CH Biovest v Envy Asset Management: Statutory Avoidance, Ponzi Schemes & Fictitious Profits

In CH Biovest Pte Ltd v Envy Asset Management Pte Ltd (in liquidation) and others, the Singapore Court of Appeal dismissed an appeal by CH Biovest, an investor in a Ponzi scheme operated by Envy Asset Management (EAM). The liquidators of EAM sought to recover fictitious profits paid to CH Biovest under s 73B of the Conveyancing and Law of Property Act and s 224 of the Insolvency, Restructuring and Dissolution Act. The court found that EAM was never contractually obligated to pay profits due to the absence of actual nickel trading and upheld the lower court's decision ordering CH Biovest to repay the overwithdrawn sums.

1. Case Overview

1.1 Court

Court of Appeal of the republic of singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses the recovery of fictitious profits from a Ponzi scheme under statutory avoidance provisions, ruling against the investor.

1.7 Decision Date

3 February 2025

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
CH Biovest Pte Ltd	Appellant	Corporation	Appeal Dismissed	Lost	Kenneth Pereira of Aldgate Chambers LLC Keerthana Narayanan of Aldgate Chambers LLC David Ooi Tsu Chong of Aldgate Chambers LLC
Envy Asset Management Pte Ltd (in liquidation)	Respondent	Corporation	Judgment in favour of Respondent	Won	David Chan Ming Onn of Shook Lin & Bok LLP Daryl Fong Zhiwei of Shook Lin & Bok LLP Sarah Chew Bee Lin of Shook Lin & Bok LLP Louis Lai Wei Kang of Shook Lin & Bok LLP
Bob Yap Cheng Ghee	Respondent	Individual	Judgment in favour of Respondent	Won	David Chan Ming Onn of Shook Lin & Bok LLP Daryl Fong Zhiwei of Shook Lin & Bok LLP Sarah Chew Bee Lin of Shook Lin & Bok LLP Louis Lai Wei Kang of Shook Lin & Bok LLP
Tay Puay Cheng	Respondent	Individual	Judgment in favour of Respondent	Won	David Chan Ming Onn of Shook Lin & Bok LLP Daryl Fong Zhiwei of Shook Lin & Bok LLP Sarah Chew Bee Lin of Shook Lin & Bok LLP Louis Lai Wei Kang of Shook Lin & Bok LLP
Toh Ai Ling	Respondent	Individual	Judgment in favour of Respondent	Won	David Chan Ming Onn of Shook Lin & Bok LLP Daryl Fong Zhiwei of Shook Lin & Bok LLP Sarah Chew Bee Lin of Shook Lin & Bok LLP Louis Lai Wei Kang of Shook Lin & Bok LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Steven Chong	Justice of the Court of Appeal	No
Kannan Ramesh	Judge of the Appellate Division	Yes

4. Counsels

Counsel Name	Organization
Kenneth Pereira	Aldgate Chambers LLC
Keerthana Narayanan	Aldgate Chambers LLC
David Ooi Tsu Chong	Aldgate Chambers LLC
David Chan Ming Onn	Shook Lin & Bok LLP
Daryl Fong Zhiwei	Shook Lin & Bok LLP
Sarah Chew Bee Lin	Shook Lin & Bok LLP
Louis Lai Wei Kang	Shook Lin & Bok LLP

4. Facts

EAM operated a Ponzi scheme, falsely claiming to purchase and resell nickel.
Investors were offered returns for funding nickel purchases, but no actual trading occurred.
CH Biovest invested $5,480,246 and received $7,799,730, a $2,319,484 'profit'.
The 'profit' paid to CH Biovest came from other investors' funds.
MAS placed EAM on its Investor Alert List in March 2020.
NYZ, the key person behind EAM, was charged with cheating and fraudulent trading.
Liquidators sought to recover the $2,319,484 'profit' paid to CH Biovest.

5. Formal Citations

CH Biovest Pte Ltd v Envy Asset Management Pte Ltd (in liquidation) and others, Civil Appeal No 23 of 2024, [2025] SGCA 3

6. Timeline

Date	Event
2019-06-01	CH Biovest executed first Letter of Agreement with EAM.
2020-02-01	CH Biovest executed ninth Letter of Agreement with EAM.
2020-03-01	Monetary Authority of Singapore placed EAM on Investor Alert List.
2021-03-22	Ng Yu Zhi charged for cheating and fraudulent trading.
2021-04-27	Interim judicial managers appointed over the Envy Companies.
2021-08-16	Winding up orders were made on Envy Companies.
2024-10-16	Hearing date.
2025-02-04	Judgment date.

7. Legal Issues

Statutory Avoidance of Transactions
- Outcome: The court found that the payments were made with the intent to defraud creditors and were transactions at an undervalue, thus recoverable under statutory avoidance provisions.
- Category: Substantive
- Sub-Issues:
  - Intent to defraud creditors
  - Transaction at an undervalue
  - Inability to pay debts
Breach of Contract
- Outcome: The court held that EAM was never contractually obligated to pay profits because there was no actual nickel trading.
- Category: Substantive
- Sub-Issues:
  - Failure to perform contractual obligations
  - Non-contractual payments
Insolvency
- Outcome: The court found that EAM was hopelessly insolvent and unable to pay its debts for the purposes of s 226(2)(a) of the IRDA.
- Category: Substantive
- Sub-Issues:
  - Cash flow test
  - Inability to pay debts as they fall due

8. Remedies Sought

Recovery of Overwithdrawn Sums

9. Cause of Actions

Statutory Avoidance
Unjust Enrichment

10. Practice Areas

Commercial Litigation
Insolvency Litigation

11. Industries

Financial Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Envy Asset Management Pte Ltd (in liquidation) and others v CH Biovest Pte Ltd	General Division of the High Court	Yes	[2024] SGHC 46	Singapore	The current judgment is an appeal from this case. The facts and decision of the lower court are discussed.
Rothstar Group Ltd v Leow Quek Shiong and other appeals	Court of Appeal	Yes	[2022] 2 SLR 158	Singapore	Cited for the distinction between transactions at an undervalue and unfair preferences.
Fairfield Sentry Limited (in Liquidation) v Migani and others	Judicial Committee of the Privy Council	Yes	[2014] UKPC 9	United Kingdom	Distinguished on the facts; appellant argued that the subsequent discovery of EAM’s fraud should not affect the analysis of EAM’s contractual obligation to pay the profits on its nickel trades.
DGJ v Ocean Tankers (Pte) Ltd (in liquidation) and another appeal	Court of Appeal	Yes	[2024] SGCA 57	Singapore	Cited for the Preservation Rationale and the Distribution Rationale in the context of a company in liquidation.
Skandinaviska Enskilda Banken AB (Publ) v Conway and another (as Joint Official Liquidators of Weavering Macro Fixed Income Fund Ltd)	Privy Council	Yes	[2019] UKPC 36	United Kingdom	Cited for the approach to the construction of the contract where the directors of the investee were themselves party to the fraud and the contractual bargain was never performed.
Donell v Kowell	US Court of Appeals for the Ninth Circuit	Yes	533 F 3d 762 (9th Cir, 2008)	United States	Cited for the principle that payouts of ‘profits’ made by Ponzi scheme operators are not payments of return on investment from an actual business venture.
Quah Kay Tee v Ong and Co Pte Ltd	Court of Appeal	Yes	[1996] 3 SLR(R) 637	Singapore	Cited for the legislative history of s 73B of the CLPA, which traced back to the Statute of 13 Elizabethan 1571.
Twyne’s Case	Court of Star Chamber	Yes	(1601) 76 ER 809	England	Cited for the principle that the consideration in such case should be valuable.
Wong Ser Wan v Ng Bok Eng Holdings Pte Ltd and another	High Court	Yes	[2004] 4 SLR(R) 365	Singapore	Cited for the elements to establish a claim under s 73B of the CLPA.
Wang Xiaopu v Koh Mui Lee and others	High Court	Yes	[2023] 5 SLR 717	Singapore	Cited for the principle that it was necessary to determine whether the transaction had been undervalued because this would shed light on the question of whether Mdm Koh had provided good or valuable consideration for the property.
Lim Quee Choo v Tan Jin Sin and Others	High Court	Yes	[2008] SGHC 133	Singapore	Cited for the principle that a contract is valid even if consideration provided is only nominal.
Mercator & Noordstar NV v Velstra Pte Ltd (in liquidation)	Court of Appeal	Yes	[2003] 4 SLR(R) 667	Singapore	Discussed in relation to the meaning of 'transaction' in s 98 of the Bankruptcy Act.
Velstra Pte Ltd v Dexia Bank NV	Court of Appeal	Yes	[2005] 1 SLR(R) 154	Singapore	Cited for the view that the plain meaning of “entered into a transaction with any person” in s 98(1) connoted mutual dealings, and that a gift was an express statutory exception to the mutuality rule.
Re Hampton Capital Ltd	English High Court	Yes	[2016] 1 BCLC 374	England	Cited for the principle that mutual dealings were a clear indicium for a transaction to fall within the second limb of s 224(3)(a) of the IRDA.
BAT Industries plc and others v Sequana SA	English Court of Appeal	Yes	[2019] Bus LR 2178	England	Cited for the holding that a dividend payment could be regarded as a transaction on terms which provided for the company to receive no consideration.
Toh Eng Tiah v Jiang Angelina and another appeal	Court of Appeal	Yes	[2021] SGCA 17	Singapore	Cited for the requirements of a gift: (a) delivery of the subject matter of the gift; and (b) an intention to gift.
Cunningham v Brown	US Supreme Court	Yes	265 US 1 (1924)	United States	Cited for the principle that a Ponzi scheme is insolvent from the outset, but the court declined to adopt this principle in Singapore.
Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd)	Court of Appeal	Yes	[2021] 2 SLR 478	Singapore	Cited for the cash flow test to determine whether a company is unable to pay its debts for the purposes of s 125(2)(c) of the IRDA.
Warfield v Byron	US Court of Appeals for the Fifth Circuit	Yes	436 F 3d 551 (5th Cir, 2006)	United States	Cited for the proposition that a Ponzi scheme is, as a matter of law, insolvent from its inception.
Martino v Edison Worldwide Capital (In re Randy)	United States Bankruptcy Court, Northern District of Illinois	Yes	189 BR 425 (Bankr ND Ill, 1995)	United States	Cited for the proposition that a Ponzi scheme is, as a matter of law, insolvent from its inception.
Titan Investments Ltd Partnership (Re)	Alberta Queen’s Bench	Yes	(2005) 383 AR 323 (QB)	Canada	Cited for the principle that a Ponzi scheme is, as a matter of law, insolvent from its inception.
Samji (Trustee of) v Whitmore	British Columbia Supreme Court	Yes	[2017] BCJ No 2143	Canada	Cited for the principle that a Ponzi scheme is, as a matter of law, insolvent from its inception.
In re Taubman	United States Bankruptcy Court, Southern District of Ohio	Yes	160 BR 964 (Bankr SD Ohio, 1993)	United States	Cited for the principle that the applicable test for insolvency in the US is the balance sheet test.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Conveyancing and Law of Property Act (Cap 61, 1994 Rev Ed) s 73B	Singapore
Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) s 224	Singapore
Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) s 226(2)(a)	Singapore
Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018) s 125(2)(c)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Ponzi scheme
Fictitious profits
Overwithdrawn sums
Statutory avoidance
Transaction at an undervalue
Intent to defraud creditors
Cash flow test
Letters of Agreement
Liquidation
Insolvency

15.2 Keywords

Insolvency
Ponzi scheme
Statutory avoidance
Fraudulent conveyance
Singapore
Contract law

17. Areas of Law

Area Name	Relevance Score
Insolvency Law	95
Ponzi Schemes	95
Winding Up	90
Breach of Contract	40
Restructuring and Dissolution	30
Civil Litigation	30
Commercial Law	25
Litigation	20
Contracts	20

16. Subjects

Insolvency
Contract Law
Fraudulent Conveyance