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JLC lawyer told repeatedly to return S$33m before going incommunicado
FOR two months before going incommunicado, Jeffrey Ong Su Aun - the senior lawyer in the middle of the case of S$33 million of missing funds - fended off requests from his client Allied Technologies to return the money.
Mr Ong is the managing partner of JLC Advisors, the law firm managing the escrow account which held the funds.
In an SGX statement on Thursday, Allied Tech cited a letter purportedly from JLC to the listed precision engineering company that placed the 42-year-old Mr Ong at the centre of questions surrounding the missing cash. It confirmed a report by The Business Times on Thursday that S$33 million of clients' money had gone missing at JLC, with the funds belonging to Allied Tech.
BT has not been successful in reaching Mr Ong since Wednesday via his mobile number and email address.
Allied Tech said in the SGX announcement that it had sought repayment of the money from JLC at various times since March 23, 2019, including a May 17 letter of demand from Allied Tech's counsel, Rajah & Tann (R&T) Singapore.
Mr Ong had repeatedly represented to the company that the release of the escrow funds would be forthcoming, and had never once stated that the funds were missing, that it had already been paid out or that JLC would not comply with the company's request to release the escrow funds in accordance with the escrow agreement, Allied Tech said.
Jonathan Yuen, partner of R&T Singapore, told BT: "Last email sent by Jeffrey Ong was on May 13, telling my client that he would be able to repay the money by Friday, May 17."
When the payment was not forthcoming on May 17, Mr Yuen, at Allied Tech's instructions, issued a letter of demand the very same day, giving JLC the ultimatum to release the funds by 4 pm on May 22.
However, just hours before the deadline, the letter purportedly from JLC was hand delivered by a courier to Allied Tech. And it did not have the customary markings such as reference number of an official letter from a law firm, noted Mr Yuen.
Though the letter was signed, the author was not named.
The letter on JLC's letterhead stating that the funds of S$33.4 million deposited by the company with JLC have been purportedly paid out from the escrow account, and that JLC is still investigating, but has reasons to believe the said funds were paid out on the instructions of its partner Mr Ong and "might have been unauthorised". The letter also stated that JLC has lodged reports with the relevant authorities.
Allied Tech said in the SGX announcement that the amount of S$33.4 million stated in the JLC letter as held by the law firm on escrow is incorrect. It should be about S$33.15 million instead.
The company also fired a letter by Mr Yuen on Thursday, to question JLC about the latter's letter, the details and circumstances of how its funds have gone missing, and the basis for believing that the funds have been paid out.
Also, it demanded to know the whereabouts of Mr Ong and how JLC conducted investigations into this matter as well as seeking documentary evidence and statement of accounts of the escrow funds.
Allied Tech will lodge a report with the police and the Law Society, and commence legal proceedings as appropriate.
Mr Yuen told BT that the escrow funds were raised by Allied Tech from a placement exercise in late 2017. An SGX filing then showed that the funds were to be used for business expansion through acquisitions, joint ventures and collaborations.
Earlier in the day on Thursday, Allied Tech announced that it will not be buying construction, development and dormitory operator Aik Chuan Construction (ACC) and its subsidiaries.
The proposed acquisition of ACC was supposed to be satisfied by cash of between S$30 million and S$50 million with the balance through the issue of new Allied Tech shares.
The company had on May 8 entered into a memorandum of understanding for the proposed acquisition but the deal was called off on Wednesday - the day that news of its funds went missing broke.
Separately, Annica Holdings said on Wednesday that Mr Ong had on May 20 tendered his resignation - via e-mail - as acting non-executive chairman and independent director from the company with immediate effect. Mr Ong cited "personal reasons" for his sudden departure.
Singapore Exchange Regulation (SGX RegCo), which noted these developments at Allied Tech and Annica, announced on Thursday night that it will object to any future appointments of Mr Ong as a director or executive officer of any Singapore listed company.
Also, it directed Allied Tech to finalise by June 14 the appointment of the special auditor, who is to report solely to the regulator on the scope and all findings of the special audit.
JLC senior partner Vincent Lim told BT on Thursday: "The firm has been informed of certain matters pertaining to one of our client's accounts which we were not previously aware of. This has caused us great concern. We have reported this matter to the police and the Law Society and are cooperating fully with these authorities to resolve the matter.
"We would like to assure all our many stakeholders, especially our clients, that we place their interests as our highest priority during this difficult time. We will continue to serve all their legal needs or assist to make alternative arrangements when necessary."
The Law Society on Wednesday took steps to intervene and take over the running of the client account from JLC, citing suspicions of dishonesty.
Mr Ong took over the helm at JLC last year when it turned 10 years old.
According to the firm's website, he started his legal career in the area of commercial litigation and dispute resolution before expanding his practice to cover contentious restructuring and corporate advisory work. He also advised the boards of several public companies listed on the Singapore and Hong Kong stock exchanges.
Allied Tech had in early April warned that it is expected to report a net loss in 2018, attributing it mainly to impairment losses on certain assets which are expected to be greater than the profits generated from operations.
The company's shares last traded at 1.1 Singapore cents on May 2, before it requested for a trading halt on May 3 and recommended on May 8 that the trading halt be converted to a voluntary trading suspension with immediate effect.