Ng Yu Zhi’s billion-dollar nickel trading was ‘pure fiction’, prosecution alleges
He is said to have forged several key documents so as to spin a convincing tale that the investment scheme was supported by physical nickel trading
THE nickel investment scheme of businessman Ng Yu Zhi that promised highly attractive profits from trading in the metal was “pure fiction” that swindled 947 investors of almost S$1.5 billion, alleged the prosecution on day two of the trial in the High Court on Wednesday (Nov 27).
The 37-year-old is contesting 42 charges of fraudulent trading, cheating, forgery, criminal breach of trust and money laundering, with another 63 in connection with the alleged investment fraud being stood down in this proceeding.
Calling Ng the mastermind of the elaborate investment scheme that took place between February 2016 and March 2021, touting buying physical nickel at a significant discount and selling at market price for a profit, Deputy Public Prosecutor (DPP) Gordon Oh alleged that his companies Envy Asset Management and Envy Global Trading had never bought nor sold the metal.
The companies had never even negotiated any agreement with the Australian mine Poseidon Nickel which they supposedly purchased from, charged DPP Oh as he delivered the prosecution’s opening statement on Wednesday.
Envy Asset Management and Envy Global Trading instead paid earlier investors with the funds invested by subsequent investors, resulting in substantial financial losses for the investors when the fraud came to light, Judicial Commissioner Christopher Tan heard.
Ng is said to have forged several key documents so as to spin a convincing tale that the nickel investment scheme was supported by physical nickel trading.
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He derived tremendous personal benefit from the scheme, siphoning off S$481.7 million that went to his accounts, and funded his lavish lifestyle and purchases that included expensive works of art, jewellery, real estate and luxury cars, the court heard.
Witness testimony
One of the investors, Shim Wai Han, testified on Wednesday as first prosecution witness that she learnt about Envy’s investment scheme through a friend and met Ng at Oxley Towers in 2018. Ng introduced himself as the managing director and owner of Envy Asset Management.
Shim, who turns 51 soon, had allegedly parted with S$955,000 between November 2020 and January 2021 for the investment scheme. The wealth management company Envysion Wealth Management, of which she was the ultimate owner and former chief executive, was cheated of about S$47.4 million.
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Shim told the court that she heard from Ng that he came across the nickel trading opportunity in 2016 when he was working as an auditor at KPMG. BHP Billiton, one of the professional services firm’s clients, aborted an agreement with Poseidon Nickel after nickel prices plunged, the court heard.
Poseidon fell into distress, Ng allegedly told her, and he was thus able to purchase nickel on the cheap. He was purported to have been asked by the miner to commit to regular monthly purchases. As delivery was not instant, he needed better cash flow for the trade and thus opened up the opportunity to external investors.
Shim learnt that Envy Asset Management had been put on the Investor Alert List by the Monetary Authority of Singapore (MAS) in March 2020. She told the court that she was initially very concerned because an in-house sub-fund of Envysion was supposed to invest in Envy. Envysion’s chief compliance officer told her that companies are put on the alert list if they do not have a licence yet, but are perceived as having one. But her concerns were allayed after Ng showed her a legal opinion that said no licence is needed for dealing with accredited investors.
Shim also described what she and her team had done to exercise due diligence over Envy companies’ purported nickel trading, such as talking to commodities experts, and being in close communication with Ng and his team.
“(It was) not something that (was) too good to be true,” said the witness, a former private banker with almost 20 years of industry experience and stints at institutions including UBS and Julius Baer.
The due diligence that she and her team had performed convinced her that the nickel trades were “genuine”, and she had invested her “life savings” as well.
Shim herself is facing five charges, including making false statements in connection with the provision of a financial advisory service, and forwarding e-mail correspondence between MAS and Envysion to Ng.
The trial continues.
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