Shanmugam on City Harvest case: Parliament to soon amend law on criminal breach of trust

Nicholas Yong
Assistant News Editor
Law Minister K Shanmugam. (PHOTO: Dhany Osman / Yahoo News Singapore)

The law that holds company directors less culpable when they commit criminal breach of trust will soon be amended, said Home Affairs and Law Minister K Shanmugam in Parliament on Monday (5 February) as he delivered his Ministerial Statement on the City Harvest Church (CHC) court ruling.

“It is now up to Parliament to amend the law, and that we should do soon. We will ensure that legislation provides for higher penalties for directors and other senior officers who commit criminal breach of trust,” said Shanmugam, who acknowledged that “many have expressed their dissatisfaction with the outcome (of the CHC case)”.

Last Thursday, the Court of Appeal rejected the prosecution’s bid to have the six former CHC leaders’ original sentences reinstated.

Consequently, the sentences that were previously passed by the High Court in 2017 for CHC founder Kong Hee, 53, deputy senior pastor Tan Ye Peng, 45, former finance committee member John Lam, 50, former fund manager Chew Eng Han, 57, former finance managers Serina Wee, 41, and Sharon Tan, 42, remain unchanged, with the jail terms ranging from seven months to three years six months. Tan has completed serving her sentence.

The six were previously found guilty of criminal breach of trust as agents and falsifying accounts and given sentences of between 21 months and eight years in November 2015.

The Attorney-General’s Chambers (AGC) said after the appeal court’s ruling, “In coming to this decision, the Court of Appeal overruled a 1976 High Court decision, which had held that company directors could be convicted for criminal breach of trust under section 409 of the Penal Code. That was the position consistently taken by the courts since 1976, until the High Court which heard the Magistrate’s Appeal for the present case departed (by a 2-1 majority) from the position in the 1976 High Court decision.”

‘The sentences are too low’

The minister noted that the 1976 ruling – “the position was clear, settled” – had been consistently applied for four decades, in more than 16 reported decisions.

“The government’s policy is clear: if you are a senior officer, director in the organisation, you are in a position of greater trust. You have considerable authority to make decisions in relation to the organisation’s assets.  If you abuse that trust, you should be more culpable and you should be liable to more severe punishments compared with an ordinary employee,” noted the 58-year-old.

However, with the High Court’s ruling in April 2017 that directors cannot be liable under section 409, there were thus “two conflicting positions”. The AGC therefore advised the government to seek a clarification from the Apex Court, which it has given.

In response to a supplementary question from the House on why the law had not been amended earlier, Shanmugam noted that, “no doubts or uncertainty” were expressed by the courts on the matter, nor was there any no suggestion that the law was in need of any review.

“Parliament does not legislate in vain,” said the Minister.

He concluded, “The government believes the sentences are too low. But the sentences reflect the law as it stands after the High Court’s decision last year confirmed by the Court of Appeal. The courts decide these matters. All of us have to respect the decision regardless of whether we agree or disagree with it.”

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