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Tuesday, February 27, 2024
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DIRECTOR JAILED FOR FAILING TO USE REASONABLE DILIGENCE WHEN SIGNING LETTERS TO WIRECARD AG, COMPANY ACCOUNT RECEIVED 54M EUROS

Thilagaratnam S/O Rajaratnam (“Thilagaratnam”), a 60-year-old Singapore citizen who is the sole director of Strategic Corporate Investments Pte Ltd (“Strategic”), pleaded guilty and was convicted on 11 January 2024 for failing to use reasonable diligence in the discharge of the duties of his office. On 7 February 2024, he was sentenced to four weeks imprisonment, and disqualified from acting as a director for five years. 

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Thilagaratnam’s brother is R Shanmugaratnam, a director of Citadelle Corporate Services Pte Ltd (“Citadelle”). Citadelle provided corporate secretarial services, and its clients included companies owned by one James Henry O’Sullivan (“O’Sullivan”). O’Sullivan is the beneficial owner of Strategic. 

Sometime in 2014, Thilagaratnam agreed with R Shanmugaratnam to be the sole director and shareholder of Strategic for $500 a month, but not participate in the management or operations of the company. He also was the sole signatory to Strategic’s bank account as of August 2015.

Aside from signing company documents, Thilagaratnam was not involved in, and did not take any steps to find out about Strategic’s business and affairs. In particular, Thilagaratnam did not know that between December 2014 and September 2015, Strategic’s bank account received a total of EUR 54,718,880.76 from Wirecard AG, an international payment and financial services provider incorporated in Germany. These funds were subsequently transferred to various parties.  

Between 29 March 2016 and 7 April 2018, following requests by Wirecard AG’s auditors for confirmation as to the amounts that Strategic held in its bank accounts on Wirecard AG’s behalf, R Shanmugaratnam prepared seven letters from Strategic addressed to Wirecard AG. These letters stated that Strategic held amounts ranging from EUR 29,940,119.76 to EUR 54,718,880.76 at the end of various financial years. In fact, Strategic did not hold such amounts at those points in time. 

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Thilagaratnam admitted that he signed the seven letters at the request of R Shanmugaratnam without making any effort to verify the balances in Strategic’s bank account. Despite being unaware of the purpose of the letters or the matters mentioned therein, he did not ask R Shanmugaratnam, O’Sullivan or O’Sullivan’s employees about them. 

O’Sullivan has been charged in court with related offences for his role in Strategic’s issuance of such letters addressed to Wirecard AG. O’Sullivan and R Shanmugaratnam have also been charged for offences relating to similar letters issued by Citadelle to Wirecard entities, and court proceedings are ongoing.  

Further investigations relating to Wirecard are ongoing, and the Singapore Police Force will continue working with the authorities in Germany on the investigations.

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