Kickbacks disguised as dividends on vendor's shares: Appeals court

Kickbacks disguised as dividends on vendor's shares: Appeals court
Henry Teo, 64 yrs-old a Senior Director Logistics in the empoly of Seagate Technology lnternational accept bribes from Koh Han Lee, a Director of Biforst Singapore Pte Ltd.

A former Seagate director thought he had got away with receiving more than $500,000 in kickbacks from a vendor.

But yesterday, 65-year-old Henry Teo Chu Ha had his six-month jail term restored by the Court of Appeal after it ruled that the High Court had erred on a point of law when acquitting him on appeal.

Teo told The Straits Times that he was "very disappointed", adding that his lawyer, Mr Bachoo Mohan Singh, would be writing to the Law Minister.

The senior director of logistics had been "sold" 20,000 shares by trucking firm Biforst in 2004. Between 2006 and 2010, he received "dividend" payouts totalling $576,225 from these shares.

After being convicted of corruption in 2012, he appealed to the High Court last year and won.

High Court judge Choo Han Teck found that the transaction did not amount to corruption as the accused had paid for the shares.

He added that it was up to the prosecution to prove that the deal was a sham.

The prosecution then asked Singapore's highest court to rule whether it had to show that such payments were inadequate or a cover-up before a person could be found guilty of corruption.

No, the apex court answered.

In a written judgment released last week, the court found that the $6,000 payment in Teo's case was a "legal red herring".

It ruled that if a person was given a chance to acquire shares - which unlock kickbacks disguised as dividends - in exchange for showing favour to a third party, it did not matter whether he had paid the full price.

The court said it hopes its decision will serve as a warning to potential offenders that courts here will not hesitate to "look at the substance of an entire scheme and its context rather than only at the actual... transactions" when deciding if it was corrupt.

The question of whether the court should restore Teo's conviction and sentence in the light of its ruling on the legal point was debated yesterday.

Teo's lawyer argued that the court should not overturn the acquittal as the proceedings, known as a criminal reference, are only to determine legal issues.

He asserted that if it did, Singapore would be the first country in the Commonwealth to jail a man who has been acquitted after his final appeal.

But Deputy Public Prosecutor David Chew said that since the point of law has been decided in the prosecution's favour, it follows that Teo should be found guilty. He pointed to a 2010 case in which the apex court restored a conviction and sentence after deciding on a legal question.

This article was first published on September 03, 2014.
Get a copy of The Straits Times or go to for more stories.

More about

Purchase this article for republication.



Your daily good stuff - AsiaOne stories delivered straight to your inbox
By signing up, you agree to our Privacy policy and Terms and Conditions.