IPP VS GOH JIN HIAN - EVERYONE KNOWS THERE WAS FRAUD OF >US100M BUT NO ONE'S REPORT THE CRIME

Case background:
Dr Goh Jin Hian is the son of Singapore's ex-premier Goh Chok Tong. GJH was director of Inter-Pacific Petroleum (IPP) from 2011 to 2019. Between 21 Jun and 2 Aug 2019, IPP utilised their trade financing facilities for US$146m for cargo-trades and US$10.5m bunkering transactions. It turned out the cargo trades where sham transactions. IPP had utilised L/C their facilities, the funds have flowed out, there were no real buyers. So IPP is left owing the banks which forced the company into liquidation.  IPP sued Goh, a director of IPP, for negligence and compensation in 2020. High Court Judge Aedit Abdullah presided. On 11 Jul 2024 he awarded judgement in favour of IPP. He found Goh, as director, liable for breach of Care Duty and Creditor Duty in respect of the cargo trades and awarded US$146m plus interest to IPP. Goh appealed immediately. The Appellate Court (Justices Tay Yong Kwang, Woo Bih Li, Kannan Ramesh) final judgement 5 Jun 2025 set aside the damages stating IPP failed to prove causation between Goh's breach and the loss.

That sets the background for the case. And a caveat that the background for my legal knowledge comes from heavy doses of legal dramas such as Perry Mason, Suits and Boston Legal TV series. Harvey Specter in Suits (played by Gabriel Macht) and Alan Shore in Boston Legal (played by James Spader) were the badass alpha-lawyers of my youth. The Suits series was where I first saw the beautiful Meghan Markle aka now Duchess of Sussex. Thus my comment on the law is drama, not admissible. Nevertheless, food for thought.

There are several issues I like to touch on in this most interesting case. In this post I will cover only the fraud aspects.

Goh's ignorance of cargo trades:
The courts refer on numerous instances to Goh's "ignorance on the cargo drawdowns" which is also a main defence argument. At times it is not clear what is the specific meaning attributed. Were they referring to Goh's lack of knowledge of the business of cargo trading, or Goh being in the dark that his company IPP was doing trading? At times it specifically refers to Goh being unaware of cargo-trade transactions. There did not seem to be an effort at a proper discovery into the matter. The Appellate Court drew the conclusion that Goh is unaware of cargo-trades being transacted on the basis of :
* email sent by Dr Goh to the Police on 22 August 2019.
* the transcript of Dr Goh’s interview with the Judicial Managers on 27 February2020.
* a conversation over WhatsApp between Dr Goh and Wallace on 13 November 2018.
* various communications from Dr Goh following the Suspension of the bunkering licence.

These are 'admissions' and were post-fact, so could they be crafted to distance himself from culpability, or were they really actions of an unwary innocent man? Under the Evidence Act, admissions are admissible as evidence if it is against Goh's own interest. That is, Goh cannot use these as his evidence to prove he was unaware of the cargo trades because these admissions are in his favour. But the judge can at their discretion and under certain conditions, admit these as evidence and deduce their conclusions. Which they did and arrived with the view Goh was unaware of the cargo trades, by extension, not involved in the fraud.

Perry Mason would have asked for :
* Documentation relating to the opening of bank facilities for cargo-trading. Who signed the bank's offer letter? Was there directors' resolution authorising the opening of the bank facilities? 
* Who were the authorrised signatories for the bank accounts? 
* The documentations relating to the cargo trade transactions to see who sign what.
* Call for testimony from some of the employees such as the accountant, the accounts clerk, heck even the office boy. The point is to deduce the role of Goh. Was he 'sleepwalking' in the office as plaintiff claims, or the man in charge. Did he give instructions relating to any of the cargo-transactions?
* Bank customer relations manager to understand who they dealt with for the cargo trades

Is this a red flag or what?
Aug 12, 2019    Dr Goh resigned as director and CEO of IPP.
Aug 16, 2019    Judicial Management application filed by IPP (at banks' requests).
Aug 22, 2019    Dr Goh met with Maybank and SocGen, That's when (he said) he learnt of the extent of the total due to banks Socgen US$90m and Maybank US$69M was more than the monthly turnover of US$60-US$70m per month turnover of bunkering business. It was also when he learnt of the cargo trades.
Aug 22, 2019    Dr Goh emailed the bank of his suspicion of fraud.

Dr Goh resigned 4 days before the JM filing strongly suggesting he knew something was wrong.
Resignation before a collapse is often interpreted (especially in civil or commercial court) as an indicator of apprehension, if not complicity.

The trial court believed he must have known or ought to have known (an interesting doctrine which I shall cover in a follow-up blog) what was going on due to his position. Held him liable for breach of director’s duties.

The appellate court accepted that his knowledge of cargo trades was limited, Found that while the timing looks suspicious, the evidence (e.g. internal emails, his conduct) did not conclusively show actual knowledge of fraud or cargo trades. Thus, reversed the High Court’s judgment against him.

Mercuria:
* There was the incident of the auditor sending out confirmation requests to Mercuria on 7 Feb 2018 in respect of y/e 31 Dec 2017. Such requests by auditors to confirm account balances are routine tasks. The fact that this routine matter required Goh's signature suggests he micro-manages which seems to be at odds with the contention he was blindsided with regards cargo trades.

* On the question of the large balance of US$132m due from Mercuria should have been a red flag, the court accepted Goh's explanation that such large balances was nothing exceptional because their trade with Mercuria is in the billions. The appellate court went at length into the issue of delinquency. This does not concern my points here, so let's let it pass. 

* Mercuria did not respond to the confirmation request and the court accepted the auditor's explanation. I am dropping this here just for information (nothing to do with my point on the fraud). The auditor explained that upon non-confirmation, they did other tests to satisfy themselves : (1) They spoke to Goh. (2) They did other checks (no details mentioned) but I suppose they check back to invoices to ensure there were prima facie transactions. (3) They felt a non-confirmation is positive given that if balances were incorrect, surely the customer would have responded (something the court seems to concur). This is in contrast to the legal doctrine of delivery doesn't mean receipt which follows that non-confirmation doesn't mean no disagreement. From my personal experiences I can say most companies treat such confirmation requests as very low priority. Many simply throw them into the waste basket. For me personally, I took it as an opportunity to check my own records. Where balances agree, I may confirm or simply ignore. However, from my experience as an auditor sending out such confirmations, my immediate action to non-respondents was to send a second confirmation. This the IPP auditor failed to do. If the balances are substantial, such as Mercura's outstandings, and there was no respond to the 2nd request, I get my client's accountant to pick up the phone to contact his customer's accountant to co-operate. This works all the time. There were times when balances are substantial and I want assurance of a response, I did a non-standard approach of including an additional paid invoice, thus providing the customer with a higher than actual debt. This almost guarantees the customer will respond to clarify that the particular invoice has already been paid. There always will be some customers who do not respond. What auditor's will do is to assess the percentage of non-confirmations. If a huge balance of debt balance is not confirmed, the auditor may have to consider a qualification to the accounts. The court did not inquire of the auditor what was Mercura's balances in relation to total trade debtors.

* Zoe Cheung Cha Na, the other IPP director, is portrayed as the master-mind handling all the cargo trades without keeping Goh in the loop. She has been described as Singapore-based and Hongkong-based. There is conflicting talk of Zoe or Dragon executing all the trades in HK. The court made no attempt to demand discovery how the trades were executed which could vindicate or implicate Goh. Perry Mason would certainly want..

The Police Report:
The court seems to frame Goh's 22 Aug 2019 email correspondence with Investigating Officer Tan Ruiyun of the Singapore Police Force as a 'police report'. Framing it this way helps to exonerate Goh in the sphere of public opinion. In Singapore, a formal police report can be done through several OFFICIAL chanels:
* In person at police station - for major crimes, such as assaults robbery, fraud, rape, corruption. This is the fastest and most appropriate route where officers can immediately assess and respond.
* Online using Police@SG website - This is not suitable for emergency or time-sensitive major crimes. For serious offences, the online form will direct you to make an in-person report at police station.
* Mobile app Police@SG - For non-emergency minor cases.
* Emergency hotline 999 - For emergencies or crimes in progress. Operator will dispatch officers asap and you may be requested to file a formal report later.

Email report is not accepted because of issues of authentication, chain of custody, confidentiality and data protection.

A police report is formalised when a case number is issued. In the case of Goh's email, there is no known public record of a case number, nor of any police investigation. However, SPF does not publicise investigations until the stage when charges are filed. If there has been a filed case, it's been almost 6 years, what has the police been doing?

IPP's bunkering licence was suspended on 27 Jun 2019 by the regulator Maritime and Port Authority of Singapore (MPA). If I am not mistaken, IPP should have 2 licences - Bunker Supplier Licence and Bunker Craft Operator Licence. It must be their craft-operator licence that was suspended because an MPA inspection detected tampering of their mass flow meter which is a serious bunkering fraud. Goh's email correspondence with IO Tan was in connection with police investigation into this bunkering fraud. The fact of the matter is, Goh made no police report with regards the cargo trades although he informed IO Tan of his suspicion fraud had taken place. One wonders why IO Tan didn't advise Goh to lodge a separate formal police report. Or whether as IO Tan's investigation into the bunker fraud goes up the channel, did anyone in the SPF initiate a new case file? Do we have another 'sleepwalker'!

Media says Goh may have been vindicated in this civil case, but he is still under investigation in a criminal case. That case involves New Silkroutes Group. In 2023 he was charged under the Securities and Futures Act for false trading and market manipulation in 2018 when he was the CEO. That case has nothing to do with the IPP fraud case for which there does not appear to have a police report.

The Bankers:
Socgen is owed US$90m and Maybank is owed US$69m. They could not take any action against IPP as the company was already in liquidation. So they funded the liquidator to take recovery action against Goh in a civil suit. The liquidator Deloitte Touche probably wouldn't have taken action if IPP is already out of funds. In a liquidation it is normal for creditors to step in to fund a liquidator to take recovery action. This would be a court-approved action. In addition to attempt recovery from Goh, the banks took further action.

Societe Generale Singapore Branch applied for Mareva injunction in the courts in Hongkong:

In 2019 Socgen applied for ex parte Mareva injunctions against 11 defendants -
Inter-Pacific Petroleum Pte Ltd (IPP)
Inter-Pacifir Group Pte Ltd
Chuang Xin (China) Group Limited
Zoe Cheuna Lai Na (IPP director)
Stephen Lau Kai Yung
Legend Six Holdings Ltd
John Chen Chun
Pacific Dragon (HK) Energy Limited
Daisho Microline Limited
Oriental Everise Limited
Newocean Petroleum Company Limited

An ex-parte Mareva injunction allows the bank to freeze assets. Socgen obviously knew where the funds flowed from their own internal records. Mareva injunction is usually processed very quickly as speed is of essence when freezing assets. Within a few months, Socgen had won their cases against the 11 defendants. I have no info as regards their success at freezing assets. I am doubtful of success as fraud money moves very fast. Socgen may well need to apply for NPO and BTO to trace the assets. It is worth noting Socgen specifically mentioned 3 defendants as having received part of the ill-gotten proceeds - Pacific Dragon, Daisho Microline and Oriental Everise.

Maybank Singapore applied for Norwich Pharmacal Order (NPO) and Bankers Trust Order (BTO) in Hongkong courts:

Maybak applied for NPO and BTO in 2019 against 2 defendants:
Legend Six Holdings (Limited)
Bank of China (Hongkong) Limited

This is a legal process where a person (often a victim of wrongdoing) asks the court for assistance.
(NPO):
The purpose of an NPO is to obtain information from a third party who was involved in or facilitated a wrongdoing, even if innocently. The applicant needs help identifying the wrongdoer (e.g., a bank account holder, IP address user, etc.). Example if you are defamed anonymously online, you can apply for an NPO to compel an internet service provider to reveal the poster's identity.
BPO:
The purpose of a BTO is to trace and preserve misappropriated funds or assets, especially in fraud cases. The applicant wants to follow the money trail or prevent dissipation of assets. Example if money is stolen and routed through various bank accounts, a BTO can force the banks to provide details and even freeze those accounts.

It is from Maybank's NPO and BTO application that I gained insight and some clarity, as against what transpired in the appellate court. What is now known:

(a) Maybank's letter of offer (LOA) to IPP dated 10 May 2018 indicated IPP is said to have been a purchaser of fuel oil, carrying on the business of bunker trading.
(b) The LOA indicated the purpose of the facilities was, among other things, for IPP’s trade financing in petroleum products. (In other words, it can include cargo trades which means trading, and purchasing for inventory for bunkering business. This is at odds with Goh's explanation that he manages only bunkering and is unaware of cargo trades. He was using the same facility)
(c) The LOA was secured by, inter alia, a personal guarantee dated 10 May 2018 given by Ms Cheung Lai Na, a Hong Kong resident.
(d) Between June and August 2019, IPP applied for twelve letters of credit. The beneficiaries of these L/C’s were two Singaporean companies, namely Citus Pte Ltd (Citus) and its subsidiary Citus Trading Pte Ltd (CTPL).
(e) The documents submitted by IPP with each L/C were along these lines:
IPP was purchasing fuel oil from Citus and/or CTPL, upon which IPP would on-sell the goods to other third parties including Mercuria Energy Trading Pte Ltd, Sinochem International (Singapore) Pte Ltd and PETCO Trading Labuan Company Ltd. The above transactions were allegedly supported by sales contracts between IPP and Citus/CTPL, contracts between IPP and the Customers, and invoices issued for the transactions by IPP and Citus/CTPL.
(f) The goods supplied by Citus/CTPL to IPP were previously supplied by Legend Six. In short, the fuel oil is said to have been sold from Legend Six, to Citus/CTPL, to IPP and then to the Customers.
(g) During the period June to August 2019, Citus/CTPL presented the L/Cs to the Maybank for discounting. The applications for discount were evidently supported by bills of lading where:
* The shipper was Legend Six. The goods to be shipped were stated to be “RMG 380 CST” fuel oil.
* The port of loading for all shipments were Malaysian and the purported destination was Singapore.
* Each of the B/Ls was purportedly signed by the vessel’s master accompanied with the master’s chop.
(h) The plaintiff then discounted the L/Cs on a full recourse basis and credited the relevant funds to Citus and CTPL’s USD bank accounts with the Maybank. Thereafter, Citus/CTPL gave instructions to the plaintiff to transfer the funds (less certain amounts) to Legend Six’s account with BOC.
(i) However this raft of purported transactions turns out to have been a fraud. In August 2019, Maybank's solicitors wrote to the IPP's Customers, reminding them to make payment for invoices issued by IPP (and which had been assigned to the plaintiff by way of a deed of charge dated 23 April 2014).
(j) Each of the IPP's Customers denied that they had signed any contracts at all with IPP for the purported transactions. On this basis, they each denied liability to make the requested payments.
(k) Upon separate inquiry, ten of the ship owners of the relevant vessels stated that none of the purported shipments had in fact taken place and that the bills of lading were all forged.
(l) The plaintiff describes this state of affairs as “a classic letters of credit fraud”, perpetrated against the Maybank. The bank maintains that IPP, Cheung, Citus, CTPL, Legend Six and potentially others, were parties to this fraud. 
(m) Maybank asserts that the modus operandi was :
* Legend Six entered into fraudulent sales contracts with Citus or CTPL, in that there were no underlying sales of oil cargoes by Legend Six to Citus or CTPL.
* In turn, Citus or CTPL entered into fraudulent sales contracts with IPP, again with no underlying sales of oil cargoes.
* IPP applied for the twelve L/Cs on the basis of “fictitious” sales of oil cargoes using forged documents.
* Citus or CTPL applied to Maybank for discounting of the L/Cs using forged bills of lading, when there had been no actual loading of the oil cargoes onto the vessels in question.
* Maybank discounted the L/Cs and credited the relevant funds to Citus and CTPLs’ accounts with Maybank, which funds were then transferred to the Legend Six BOC Account.
(n) On 20 August 2019 IPP applied to the High Court of Singapore for appointment of judicial managers. A formal order for judicial management was made by the Singapore courts on 4 September 2019.

Maybank's application for NPO and BTO mentioned Socgen's application for Mareva injunction seems to be victims of fraud under similar circumstances. So it seems as far as IPP is concerned, they utilised their trade financing facilities with Maybank and Socgen to open L/Cs with Citus or CTPL as beneficiaries and submitted IPP sales invoices which were assigned to the banks. Since the customers are big name petroleum traders, the assignment of sales invoices reduces the banks' credit risks somewhat. However, there is no mention of whether these were legal or equitable assignments. So IPP supposedly procures via L/C and sells to their customers on an account basis. In other words, the transaction was back-to-back, but it was not a back-to-back L/C. A back-to-back L/C would have reduced the Maybank and Socgen's credit risks considerably.

The big hole in Maybank's narrative:
From what I understand from my humble experience in trade financing, there seems to be a problem with Maybank's description of how Citus or CTPL 'applied to Maybank for discounting the L/Cs' (m) above, and the bank pays out to Citus/CTPL which then transfers to Legend Six's account with BOC HK. There is no such thing as discounting L/Cs. Nobody does that. Citus/CTPL as beneficiaries have nothing to do with Maybank as the L/C issuinjg bank. Absolutely nothing.

Let me give a quick primer 101 on trade financing so you can see the flow of documents requiring signatures passing by.

In a real back-to-back trade, the trader first has a supply source with price offered. He keeps this on hold till he secures a sales and then confirms the purchase, locking in his profit. IPP first has the sales with their customers. Since this was a fraud, there would be absence of documentation of contract negotiation and confirmation leading to a sales invoice. So someone types a fictitious sales invoice. Who signs?

IPP then applies the L/C and submits the application form together with sales invoice to Maybank. Sales invoice is required in this case because of the assignment arrangement. The L/C Issuing Bank, ie Maybank, then issues the L/C and dispatch (or via SWIFT) to the Advising Bank which are banks designated by Citus and CTPL. The Advising Banks advise Citus/CTPL of receipt of L/C. Maybank copies the L/C to IPP.

The suppliers Citus/CTPL then submit false shipping documents as stipulated in the L/C to their Advising Banks. There was no delivery of goods since this was a fraud. Shipping documents normally include Bills of Lading, sales invoices, packing notes, and a draft, ie bill of exchange which may be sight, or term (30,60,90 or 180 days generally). Advising Banks sent documents to Maybank. In turn Maybank sents the documents to IPP against payment if the draft term is sight, or against acceptance if draft term is 'x' number of days. In documentary credits (trade financing) every document, word for word, letter by letter, must be in accordance with the L/C. Any tiny deviation may be a cause for rejection. If IPP is satisfied with documents, it endorses the draft signifying their acceptance and sends the draft back to the bank.

With the Bill of Lading, IPP can proceed to receive the physical goods. But since there is a pre-sales, IPP can endorse the Bill of Lading to the customer who can proceed to receive the goods. It depends on terms of the contract. But since this is a fraud, there was no delivery and transfer of goods at all.

So how does the supplier get paid. It depends on the draft. If it is a sight draft, Maybank remits funds to the Advising Bank and debits IPP's account. Advising Banks pay Citus/CTPL. If it is a term draft, on due date, Maybank pays Advising Banks and debits IPPs account. Advising Banks then pay Citus/CTPL.

Citus/CTPL may want to have their funds earlier. They can do so by discounting the draft. But here is the catch. Citus and CTPL can discount the draft only with the Advising Banks with whom they have discounting facilities. Their Advising Banks would normally have such a facility for them because this is very low risk for them as their credit risk is on Maybank which is bound by the L/C to make payment on due date. And so here's the big problem. Maybank says Citus/CTPL 'discounts the L/C' with them and they paid out. There is no such thing as discounting the L/C. It is about discounting the draft or bill of exchange. But never mind, we can let this pass as some typo or technical writing error. The point is Citus/CTPL, as beneficiaries of the L/Cs, have nothing to do with the Issuing Bank, Maybank. They will have to discount with their Advising Bank.

There is a big hole in the narrative. The court proceedings and Maybank and Socgen descriptions never mention any L/C Advising Banks. All suppliers and customers of IPP deny any knowledge of the transactions. Citus and CTPL are bona fide respectable corporations with many years operation in Singapore. So if they are not involved, where did the L/Cs go? Where did Maybank and Socgen sent the L/Cs to? Why did Maybank pay beneficiaries of L/Cs directly instead of to the Advising Banks?
Maybank's narrative can only make sense if Citus and CTPL are also their banking customers. Which makes Maybank the L/C issuing bank to IPP and the Advising Bank to Citus and CPTL. That is the one and only reason why Maybank discounts the drafts from Citus and CTPL.

It was mentioned in the courts all suppliers and customers in IPP's cargo trades denied having done any trades with IPP. The owners of the vessels supposedly involved in delivering the goods all said the Bills of Ladings were forged, the masters never signed for the goods. Now, according to Maybank's narration, we have an interesting situation. Both Citus and CTPL are long established legitimate business names in Singapore. If they discounted the drafts with Maybank, it can only mean one thing - both Citus and CTPL are participants in the fraud.
But what if Citus and CTPL are really innocent as they claimed? Then it gets more interesting. It can only mean there is a co-conspirator within Maybank

In his email to the police, Goh mentions :
"Both banks explained that the lines were extended for cargo trading on a back-to-back basis, ie structured trades where the banks issue LCs only upon receipt of shipping documents."
I am certain there is a mischaracterisation here. And this is the problem of the plaintiff's team -- not having a subject matter expert in the court. In trade financing it is documents before goods. You get an L/C issued before the supplier can send you the shipping documents. I am certain what Goh meant here was just IPP sales invoices to the customers. These are needed when IPP apply the L/Cs because of the sales invoice assignment agreement.

My primer of the process flow of trade financing just goes to show there was so much paperwork going on that requires authorised signatures. Unless Goh did not have an office in IPP or there is conspiracy amongst all staff members to blindside Goh, or as plaintiff claims, he was "sleepwalking", Goh's explanation that he was unwary of cargo trade transactions seems a bit difficult to swallow.

Court's referral for criminal investigation:
I'm all for what Perry Mason can do. But a court is not an investigative agency. It can only deduce from the evidence presented in court and make a judgement. So it is an interesting situation where everybody knows a crime of fraud has been committed but nobody is making a police report. And in Singapore, not reporting a crime is an offence under the law! Singapore courts can refer a civil case to the police or the Public Prosecutor for potential criminal investigation if there is prima facie evidence of criminal conduct during the course of civil proceedings. Two examples here :

In the 2014 Yang Yin Case (Estate of Chung Khin Chun) started as a civil estate case. During proceedings, forged documents and abuse of powers of attorney emerged. Court and parties referred matter to CAD, leading to criminal charges for criminal breach of trust and forgery.

In the National Kidney Foundation case 2006, it's CEO T.T. Durai brought a defamation case against Straits Times. The proceedings brought out serious financial improprieties. Ministry of Health formally referred the matter for criminal investigation. The judge’s public remarks and evidence shown during trail, and most importantly, public outcry, triggered criminal action. Coincidentally, just to tickle old minds, before the commencement of the civil trial of T.T. Durai, a certain Empress Dowager threw her full support behind the embattled CEO declaring his S$500,000 paycheck was peanuts. That Empress Dowager happened to be the mother of Goh. Doesn't mean anything, just a remark for drama.

And although it's mentioned IPP owes the banks total of US$159m, it doesn't mean that is the total sum of the fraud. Only the transactions relating to cargo trading constitutes fraud. It is not established how much that is. Does anyone expect any criminal enforcement action in this IPP case? No public outcry means NO. Do note there is no suggestion that Goh is guilty of any crime, but evidence point to financial fraud committed by IPP. 

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