A Clarification on the Judgment in Tan Koon Swan

By Louis Lim

Tan Koon Swan v Public Prosecutor (“Tan”)was the first case of stock manipulation in Singapore that took place nearly three decades ago. It was one of the largest corporate scandals that signalled the trend of white-collar crimes becoming increasingly sophisticated.

Tan involved a Singapore-based company named Pan-Electric Industries, that joined the business empire of Mr Tan Koon Swan. Mr Tan was the then-President of the Malaysian Chinese Association, a Chinese-based political party under the ruling government Barisan-National. Pan-Electric’s huge debts and inability to make good on forward contracts led to its collapse, which temporarily threatened the stockbroking industries of Singapore and Malaysia. More importantly, Mr Tan’s political involvement in Malaysia brought about significant cross-border tension when he was convicted for fraudulent dealings involving Pan-Electric.

Tan admitted to abetting a director, Tan Kok Liang, of Pan-Electric to commit criminal breach of trust by engaging in a conspiracy with that director to dishonestly dispose of property belonging to the company, in violation of section 157(1) of the Companies Act. Tan was sentenced in the High Court by Justice Lai Kew Chai to two years’ imprisonment and $500,000 fine. Justice Lai in his judgment held that Tan’s offence should not be viewed in isolation, but was to be considered in the wider context of stock market manipulation. Such market manipulation ‘struck at the very heart of integrity, reputation and confidence of Singapore as a commercial city and financial centre’, and hence justified the custodial term.

An Apology from the Public Prosecutor

The controversy therein arises from former deputy public prosecutor Glenn Knight’s apology to Tan for a wrongful prosecution, which Knight wrote in his book, Glenn Knight: The Prosecutor. In the book, Knight stated that Tan was ‘technically an innocent man’.

Knight made reference to the 1996 High Court case of Cheam Tat Pang v Public Prosecutor2 (‘Cheam’), in which former Chief Justice Yong Pung How disagreed with the interpretation of law in Tan’s case. He concluded that a violation of section 157(1) of the Companies Act could not be the basis of dishonest disposal of property in a charge of criminal breach of trust under s405 of the Penal Code. CJ Yong had ruled that the Companies Act provision was meant for civil, not criminal, cases. Knight thus noted that if CJ Yong’s views were applied to Mr Tan’s case, the outcome might have been different.

Knight made factual errors: AGC

The Attorney-General’s Chambers disputed Knight’s claims, citing several factual errors that he made.

First, Yong merely sat in the capacity of a High Court judge in Cheam. Thus, the pronouncement did not and could not overrule the decision in Tan’s case, since both decisions were made by the Singapore High Court. Although Knight mentioned that the laws in United Kingdom would have allowed Koon Swan’s conviction to be set aside, he did not proffer an explanation of how this was possible.

‘Achieving this balance would uphold the integrity and dignity of Singapore’s judicial process’

Second, Mr Tan was convicted based on his admission of guilt. His subsequent appeal to the Court of Appeal was not against his conviction, but the sentence, which was dismissed. Furthermore, Mr Tan had legal advice throughout the entire process, and he did not dispute the correctness of the charge, which had been accepted by his own counsel.

Third, AGC clarified that CJ Yong did not go into any detailed discussion of Mr Tan’s case, or Knight’s conduct of the case. Specifically, CJ Yong did not express any opinion that Mr Tan was wrongly charged. The only statement he made was to note the similarity of the charge in Tan to the case of Cheam, though in the former, the accused pleaded guilty, and there were no arguments as to the propriety of the charge.

While the motivations behind Knight’s claim of a possible wrongful conviction remain uncertain, it should be clarified that Knight did not set out to vindicate Koon Swan, but rather he intended to point out that Tan had been prosecuted under a wrong charge.

A Conclusion

Although Mr Tan has mentioned that he would not take legal action against his prosecutors despite suggestions that he may have been wrongly convicted, Datuk Seri Dr Chua Soi Lek, the current president of MCA, said that the Singapore government and judiciary have a responsibility to redeem the reputation of the ex-MCA president.

Indeed, the healthy bilateral ties shared between both Singapore and Malaysia should be maintained. This has to strike a balance with the need for the treatment of other countries’ political figures in legal proceedings to remain impartial, such that any likelihood of a conviction being wrongful should be addressed by the courts expeditiously. Achieving this balance would uphold the integrity and dignity of Singapore’s judicial process, and avoid jeopardizing the diplomatic relations we have with our neighbouring countries.

Louis Lim, 22, is a first-year student at National University of Singapore (Law) and Secretary of the NUS Criminal Justice Club, which manages the Innocence Project.

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1 [1986] SLR 126

[1996] 1 SLR(R) 161

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