Director of CSP Firm Fined for Misuse of Identity in the Appointment of Company Director

Singapore, 5 April 2024 – The State Court has fined Li Baozhu, the sole director of Corp Nergy Pte Ltd, a total sum of $6,500 for failing to exercise reasonable diligence in the discharge of her duties under the Companies Act on 1 April 2024. Earlier on 11 October 2023, ACRA had cancelled Li’s registration as a Registered Qualified Individual (RQI) and Corp Nergy’s registration as a Registered Filing Agent (RFA) on the same grounds.

2          RQIs and RFAs provide corporate secretariat services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing obligations under the Companies Act. With the registrations as RQI and RFA cancelled, Li would not be able to operate as a corporate service provider (CSP).

3        Li had incorporated three local companies by wrongly declaring to ACRA that a certain local resident individual had consented to be a director of these three companies. Under the Companies Act, all Singapore-registered companies must have at least one local resident director.  

4        Investigations revealed that Li had relied on a third party to obtain the consent of the individual, but the said individual concerned had not consented to the appointments as director. Li did not sight the prescribed consent form from the individual concerned and she also did not take any steps to ascertain if the individual had indeed consented to be a director of the three companies prior to the incorporations.  

5        ACRA takes a serious view on the misuse of identities for the appointment of directors. Corporate service providers who breach their obligations, whether negligently or otherwise, may face regulatory sanctions which include having their registrations cancelled. Directors of corporate service providers may also be prosecuted for failing to exercise reasonable diligence. The prescribed maximum sentence for committing such an offence is a fine not exceeding $5,000 or imprisonment for a term of not exceeding 12 months.