appeal | Yes | [1991] 2 SLR(R) 344 | Singapore | Cited for the observations of the Malaysian Federal Court in A Ragunathan v Pendakwa Raya [1982] 1 MLJ 139 on what constitutes a question of law of public interest. |
| Ng Ai Tiong v PP | High Court | Yes | [2000] 1 SLR(R) 490 | Singapore | Cited for the principle that applications made under s 60 of the SCJA are to be exercised sparingly. |
| A Ragunathan v Pendakwa Raya | Malaysian Federal Court | Yes | [1982] 1 MLJ 139 | Malaysia | Cited for the proper test for determining whether a question of law raised in the course of the appeal is of public interest. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
| Companies Act (Chapter 50, 2006 Rev Ed) | Singapore |
| Criminal Procedure Code 2010 (No 15 of 2010) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Multi-level-marketing
- Consumer Rebate Privileges
- Fraudulent purpose
- Actus reus
- Mens rea
- Sustainability
- Question of law of public interest
- Back door appeal
15.2 Keywords
- Fraudulent trading
- Companies Act
- Public interest
- Criminal appeal
- MLM scheme
16. Subjects
- Criminal Law
- Company Law
- Fraud
- Appeals
17. Areas of Law
- Criminal Law
- Companies Law
- Fraudulent Trading
- Criminal Procedure