Two former directors of a Singapore-registered gold investment company The Gold Label Pte Ltd, Iseli Rudolf James Maitland and How Soo Feng , were sentenced to three years and 10 months imprisonment on 12 September 2022, the Singapore Police Force said in a statement.
A third former director, Wong Kwan Sing, had earlier pleaded guilty to a Section 340(1) CA read with Section 340(5) CA offence and was sentenced to an imprisonment term of two years and 10 months on 14 January 2022.
The Gold Label ran a gold buyback business between 2009 and 2011. The company sold gold bars to its customers at a premium of more than 20% above prevailing gold market prices in contracts lasting three or six months.
In exchange, the customers were promised guaranteed returns as high as 24% per annum. At the end of their contract period, customers had the option to sell the gold bars back to The Gold Label at the same price that they had bought the gold bars.
This effectively allowed the customers to recoup their initial investment amount in full, while still making guaranteed returns, creating a semblance of a risk-free investment with attractive returns.
During its operations, The Gold Label attracted more than 2,000 customers and accumulated sales of about S$150m.
However, The Gold Label had neither any profit-generating business nor any sustainable means to honour the payment and buyback obligations owed to its customers.
Instead, the company had relied entirely on new sales proceeds from subsequent customers to pay the obligations owed to the earlier customers. In October 2010, The Gold Label filed for a winding up application. By then, The Gold Label's payout and buyback obligations to its customers had amounted to more than S$85m.
James and How were the managing director and chief executive officer of The Gold Label respectively. At trial, the duo's main defence was that The Gold Label had a "formula" which could generate sufficient profits for the company to honour its obligations. The court however found that no such "formula" existed, and that the duo knew this to be the case from the start.
For knowingly being parties to the carrying on of The Gold Label's business for a fraudulent purpose, James and How were sentenced to three years and 10 months imprisonment respectively.
As for Wong, he was earlier sentenced to an imprisonment term of two years and 10 months after pleading guilty to one count of an offence Section 340(1) read with Section 340(5) of the CA.
A separate charge under Section 103(5)(c) of the Criminal Procedure Code was taken into consideration for sentencing, as Wong had absconded to Malaysia whilst on court bail and amid court proceedings against him.
He was arrested in Malaysia with the assistance of the Royal Malaysia Police and handed over to the Singapore Police Force on 20 October 2021.
