SINGAPORE’S State Court has fined the director of a corporate service provider (CSP) S$6,500 for misuse of identity in the appointment of a director for three companies.
Li Baozhu, Corp Nergy’s sole director, failed to exercise reasonable diligence in the discharge of her duties under the Companies Act, said the Accounting and Corporate Regulatory Authority (Acra) on Friday (Apr 5).
She had relied on a third party to obtain consent from a certain local resident individual to become the director of three companies.
CSPs are able to form corporations on behalf of other persons and act or arrange for persons to act as directors. Under the Companies Act, all Singapore-registered companies must have at least one local resident director.
She failed to sight the prescribed consent form and did not take any steps to confirm whether consent was sought prior to the incorporation of the three companies, which resulted in a wrong declaration to Acra.
The fine comes half a year after Acra cancelled Li’s registration as a registered qualified individual, and Corp Nergy’s registration as a registered fling agent on Oct 11, 2023. This means she can no longer operate as a CSP.
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“Acra takes a serious view on the misuse of identities for the appointment of directors. CSPs who breach their obligations, whether negligently or otherwise, may face regulatory sanctions, which include having their registrations cancelled,” said the regulator.
It added that directors of CSPs may also face prosecution for not exercising reasonable diligence. Committing such an offence could result in a maximum fine of S$5,000, or a prison term of up to 12 months.
