His breaches of Companies Act include failure to hold AGMs and not filing annual returns for nine firms
A company director has been given a record fine for multiple breaches of the Companies Act, including failing to hold annual general meetings (AGMs) and not filing annual returns for nine companies. Tan Hang Song was fined $113,400, the Accounting and Corporate Regulatory Authority (Acra) said in a statement yesterday. His punishment was nearly double the previous record of $57,000 meted out by the courts last July. The 49-year-old, who faced 54 charges, was also disqualified in November last year from acting as a director of companies for five years.
Holding AGMs and filing annual returns are important statutory requirements, Acra said. It added that an annual general meeting provides a forum for shareholders to be informed of the company’s financial position and to engage the company directors.
54 Number of charges he faced
Filing a company’s annual returns allows timely public disclosure of key information such as its financial health and status, the authority added. Last year, Acra prosecuted a total of 12 company directors for similar breaches of the law. Directors who have been convicted of three or more filing-related offences under the Companies Act in a period of five years are automatically disqualified.
Similarly, directors who have three or more companies struck off the register by Acra within a period of five years will also be disqualified. Disqualified directors will not be allowed to act as company directors or take part in the management of any local or foreign company for five years. This ban comes into effect from the day after the date of the third conviction or the date when the third company is struck off. Acra said that while disqualified directors can apply to the High Court for permission to resume their duties, their applications can be dismissed.
This was the case for five directors, who were disqualified due to having three or more of their companies struck off by Acra. Their applications were dismissed by the High Court between last year and this year. They were also ordered to pay costs ranging from between $6,000 and $12,000 to the Government. Four other disqualified directors withdrew their applications, Acra added.
Acra’s assistant chief executive of legal services and compliance Andy Sim said directors must take their statutory duties seriously. He added that Acra will continue to seek high compliance and press for deterrent sentences in more serious cases. Disqualified directors will have their status published on Acra’s public register, under the company’s business profile and directors’ profile reports.
Acra said it does this to protect public interest and enable investors and interested stakeholders to conduct due diligence on a company. The public can get the profile and reports from Acra’s online business registration and filing portal for a small fee.
Correction note: An earlier version of the ST article said that Tan was disqualified on Thursday from acting as a director of companies. He had been disqualified in November last year. The article also said that the filing of tax returns are important statutory requirements. It should be annual returns. We are sorry for the errors.
A version of this article appeared in the print edition of The Straits Times on February 23, 2019, with the headline ‘Company director hit with record $113,400 fine’.