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General context, key principles and hot topics
1 Identify the highest-profile corporate investigation under way in your country, describing and commenting on its most noteworthy aspects.
One notable investigation is in relation to Agritrade International Pte Ltd (Agritrade), a commodities firm trading in palm oil and coal mining, which has been accused of fraud. It is alleged that Agritrade’s chief executive officer, Ng Xinwei, and his father, Ng Say Peck, who founded the firm, had engaged in documentary fraud and deception to misrepresent Agritrade’s financial position to various lenders. In particular, it is believed that Agritrade issued multiple bills of lading to obtain trade financing from multiple lenders for the same shipments.
Agritrade is presently undergoing a court-appointed restructuring after the Singapore court dismissed the firm’s application for a moratorium against lenders taking action in February 2020. It owes US$1.55 billion to creditors, of which US$983 million is owed to at least 20 banks. Agritrade’s secured lenders include Commerzbank, ING, MUFG, Maybank, UOB and Natixis.
There are also investigations into other commodity traders, such as ZenRock Commodities Trading Pte Ltd (believed to owe US$600 million to creditors) and Hin Leong Trading Pte Ltd (believed to owe US$3.85 billion to 23 banks). These cases put the risks of commodity trading and finance in the spotlight. Banks are now taking a collaborative approach to developing a set of best practices for the commodities industry, supported by the Monetary Authority of Singapore (MAS), Enterprise Singapore, the Accounting and Corporate Regulatory Authority and the Association of Banks in Singapore.
2 Outline the legal framework for corporate liability in your country.
Corporate entities can be held criminally liable. The Interpretation Act (Cap. 1) expressly states that a ‘person’ includes ‘any company or association or body of persons, corporate or unincorporate’ unless the relevant legislation expressly provides otherwise or there is something in the subject or context that is inconsistent with such a construction. As such, a corporate entity can be charged with an offence, whether or not the legislation refers specifically to corporate entities.
This is also borne out in Singapore’s main criminal legislation, the Penal Code (Cap. 224), which provides expressly that ‘persons’ liable to punishment under the Penal Code include ‘any company or association or body of persons, corporate or unincorporate’.
There are also various pieces of legislation that contain offences specifically directed at corporate entities. For example, criminal liability can arise on the part of a corporate entity for market misconduct under Part X of the Securities and Futures Act (Cap. 289) (SFA) if the offence is committed by an employee or an officer of a corporate entity with the consent or connivance of the corporate entity and for the benefit of that corporate entity (section 236B), whereas a corporate entity may be liable to an order for a civil penalty if the corporate entity fails to prevent or detect a contravention, if that contravention is committed for the benefit of the corporate entity and is attributable to the negligence of the corporate entity (section 236C).
3 Which law enforcement authorities regulate corporations? How is jurisdiction between the authorities allocated? Do the authorities have policies or protocols relating to the prosecution of corporations?
The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of business entities, public accountants and corporate service providers. ACRA’s Compliance Division, comprising an Enforcement Department and a Prosecution Department, undertakes investigations and prosecutions of breaches of various laws under ACRA’s purview, including the Companies Act (Cap. 50).
MAS is the central bank, which administers and enforces the SFA. Apart from the prosecution of criminal offences under the SFA, MAS is also responsible for the enforcement of civil penalties for market misconduct and for supervising financial institutions.
The Singapore Exchange Regulation Pte Ltd is an independent regulatory subsidiary of the Singapore Exchange (SGX), which oversees the regulation of companies listed on the SGX.
The Competition and Consumer Commission of Singapore (CCCS) is the national agency that administers and enforces the Competition Act (Cap. 50B). This Act empowers the CCCS to investigate and adjudicate anticompetitive activities, issue directions to stop or prevent anticompetitive activities and impose financial penalties. The CCCS is also the administering agency of the Consumer Protection (Fair Trading) Act (Cap. 52A), which protects consumers against unfair trade practices in Singapore.
The Commercial Affairs Department (CAD), which is a specialist department of the Singapore Police Force (SPF), is the principal white-collar crime investigation agency. It investigates a wide range of commercial and financial crimes, including offences under the SFA. In 2015, MAS and CAD announced a collaboration to undertake joint investigations into market misconduct offences such as insider trading and market manipulation. In March 2018, this arrangement was extended to cover all offences under the SFA and the Financial Advisers Act, to allow for greater efficiency and more effective enforcement of capital markets and financial advisory offences.
The Corrupt Practices Investigation Bureau (CPIB) is the only agency authorised to investigate corruption offences under the Prevention of Corruption Act (Cap. 241) (PCA) and other related offences. The CPIB is a government agency under the Prime Minister’s Office and is independent of the SPF.
4 What grounds must the authorities have to initiate an investigation? Is a certain threshold of suspicion necessary to trigger an investigation?
A police officer will ordinarily initiate investigations when information about an arrestable criminal offence is received. There is no specific threshold of suspicion necessary to trigger a police investigation.
Insofar as regulators such as MAS and the SGX are concerned, the relevant legislation provides them with investigative powers.
There is no specific threshold of suspicion necessary for MAS to initiate an investigation into an alleged or suspected contravention of the SFA so long as it considers an investigation ‘necessary or expedient’ (SFA, section 152).
Under the SGX (Mainboard) Listing Rules, the SGX may conduct an investigation if the SGX has reason to believe that there is a possibility that any of its rules have been contravened, a written complaint is received or the SGX is of the opinion that the circumstances warrant it.
5 How can the lawfulness or scope of a notice or subpoena from an authority be challenged in your country?
A notice or subpoena from a law enforcement authority may be challenged by asking the court to quash it or prohibit further action by the relevant law enforcement authority.
A search warrant issued by the Singapore courts under the Criminal Procedure Code (Cap. 68) (CPC) may be suspended or cancelled if there are good reasons for doing so.
6 Does your country make use of co-operative agreements giving immunity or leniency to individuals who assist or co-operate with authorities?
Deferred prosecution agreements (DPAs) were implemented in Singapore on 31 October 2018 through amendments to the CPC. Prosecutors can enter into a DPA with corporate offenders, under which there may be no prosecution in exchange for compliance with a series of conditions. Conditions to a DPA range from producing documents to assisting in investigations. They aim not only to penalise the entity but also to ensure that the entity does not repeat the offence in the future. DPAs must be approved by the High Court and published after approval is given. The High Court must be satisfied that the agreement is in the interests of justice and its terms are fair, reasonable and appropriate.
Other than DPAs, co-operation with authorities can be a significant mitigating factor. For instance, a conditional warning in lieu of prosecution was issued to Keppel Offshore & Marine Ltd in view of the substantial co-operation rendered by the company during investigations.
7 What are the top priorities for your country’s law enforcement authorities?
Singapore has a zero tolerance of corruption and prides itself on its clean and incorrupt system. This continues to be a top priority.
Cybercrime and money laundering are also key priorities in ensuring that a resilient system with high integrity is maintained for Singapore’s financial institutions and the financial sector, not least because cybercrime is the fastest-growing type of transnational crime in Singapore.
In this context, the Payment Services Act (PSA), which was passed on 14 January 2019 and came into effect on 30 July 2020, sets out a flexible and forward-looking framework to regulate payment systems and payment service providers in Singapore. The PSA ensures that all payment service providers holding a licence under the PSA meet the requirements in respect of anti-money laundering and countering the financing of terrorism, given that payment services may be used for money laundering or terrorism financing.
8 To what extent do law enforcement authorities in your jurisdiction place importance on a corporation having an effective compliance programme? What guidance exists (in the form of official guidance, speeches or case law) on what makes an effective compliance programme?
There is plenty of guidance available for corporations seeking to implement an effective compliance programme, a process which is widely encouraged in Singapore. For instance, the CPIB designed PACT: A Practical Anti-Corruption Guide for Business in Singapore, which sets out guidelines and suggestions to companies when implementing an anti-corruption system. MAS also collaborated with CAD to launch the Anti-Money Laundering and Countering the Financing of Terrorism Industry Partnership (ACIP) to identify, assess and mitigate money laundering, terrorism financing and proliferation financing (AM/TF/PF) risks faced by Singapore. As part of ACIP’s efforts, best practices papers were issued to provide practical guidance when implementing AM/TF/PF controls so as to ensure that industries are able to put in place better systems to detect financial crimes.
In addition, companies listed on the SGX are required to comply with the Code of Corporate Governance (CCG) or explain any non-compliance. Under the CCG, independent directors with a limited tenure of nine years are to be appointed to the board; separate audit, remuneration and nomination committees are to be set up; stringent internal audit and internal controls must be put in place; and listed companies are subject to enhanced disclosures.
9 Does your country regulate cybersecurity? Describe the approach of local law enforcement authorities to cybersecurity-related failings.
The Cybersecurity Act 2018 (No. 9 of 2018) (CSA) provides a regulatory framework with a focus on protecting critical information infrastructures and to prevent, manage and respond to cybersecurity threats. The Commissioner of Cybersecurity is empowered to oversee all aspects of cybersecurity, and may require remedial action to be taken or certain activities to cease.
The CSA operates in tandem with the patchwork of existing legislation that promotes cybersecurity, such as the Personal Data Protection Act 2012 (PDPA). Non-compliance with the PDPA or CSA may result in enforcement actions and financial penalties of up to S$1 million.
Corporations are expected to comply with sector-specific codes of practice. For instance, the Notice on Technology Risk Management issued by MAS, the Telecommunication Cybersecurity Code of Practice for major internet service providers, and the Business Continuity Readiness Assessment Framework for public sector agencies. In addition, organisations are required to protect personal data in their possession or under their control by making reasonable security arrangements under the PDPA.
10 Does your country regulate cybercrime? What is the approach of law enforcement authorities in your country to cybercrime?
Cybercrime is regulated mostly under the Computer Misuse Act (CMA). However, cybercrime can also constitute offences under the Penal Code and the PDPA. The Singapore Police Force’s Technology Crime Division within the Criminal Investigation Department has wide investigative powers and works closely with Interpol in combating cybercrime internationally.
Cross-border issues and foreign authorities
11 Does local criminal law have general extraterritorial effect? To the extent that extraterritorial effect is limited to specific offences, give details.
Generally, Singapore’s criminal law does not have extraterritorial effect. However, there are certain offences that do have extraterritorial effect, such as corruption offences under the PCA. The provisions of the PCA set forth extraterritorial powers to deal with corrupt acts committed by a Singapore citizen outside Singapore as though the acts were committed in Singapore (PCA, section 37).
Further, section 29 of the PCA, when read with sections 108A and 108B of the Penal Code (which deals with the abetment of corruption offences), can attach criminal liability to a person who, from Singapore, abets the commission outside Singapore of any act in relation to the affairs or business or on behalf of a principal residing in Singapore that, if committed in Singapore, would be an offence under the PCA.
12 Describe the principal challenges that arise in your country in cross-border investigations, and explain whether and how such challenges depend on the other countries involved.
Investigations that require the assistance of foreign authorities may be hampered by the level of international co-operation. Singapore is a party to various international conventions and treaties that facilitate the provision and obtaining of international assistance in criminal matters, including the Treaty on Mutual Legal Assistance in Criminal Matters. Some of these have been incorporated into Singapore’s laws, such as the Mutual Assistance in Criminal Matters Act (Cap. 190A) (MACMA), the Corruption, Drug Trafficking and Other Serious Crimes Act (Confiscation of Benefits) Act (Cap. 65A) (CDSA) and the Terrorism (Suppression of Financing) Act (Cap. 325) (TSOFA).
International co-operation between MAS and other central banks is also provided for under the Monetary Authority of Singapore Act (Cap. 186) (the MAS Act).
13 Does double jeopardy, or a similar concept, apply to prevent a corporation from facing criminal exposure in your country after it resolves charges on the same core set of facts in another? Is there anything analogous in your jurisdiction to the ‘anti-piling on’ policy as exists in the United States (the Policy on Coordination of Corporate Resolution Penalties) to prevent multiple authorities seeking to penalise companies for the same conduct?
Singapore laws protect against double jeopardy, that is to say a person who has been convicted or acquitted of an offence cannot be tried again for the same offence. However, the issue as to whether international double jeopardy applies in Singapore remains unresolved.
Insofar as offences under the PCA are concerned, section 37(2) of the PCA addresses this situation by stating that, once proceedings in respect of an act committed outside Singapore have been commenced in Singapore, this shall be a bar to further proceedings against a person for his or her extradition for the same offence outside Singapore.
Singapore does not have any specific ‘anti-piling on’ policy at present. However, MAS and CAD have a Joint Investigations Arrangement to cover all offences under the SFA and the Financial Advisors Act, allowing both agencies to consolidate their investigative resources and improve effectiveness of market misconduct investigations.
14 Are ‘global’ settlements common in your country? What are the practical considerations?
No. The first known global resolution in relation to a Singapore company was arrived at only in December 2017.
15 What bearing do the decisions of foreign authorities have on an investigation of the same matter in your country?
Decisions made by foreign authorities would generally be of interest to local investigators in respect of the same matter in Singapore. It may also have a bearing on the pace of investigations in Singapore.
Economic sanctions enforcement
16 Describe your country’s sanctions programme and any recent sanctions imposed by your jurisdiction.
Singapore implements United Nations Security Council sanctions through the United Nations Act (Cap. 339) for non-financial institutions and individuals and the MAS Act (Cap. 186) for financial institutions. The International Convention for the Suppression of Financing of Terrorism is given effect in Singapore through the Terrorism (Suppression of Financing) Act (Cap. 325), which not only criminalises terrorism financing but also prohibits any person in Singapore from dealing with or providing services to a terrorist entity, including those designated in the Act.
17 What is your country’s approach to sanctions enforcement? Has there been an increase in sanctions enforcement activity in recent years, for example?
Sanctions implemented in Singapore are enforced by the Singapore Customs, MAS and the Inter-Ministerial Committee on Terrorist Designation. Recent years have seen a rise in the number of prosecutions for sanctions violations, such as Chinpo Shipping Company being fined for transferring money that could have contributed to North Korea’s nuclear-related activities in 2016.
In 2018, T Specialist International and its director, Ng Kheng Wah, were charged in Singapore for, among other things, the supply of sanctioned luxury goods to North Korea in breach of UN sanctions against North Korea. Ng Kheng Wah was sentenced to two years and 10 months’ jail on 22 November 2019 after pleading guilty to 10 charges under the United Nations Act and 10 cheating charges, with another 140 charges taken into consideration. T Specialist International was fined S$880,000.
In June 2020, as part of the T Specialist saga, a North Korean who was the bridge of communication between T Specialist and contacts in North Korea, was sentenced to four weeks in jail after pleading guilty to four charges of abetting the supply of prohibited luxury goods to North Korea under the United Nations Act, with 10 charges taken into consideration.
18 Do the authorities responsible for sanctions compliance and enforcement in your country co-operate with their counterparts in other countries for the purposes of enforcement?
Under the CDSA, a mechanism is available for financial intelligence to be shared with financial intelligence units of other jurisdictions. Assistance may also be provided pursuant to MACMA. However, Singapore does not enforce unilateral sanctions imposed by other countries.
19 Has your country enacted any blocking legislation in relation to the sanctions measures of third countries? Describe how such legislation operates.
Singapore has not enacted any blocking legislation.
20 To the extent that your country has enacted any sanctions blocking legislation, how is compliance enforced by local authorities in practice?
Singapore has not enacted any blocking legislation.
Before an internal investigation
21 How do allegations of misconduct most often come to light in companies in your country?
Allegations of misconduct are often brought to light by whistleblowers making complaints directly to companies or to law enforcement authorities.
Apart from complaints of misconduct, which may be lodged with the law enforcement authorities, reports lodged pursuant to disclosure obligations under the CDSA in respect of property that are reasonably suspected of being connected to criminal activity are called ‘suspicious transaction reports’. These reports are lodged with the Suspicious Transaction Reporting Office, which is Singapore’s financial intelligence unit. While these suspicious transaction reports are property-based and for the purpose of combating money laundering, the SPF may also initiate investigations into misconduct associated with the property.
Internal investigations into misconduct may also be initiated pursuant to internal or external audits conducted by a company.
22 Does your country have a data protection regime?
Personal data in Singapore is protected under the PDPA, which took effect in phases beginning in January 2013. The Act governs the collection, use, disclosure, transfer and security of an individual’s personal data.
Certain personal information is also protected under various statutes, such as the Banking Act (Cap. 19), the CDSA and the common law of confidentiality.
23 To the extent not dealt with above at question 9, how is the data protection regime enforced?
The PDPA ensures a baseline standard of protection for personal data, which requires organisations to comply with the PDPA as well as common law and other relevant laws that are applied to the industry they are part of, when handling personal data in their possession.
If the Personal Data Protection Commission finds that an organisation is in breach of any of the data protection provisions in the PDPA, it may give the organisation such directions as it thinks appropriate to ensure compliance.
There are also offences under the PDPA for which an organisation or a person may be liable.
24 Are there any data protection issues that cause particular concern in internal investigations in your country?
The PDPA provides that an organisation may collect personal data about an individual with the consent of the individual (data subject) or from a source other than the data subject in circumstances where collection is necessary for any investigation or proceedings, if it is reasonable to expect that seeking the consent of the data subject would compromise the availability or the accuracy of the personal data.
The PDPA also provides that an organisation may use or disclose personal data about a data subject without the consent of the data subject where the use is necessary for any investigation or proceeding.
25 Does your country regulate or otherwise restrict the interception of employees’ communications? What are its features and how is the regime enforced?
Communications such as emails are not considered as personal data for the purposes of the PDPA. As such, the interception of employees’ communications per se is permitted insofar as it does not amount to a contravention of the CMA. Insofar as they contain personal data, interception without consent is permitted so long as the collection of the data is reasonable for the purposes of managing the employment relationship, which include monitoring how employees use company network resources.
Organisations in breach may be subject to a financial penalty of up to S$1 million in addition to civil proceedings.
Dawn raids and search warrants
26 Are search warrants or dawn raids on companies a feature of law enforcement in your country? Describe any legal limitations on authorities executing search warrants or dawn raids, and what redress a company has if those limits are exceeded.
Search warrants and raids on companies are features of law enforcement in Singapore.
The person granted a search warrant must conduct the search in accordance with the warrant and with the CPC, including conducting the entry and search during a period specified in the warrant.
A court issuing a search warrant may suspend or cancel the warrant if there are good reasons to do so.
There are also instances when searches can be carried out by the SPF even without search warrants, for example if there is reasonable cause for suspicion that stolen property is concealed and a police officer of or above the rank of sergeant has good grounds for believing that, by reason of delay in obtaining a search warrant, the property is likely to be removed (CPC, section 32).
If an illegal search is conducted, the aggrieved party may make a criminal complaint for trespass or criminal force, or commence a civil claim for damages in the tort of trespass.
27 How can privileged material be lawfully protected from seizure during a dawn raid or in response to a search warrant in your country?
There is no prescribed process to protect privileged material during a dawn raid or search. As a practical measure, the company or individual should assert privilege during the dawn raid or search itself regarding the relevant material seized by the authorities and follow up thereafter with the authorities to claim privilege over the same.
28 Under what circumstances may an individual’s testimony be compelled in your country? What consequences flow from such compelled testimony? Are there any privileges that would prevent an individual or company from providing testimony?
Under section 283(2) of the CPC, the court may issue a summons to compel the appearance of a witness if that person’s evidence is essential to making a just decision at the close of the case for the defence, or at the end of any proceeding under the CPC. In addition, there are other statutes that confer the power on authorities to require the attendance of witnesses for examination. For instance, MAS has the power to require persons to be examined (SFA, section 154), and evidence obtained by the MAS in this regard may be used in criminal investigations and proceedings (SFA, section 168B).
The Singapore courts are permitted to draw an adverse inference against an accused under section 261(1) of the CPC from a failure to disclose to the police facts that he or she subsequently relies on in his or her defence at trial.
There is a right against self-incrimination in Singapore under section 22(2) of the CPC whereby a person need not say anything that might expose him or her to a criminal charge, penalty or forfeiture. However, the police do not have to inform the accused of the right against self-incrimination.
An advocate, solicitor or in-house counsel would be prohibited from disclosing any communications covered by legal privilege (Evidence Act, sections 128 and 128A). Further, a person would not be permitted to produce any unpublished official records relating to the affairs of the state (Evidence Act, section 125).
Whistleblowing and employee rights
29 Describe the whistleblowing framework in your country. What financial incentive schemes exist for whistleblowers? What legal protections are in place for whistleblowers?
There is no general whistleblowing law in Singapore. Listed companies are required to disclose the existence of a whistleblowing policy but beyond this, there are no hard and fast rules, including whether a whistleblower may be financially incentivised, as to the implementation of a whistleblowing policy within an organisation.
The PCA protects whistleblowers in that no complaints of an offence under the PCA can be admitted in evidence in any civil or criminal proceeding whatsoever, and no witness shall be obliged or permitted to disclose the name or address of any informer, or state any matter that might lead to the discovery of a person’s identity.
A suspicious transaction report lodged pursuant to section 39(1) of the CDSA is also confidential and cannot be admitted in evidence in any civil or criminal proceeding whatsoever, and no witness shall be obliged or permitted to disclose the name or address of any informer, or answer any question if the answer thereto would lead, or would tend to lead, to the discovery of the name or address of the informer.
Auditors are also protected from defamation suits when reporting fraud in good faith under the Companies Act.
30 What rights does local employment law confer on employees whose conduct is within the scope of an investigation? Is there any distinction between officers and directors of the company for these purposes?
For employees covered under the Employment Act (Cap. 91), which generally covers all employees with certain exceptions, such as managers or executives with a monthly basic salary of more than S$4,500, the employer may suspend the employee from work during an inquiry, but any suspension cannot exceed one week and the employee should be paid at least half his or her salary during the suspension.
Employees are also protected against wrongful dismissal under common law. Directors and officers of a company are treated no differently from employees in terms of protection under common law.
31 Do employees’ rights under local employment law differ if a person is deemed to have engaged in misconduct? Are there disciplinary or other steps that a company must take when an employee is implicated or suspected of misconduct, such as suspension or in relation to compensation?
For employees covered under the Employment Act (Cap. 91), which generally covers all employees with certain exceptions, such as seafarers and domestic workers, an employer can dismiss an employee, or take disciplinary action against an employee, only on the ground of conduct that is inconsistent with the fulfilment of the express or implied terms of his or her service after due inquiry. There is no fixed procedure for an inquiry but, as a general guide, the person or persons hearing the inquiry should not be in a position that may suggest bias, and the employee who is being investigated for misconduct should have the opportunity to present his or her case.
There are no particular disciplinary or other steps that a company must take, subject to the company’s own internal policies and procedures, and the terms of employment.
32 Can an employee be dismissed for refusing to participate in an internal investigation?
Subject to the applicability of the Employment Act to employees who are covered by the Act, generally a company may terminate the employment of an employee in accordance with the terms of the employment contract. As such, subject to the terms of the employment contract, an employee may be dismissed for refusing to participate in an internal investigation.
Commencing an internal investigation
33 Is it common practice in your country to prepare a document setting out terms of reference or investigatory scope before commencing an internal investigation? What issues would it cover?
Yes, it is – particularly for larger-scale internal investigations. It would typically cover the objectives of the internal investigation, the scope of investigation, the identity and roles of the investigation team and any restriction or protocol on communications or information flow regarding the investigation.
34 If an issue comes to light prior to the authorities in your country becoming aware or engaged, what internal steps should a company take? Are there internal steps that a company is legally or ethically required to take?
If an issue comes to light, the company should first activate its in-house legal counsel or engage external counsel (or both) to obtain advice (including in respect of any interim measures that should be taken, and its disclosure obligations, if any) and commence an internal investigation.
The company may have an obligation to report to the authorities (for example, in respect of certain specified offences under the Penal Code pursuant to section 424 of the CPC, or its obligation to file a suspicious transaction report under the CDSA) or to make any public disclosures (if it is a listed company).
35 What internal steps should a company in your country take if it receives a notice or subpoena from a law enforcement authority seeking the production or preservation of documents or data?
The company would be required to comply with the notice or subpoena and should take immediate steps to obtain legal advice, and implement the identification, extraction and preservation of the relevant documents and data. The company should ideally also take steps to ensure that copies of the documents and data are made and retained.
36 At what point must a company in your country publicly disclose the existence of an internal investigation or contact from a law enforcement authority?
A listed company must make timely disclosure of any information it has concerning itself or any of its subsidiaries or associated companies that is either ‘necessary to avoid the establishment of a false market in [its] securities’ or ‘that would be likely to materially affect the price or value of its securities’ under Rule 703 of the SGX (Mainboard) Listing Rules.
An intentional or reckless failure to disclose under Rule 703 is a criminal offence under section 203 of the SFA, for which the directors of the listed company may also be liable.
There is no obligation on private companies to publicly disclose any information, including the existence of an internal investigation or contact from law enforcement officials.
37 How are internal investigations viewed by local enforcement bodies in your country?
Internal investigations are generally welcomed by law enforcement authorities. Additionally, financial institutions regulated by MAS are generally expected to conduct internal investigations in cases involving certain types of misconduct by their licensed representatives.
38 Can the attorney–client privilege be claimed over any aspects of internal investigations in your country? What steps should a company take in your country to protect the privilege or confidentiality of an internal investigation?
A company may claim litigation privilege over investigation reports and documents created during an internal investigation if there is a reasonable prospect of litigation at the time the documents are created, and the dominant purpose for the creation of the documents over which privilege is claimed is pending or contemplated litigation.
Legal advice privilege can also be claimed for a document if there is legal advice embedded in it, or it was created for the dominant purpose of provision to legal counsel for the purpose of seeking legal advice.
To ensure that privilege is protected, legal counsel, whether external or in-house, should be substantially involved in the investigations, particularly when conducting interviews of witnesses. However, it should be noted that merely copying legal counsel in correspondence is not enough to attract privilege, and that the contents themselves have to satisfy the requirements for privilege. It would also be good practice not to mix legal and business advice in the same document, and marking advice as ‘confidential and legally privileged’ would assist in identifying privileged material (even though the labelling itself does not create privilege).
Generally, to ensure that the confidentiality of an internal investigation is maintained, the company should put in place a communications protocol and limit the communications, reports and any advice regarding the investigations to specified individuals within the company on a need-to-know basis.
39 Set out the key principles or elements of the attorney–client privilege in your country as it relates to corporations. Who is the holder of the privilege? Are there any differences when the client is an individual?
Legal professional privilege is found in two principal forms – litigation privilege and legal advice privilege. When a document is protected by either form, it is exempted from disclosure in litigation.
Legal advice privilege attaches to legal advice and communications between a lawyer (whether in-house or external legal counsel) and a client (or the company, as the case may be in the context of an in-house legal counsel) for the purpose of seeking legal advice, whether or not litigation is contemplated.
Litigation privilege will apply to documents and communications created for the dominant purpose of pending or contemplated litigation, and if there is a reasonable prospect of litigation at the time the documents are created.
Legal professional privilege belongs to the client, regardless of whether the client is an individual or a corporate entity.
40 Does the attorney–client privilege apply equally to in-house and external counsel in your country?
Yes, pursuant to section 131 of the Evidence Act (Cap. 97).
41 Does the attorney–client privilege apply equally to advice sought from foreign lawyers in relation to (internal or external) investigations in your country?
Common law rules of legal professional privilege pertaining to foreign lawyers apply in Singapore and are effectively as extensive as legal professional privilege under section 131 of the Evidence Act.
42 To what extent is waiver of the attorney–client privilege regarded as a co-operative step in your country? Are there any contexts where privilege waiver is mandatory or required?
Waiver of legal professional privilege is often viewed by the authorities as a co-operative step. There is no prescribed context in which waiver of legal professional privilege is mandatory or required. However, it is not unheard of for regulatory authorities, in certain circumstances, to request that a company waives privilege over an internal investigation report that is required to be submitted to the authorities.
43 Does the concept of limited waiver of privilege exist as a concept in your jurisdiction? What is its scope?
Yes. For example, in the case of United Overseas Bank Ltd v. Lippo Marina Collection Pte Ltd and others  4 SLR 391, the High Court found that in a multiparty litigation, selective disclosure to an adverse party of any documents to which litigation privilege applies does not waive the litigation privilege generally. In this regard, whether privilege is waived depends on the context of the disclosure and its effect on the confidentiality of the document concerned.
44 If privilege has been waived on a limited basis in another country, can privilege be maintained in your own country?
This question has not been determined specifically in Singapore. However, it is noted that the concept of limited waiver of privilege exists in Singapore.
45 Do common interest privileges exist as concepts in your country? What are the requirements and scope?
Common interest privilege can be used to enable party B to shield behind the privilege of party A and prevent party C from obtaining or using documents from B that were provided to B pursuant to the common interest between A and B in the subject matter of the documents.
Common interest privilege can also be used to enable A to obtain documents from B, which B can withhold on the ground of privilege against the rest of the world, on the basis that it is inconsistent with the common interest for B to claim privilege against A in relation to these documents.
46 Can privilege be claimed over the assistance given by third parties to lawyers?
Yes, if the documents created with the assistance of third parties fall within the scope of litigation privilege or legal advice privilege, for example if a document was created by a third party who was acting as the client’s agent at the time, for the dominant purpose of obtaining legal advice.
47 Does your country permit the interviewing of witnesses as part of an internal investigation?
There is no prohibition against witness interviews as part of an internal investigation.
48 Can a company claim the attorney–client privilege over internal witness interviews or attorney reports?
Yes, if records of the interview fall within the scope of litigation privilege.
49 When conducting a witness interview of an employee in your country, what legal or ethical requirements or guidance must be adhered to? Are there different requirements when interviewing third parties?
There are no specific requirements that must be adhered to for a witness interview of employees or third parties. However, it is good practice to state up-front during an interview whom the interviewers represent and, where appropriate, make it clear that they are not acting for the employee. This is to avoid any potential claims of conflict of interest.
It would also be advisable to involve legal counsel to ensure that witness interviews are conducted with the benefit of legal advice, and to ensure that any statements taken during internal investigations may properly be protected by privilege.
50 How is an internal interview typically conducted in your country? Are documents put to the witness? May or must employees in your country have their own legal representation at the interview?
Generally, an interview starts with the interviewer explaining the purpose of the interview and highlighting that it should be kept confidential. Questions will be asked and if these questions relate to certain documents, these documents are usually put to the witness during the interview.
When allegations are being made against an employee, it is advisable to give the employee an opportunity to seek legal advice.
Reporting to the authorities
51 Are there circumstances under which reporting misconduct to law enforcement authorities is mandatory in your country?
Yes. Section 39 of the CDSA imposes an obligation to lodge ‘suspicious transaction reports’ in respect of property that is reasonably suspected to be connected to criminal activity. Section 424 of the CPC also imposes an obligation to file a police report in respect of specified offences under the Penal Code.
52 In what circumstances might you advise a company to self-report to law enforcement even if it has no legal obligation to do so? In what circumstances would that advice to self-report extend to countries beyond your country?
Self-reporting and co-operation would generally be seen as mitigating factors and would also provide an avenue for dialogue with the law enforcement authorities.
Companies should bear in mind that any self-reporting in a particular jurisdiction may trigger reporting or disclosure obligations in other jurisdictions.
53 What are the practical steps you need to take to self-report to law enforcement in your country?
Before making any self-report, a company should first undertake an internal investigation and obtain legal advice on the scope of the company’s disclosure obligations and potential liability.
Responding to the authorities
54 In practice, how does a company in your country respond to a notice or subpoena from a law enforcement authority? Is it possible to enter into dialogue with the authorities to address their concerns before or even after charges are brought? How?
It is common, and indeed advisable, for a company to engage legal counsel upon receipt of any notice or subpoena from a law enforcement authority to seek advice on compliance therewith.
It may be possible to enter into dialogue with the authorities, depending on the nature of the investigations. It is also possible to engage in plea bargaining with the prosecutor even after charges are brought.
55 Are ongoing authority investigations subject to challenge before the courts?
It depends on whether the aggrieved persons satisfy the requirements for judicial review, and whether the relevant acts are justiciable in the first place.
56 In the event that authorities in your country and one or more other countries issue separate notices or subpoenas regarding the same facts or allegations, how should the company approach this?
It is important to ensure that a consistent position is taken across the various investigations in the different countries. To this end, the company may wish to engage legal counsel to coordinate the investigations.
57 If a notice or subpoena from the authorities in your country seeks production of material relating to a particular matter that crosses borders, must the company search for, and produce material, in other countries to satisfy the request? What are the difficulties in that regard?
If the material is in the possession or power of a company, the company must search for and produce the material, wherever that material may be located but provided that the material actually belongs to the company.
Issues might arise in circumstances where the data servers or material are maintained by third parties or related companies not in Singapore. In these circumstances, the Singapore company may nonetheless choose to co-operate and offer assistance to provide access to these data servers or materials.
58 Does law enforcement in your country routinely share information or investigative materials with law enforcement in other countries? What framework is in place in your country for co-operation with foreign authorities?
Yes, this is provided for under MACMA, the CDSA, the TSOFA and the MAS Act (see question 12).
59 Do law enforcement authorities in your country have any confidentiality obligations in relation to information received during an investigation or onward disclosure and use of that information by third parties?
Generally, yes, depending on the relevant legislation empowering the investigations. See, for example, Part VC of the MAS Act relating to assistance to foreign authorities and domestic authorities for their supervisory and other actions in respect of money.
60 How would you advise a company that has received a request from a law enforcement authority in your country seeking documents from another country, where production would violate the laws of that other country?
The company should obtain legal advice from counsel in the foreign country to ascertain the potential liability if the documents were produced, and have its foreign and local legal counsel work together to explore a solution or establish whether it would be possible to resist the production or mitigate its exposure overseas.
61 Does your country have secrecy or blocking statutes? What related issues arise from compliance with a notice or subpoena?
No, but Singapore has general statutory provisions that prevent disclosure of matters relating to state interests.
62 What are the risks in voluntary production versus compelled production of material to authorities in your country? Is this material discoverable by third parties? Is there any confidentiality attached to productions to law enforcement in your country?
In practice, the law enforcement authorities generally maintain the confidentiality of material provided to them, whether voluntarily or because they are compelled to do so.
However, foreign law enforcement authorities may request assistance and the sharing of information or documents, whether informally or formally, pursuant to the relevant legislation or treaties. Confidentiality measures may be put in place for the sharing of such information or documents. For example, assistance provided by MAS under the MAS Act in some circumstances requires the receiving authority to provide an undertaking to protect the confidentiality of information or documents.
Prosecution and penalties
63 What types of penalties may companies or their directors, officers or employees face for misconduct in your country?
If a company is found guilty of a criminal offence, the typical penalty is a fine.
A company’s directors, officers or employees found guilty of a criminal offence may generally be subject to imprisonment or fines.
Further, a company or individual found guilty of a criminal offence may be required by a court to pay compensation.
Other than criminal and civil liability, companies or their directors, officers or employees may also be subject to sanctions or civil penalties imposed by regulatory bodies such as the SGX and MAS.
A court may also order a third party who has benefited from misconduct to disgorge benefit arising from that misconduct, on the application of MAS or any other claimant pursuant to section 236L of the SFA.
64 Where there is a risk of a corporate’s suspension, debarment or other restrictions on continuing business in your country, what options or restrictions apply to a corporate wanting to settle in another country?
The Standing Committee on Debarment (SCOD) decides all cases of debarment. The relevant grounds for debarment from government contracts include:
- cheating or attempted cheating;
- giving false information that has a material bearing on the award or performance of the contract;
- corruption in connection with a government agency or contract;
- compromise of national security or public interest;
- repeated defaults; and
- bid rigging.
Except for cases involving CPIB or CCCS investigations, government agencies generally would warn the defaulting companies in writing of the intention to debar them and the grounds for the action before a case is submitted to SCOD. This would give the defaulting contractor the opportunity to make a business trade-off between proceeding with the contract or facing the possibility of debarment. The defaulting contractor will also be given an opportunity to explain why it has defaulted.
65 What do the authorities in your country take into account when fixing penalties?
There are various mitigating factors that may be taken into account by a court when considering an appropriate sentence, including:
- co-operation with the authorities;
- lack of record; and
- voluntary restitution or compensation.
Resolution and settlements short of trial
66 Are non-prosecution agreements or deferred prosecution agreements available in your jurisdiction for corporations?
Singapore has enacted a framework for DPAs, which came into force on 31 October 2018. Under this framework, the public prosecutor can agree to dismiss the charges a company faces, provided it agrees to undertake certain obligations. A DPA would be subject to approval by the High Court, which must be satisfied that the agreement is in the interests of justice and that the terms are fair, reasonable and proportionate.
67 Does your jurisdiction provide for reporting restrictions or anonymity for corporates that have entered into non-prosecution agreements or deferred prosecution agreements until the conclusion of criminal proceedings in relation to connected individuals to ensure fairness in those proceedings?
Section 149J of the CPC confers powers on the High Court to order that public notice of a DPA be postponed until the conclusion of criminal proceedings, that any information contained in the court documents be removed or redacted, or that such information shall not be published.
Material obtained by the public prosecutor in the course of negotiations for a DPA may be used against the subject of the DPA or any other person in criminal proceedings.
68 Prior to any settlement with a law enforcement authority in your country, what considerations should companies be aware of?
If the company has a presence overseas, it should consider the implications of the settlement on any ongoing or pending investigation in respect of the same or similar subject matter overseas.
69 To what extent do law enforcement authorities in your country use external corporate compliance monitors as an enforcement tool?
A possible condition under a DPA could be for the appointment of a person to advise and report on the subject’s compliance programmes.
70 Are parallel private actions allowed? May private plaintiffs gain access to the authorities’ files?
Civil proceedings can continue in parallel with criminal investigations or proceedings. However, it is common to put civil proceedings on hold until the conclusion of any criminal investigation.
There is no obligation on the authorities to provide civil litigants with access to their files.
Publicity and reputational issues
71 Outline the law in your country surrounding publicity of criminal cases at the investigatory stage and once a case is before a court.
Anyone who intentionally publishes any matter or carries out any other act that prejudices, interferes with or poses a ‘real risk of prejudice’ to current court proceedings is liable to be found guilty of contempt of court pursuant to the Administration of Justice (Protection) Act 2016.
Further, obstruction of justice is an offence under section 204A of the Penal Code.
The Protection from Online Falsehoods and Manipulation Act (POFMA), which came into effect on 2 October 2019, also prohibits the communication of false statements of fact in Singapore that is likely to result in the diminution of public confidence in the judiciary, among other things. Directions requiring such persons to stop communicating the false statement or to issue a correction statement may be given under the POFMA. Failure to comply with the relevant directions is an offence.
72 What steps do you take to manage corporate communications in your country? Is it common for companies to use a public relations firm to manage a corporate crisis in your country?
Depending on the scale of the matter, a company may choose to engage an external public relations firm if it does not have an in-house public relations or communications team. It is also common for external counsel to assist and advise a company on a holistic crisis management plan.
73 How is publicity managed when there are ongoing related proceedings?
Generally, a company undergoing investigation or legal proceedings tends not to comment on it when asked by the media, save to the extent necessary to meet disclosure obligations or to refute any inaccuracy. It is important that a crisis management plan is created and abided by, particularly if there are various stakeholders in the company.
Duty to the market
74 Is disclosure to the market in circumstances where a settlement has been agreed but not yet made public mandatory?
A settlement may fall within the scope of information that a listed company is required to disclose under Rule 703 of the SGX (Mainboard) Listing Rules, subject to any disclosure obligations imposed by the relevant law enforcement authorities.
In addition, a settlement may result in the company having to make certain provisions in its financial statement to account for the settlement figure it may be required to pay. The company would have to ensure its financial statement is prepared in compliance with the relevant accounting standards.
75 Do you expect to see any key regulatory or legislative changes emerge in the next year or so designed to address corporate misconduct?
On 6 May 2019, the Criminal Law Reform Bill was passed in Parliament, introducing, among other things, a new offence of fraud, adapted from the UK Fraud Act 2006. This offence focuses on the dishonest or fraudulent intent to deceive a victim, rather than the effect of the deception of the victim. With this new fraud offence, sophisticated deceptive schemes in which wrongful gain or loss was intended without an identifiable victim being deceived would now constitute an offence under Singapore law.
The Bill also introduces provisions to tackle crime committed in the virtual arena, such as setting out a comprehensive definition of property to cover virtual currency, as well as clarifying that a company is capable of being deceived or induced to act in a certain manner for the purposes of the offence of cheating, even if none of its individual officers, employees or agents is personally deceived or induced to act in such a manner.
The Criminal Law Reform Bill has come into effect in stages in the course of 2020.
 Danny Ong and Sheila Ng are partners at Rajah & Tann Singapore LLP.