Widow who squandered $1m: Lawyer says donors have little control

SINGAPORE - When Malaysian cleaner Chandra Mogan Panjanathan, 34, was killed in a freak accident at Changi Airport two years ago, Singaporeans dug into their pockets to help his widow and children.

Madam Pusparani Mohan and her four children received close to $1 million in donations and insurance payouts. But the 34-year-old Malaysian quit her job as a cleaner, returned to Malaysia and lost all that money in just one year.

Madam Pusparani's story, reported in The Sunday Times last week, left many readers angry. But a lawyer told The Sunday Times that in her case, it was hard for donors to control how she spent the money.

If the donations were channelled to her without any written agreement to set out her boundaries and obligations, then donors had no say over how she spent the money, said lawyer Chia Boon Teck of Chia Wong LLP.

"Because the donations came from many sources, no one donor can take charge of the total donations," he said. If there had been just one donor, the person could have set up a trust fund to spell out how the beneficiary should spend the money, he added.

With many donors involved and no one party able to dictate terms, the donations were made on the assumption that the beneficiary would spend the sum responsibly, he said. Few would check how the money given was used.

"The feel-good factor about giving a donation lasts for a few minutes. Nobody wants to be saddled with the responsibility of having to monitor the usage of donations after that," he added.

Such a scenario was one of the factors that led to the setting up of the Ray of Hope Initiative in November 2012, one of its founders told The Sunday Times.

The non-profit organisation wants to be the middleman connecting those who are featured in the media after suffering a sudden crisis, with donors who want to help but do not know how to get the money to them.

Its manager Sharmin Foo, 34, who declined to comment on Madam Pusparani's case, said the organisation takes a structured approach.

She said it "works with the beneficiaries to estimate income and living expenses, how much their children's school fees are, debt and medical bills" before funds are raised.

Disbursements are then made in instalments, sometimes in the form of vouchers to ensure that the money is used appropriately. The group also keeps in touch with both donors and recipients.

But Mr Chia said it would still be a challenge for a group based here to make monthly disbursements to Madam Pusparani or monitor her expenditure, as she and her children live in Malaysia.

Separately, "another fairly common scenario" is when one parent dies, leaving the surviving spouse to administer the estate, he said.

Often the spouse uses the money as he or she wishes without regard for the children's entitlements and the children dare not question the parent. "Many of these cases do not see the light of day as most people do not wish to cause a family fallout over money," said Mr Chia.

In Madam Pusparani's case, unless there had been a proper trust deed, it would also be hard for her children to prove that their mother had not met her obligations to them when it came to the donations, he added.

Meanwhile, Mr Gregory Choy, head of wealth advisory at OCBC Bank, said Madam Pusparani's $1 million could have been invested in instruments such as equities, bonds, foreign currencies or endowment plans.

Even if one comes into a windfall, one "should continue to work and spend less than you earn, then save and invest the rest", he said.

"Thereafter, use the million dollars as an opportunity to grow your wealth and not blow it on luxury items and drastically change your lifestyle," he added.

Trust fund helps her manage money

WORKSITE ACCIDENT: More than $700,000

On April 20, 2004, Singaporean Heng Yeow Pheow was killed in a construction site accident on Nicoll Highway.

The construction supervisor, 40, had gone into a tunnel to help evacuate his workers, after the collapse of a supporting scaffolding and structure around the Circle Line excavation site.

His family was awarded $410,000 in compensation in a civil suit involving three construction firms.

More than $300,000 was also collected for a trust fund to help his wife Poa Beng Hong and their two children Daniel and Joann, who were then aged 10 and eight respectively.

Mr Heng's employer Kori Construction also took out two Edusaver insurance policies for his children, which will continue until one turns 18 and the other, 21.

Madam Poa, 45, told The Sunday Times she had initially received $2,000 monthly from the trust fund after her husband died. This was equivalent to his monthly salary with overtime.

The monthly payout was later increased to $2,500 as her children grew older.

"We have to be thrifty and I have to work to supplement the household income," said Madam Poa, who works as a helper in a school canteen.

She was given half of the settlement sum from the civil suit, as the Assistant Registrar had ruled that the other half should be divided between the couple's two children when they reach 21. Before then, their half is managed by the Public Trustee, who can give Madam Poa $500 a month for each child for their expenses.

Madam Poa said: "I am thankful for the trust fund set up and the monthly payout. I would not know how to manage such a huge sum of money."

'Fully dependent' on payout to get by

FOOTBALL ACCIDENT: More than $380,000

On Sept 3, 1996, Mr S. Anthonysamy fell and broke two vertebrae while playing in a friendly match for Woodlands Wellington Football Club (WWFC).

He was paralysed from the waist down.

The S. Anthonysamy Trust Fund was set up, with the first $20,000 given by the S-League club.

Singapore Pools gave $80,000 to the trust fund, which aims to provide for the medical and daily needs of the former football player in his lifetime.

Mr Anthonysamy, who was insured by the club, received about $200,000 in insurance payout. The club and other organisations also raised funds for him.

By 2012, the trust fund had less than $35,000, which prompted the club to hold a fund-raising dinner for its former player. It raised about $70,000, the club's marketing executive Grace Wu told The Sunday Times.

WWFC's management decided to donate $500 monthly to the trust. "This donation started in 2012 and ends in December 2014," she said.

When contacted last week, Mr Anthonysamy, who is married with no children, said he has not been able to work due to his condition.

He has been "fully dependent on the monthly payout from the trust fund to get by" and to pay for "basic necessities like utilities, food and medical (bills)", said Mr Anthonysamy, who declined to reveal the monthly amount he gets from the trust fund.

He is grateful for the trust fund and said he "definitely would not be able to manage" on his own had he been given a lump sum in donations back then.

This article was first published on June 15, 2014.
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