HENN Tan, who founded the company that invented the ubiquitous thumb drive, pleaded guilty on Monday (Aug 15) to 5 charges of engaging in conspiracies to falsify accounts, forge documents to cover his tracks as well as cheat the external auditors.

Represented by Daniel Cai and Wesley Chan of Drew & Napier, the 66-year-old former chief executive of mainboard-listed Trek 2000 International : 5AB 0% will be sentenced on Sep 22, when the judge will also consider Tan’s 4 other similar charges.

Meanwhile, Tan has been in remand for 1.5 months now, although he has been offered bail at S$400,000, according to the court system.

The court heard that the accused, who shot to prominence as inventor of the revolutionary thumb drive, had from as far back as 2006 through 2011 conspired with then chief financial officer Gurcharan Singh to make false entries in Trek 2000’s financial statements pertaining to some licensing income.

Their crimes had been well under wraps for years until Trek’s auditors Ernst & Young (EY) discovered Tan and his co-accused had cooked the books for FY2015 that their offences began to unravel.

Then, Tan realised that the company’s financial performance for FY2015 would be dismal and conspired with a few senior officers to inflate revenue and pre-tax operating profit by plucking a US$3.2 million sale from thin air - accompanied with false supporting documents.

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When confronted about the transaction, Tan and his co-accused tried to deceive EY that the sale was genuine and the financial statements had been drawn up properly, the prosecution said.

EY, however, believed that the accused and some co-accused had forged the bank documents and began to conduct further audit procedures, including forensic imaging of laptops and computers of Singh, then-president of regional sales Foo Kok Wah and former executive director Poo Teng Pin.

Also, it looked into some past transactions and uncovered other fictitious deals in 2013.

Unconvinced by the explanations the accused gave, EY reported the matter to the Accounting and Corporate Regulatory Authority, stating that it believed Trek’s management had made false and misleading statements regarding the US$3.2 million sale. EY later issued a disclaimer of opinion for Trek’s FY2015 financial statements.

The cases of Foo and Singh are pending, while Poo had been sentenced to 9 months’ imprisonment.

Earlier, Tan was fined S$80,000 after he negligently did not get the firm to disclose interested person transactions.

He quit the helmsman role after the Singapore Exchange in 2018 objected to him continuing as the CEO but he remained as chairman emeritus until 2020. Presently, his son Wayne is deputy chairman of Trek.

The counter was trading 0.1 cent lower at S$0.093 on Monday at 1.10pm.