A CHINESE national who absconded after he was charged with authorising Singaporeans to front his purchase of landed properties worth millions of dollars has been fined S$45,000.

On Thursday (Apr 18), District Judge Kok Shu-En imposed this sentence on Zhan Guotuan, who has paid the fine. 

The S$45,000 will go towards the Consolidated Fund, which is analogous to a bank account held by the government. The revenues of Singapore are paid into this fund, out of which government expenditures are made. 

On Tuesday, Zhan pleaded guilty to authorising Hwampoa, a Singapore-incorporated company, to purchase an East Coast Road property with the intention that the company hold it in trust for him. Three other charges were taken into consideration. 

Under the Residential Property Act, foreigners are required to apply to the Singapore Land Authority for approval to buy any landed residential property. Residential property should not be purchased by a citizen or an approved purchaser as a nominee of a foreign person.

The court heard that Zhan was a shareholder in two companies, Alphaland International and Xin An Technology Group, which were in the business of property development.

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The prosecution said: “The business plan was to buy landed properties in Singapore, demolish those houses, develop condominiums on (that) land, and sell the condominium units for profit. Under this plan, Alphaland was the property developer, while Xin An was the main contractor for the development.”

Zhan, who was a Singapore permanent resident at the time of the offences around 2007, gave his employee Tan Hui Meng general authorisation to manage the affairs of Alphaland and Xin An in Singapore on his behalf, as he was based mainly overseas and returned to Singapore only periodically.

Tan proceeded to incorporate Hwampoa in July 2007 for the purpose of holding the East Coast properties in trust for Zhan.

Deputy Public Prosecutor (DPP) Foo Shi Hao said: “Investigations revealed that Hwampoa had no employees and no business operations.” 

In or around August 2007, Tan informed Zhan about the “East Coast plan” and the plan to purchase the property under Hwampoa’s name. Zhan then authorised Hwampoa to acquire the property with the intention that it holds the property in trust for him.

Hwampoa exercised the option to purchase on Aug 8, 2007, at a price of S$2.4 million, which was largely paid from bank loans – all of which were later redeemed using Alphaland’s monies.  

At a meeting in or around August 2007, Tan also informed Zhan that he purchased two other landed properties under Guan Aimei – the wife of one of Zhan’s employees – and Tan, in trust for Zhan. In total, the three properties were purchased for more than S$6 million.

Zhan was unhappy that the two other properties had not been bought under the name of his companies, but proceeded to authorise Tan’s acquisitions of these properties with the intention that they are held in trust for him.

Hwampoa has since sold the property and made restitution of S$2.1 million to the state in September 2019.

For Zhan, the prosecution had sought the maximum fine of S$50,000 under Section 23 of the Residential Property Act. 

DPPs Foo and Louis Ngia said in written submissions: “If not for Zhan Guotuan’s voluntary disgorgement of his financial benefit, his plea of guilt, and the fact that his role was far smaller than Tan Hui Meng’s, we would have sought a custodial sentence against him. But in the light of all these facts, we submit S$50,000 fine is fair.”

Zhan’s defence lawyer, Poon Pui Yee from Harry Elias Partnership, had argued that Zhan’s intention was always to acquire the properties for his property development business. Poon had sought a fine lower than the S$50,000 proposed by the prosecution.