The Practitioner's Guide to Global Investigations - Drew & Napier LLC

GIR

Global Investigations Review

The Practitioner’s Guide to Global Investigations Second Edition

Editors Judith Seddon, Clifford Chance Eleanor Davison, Fountain Court Chambers Christopher J Morvillo, Clifford Chance Michael Bowes QC, Outer Temple Chambers Luke Tolaini, Clifford Chance

2018 © Law Business Research

52 Singapore Mahesh Rai1

General context and principles 1

Identify the highest-profile corporate investigation under way in your country, describing and commenting on its most noteworthy aspects as it relates to your country.

The highest-profile investigation under way in Singapore involves 1MDB, a strategic development company wholly owned by the government of Malaysia. Its stated purpose is to drive economic development and encourage foreign direct investment in Malaysia. Allegations have been made that 1MDB was used to siphon state funds into the accounts of several key government officials of Malaysia. In 2016, various law enforcement authorities in Singapore announced that an investigation had commenced over 1MDB-related fund flows through Singapore. In the course of the investigation, several bank accounts were seized and dealings were ‘curtailed’. At the same time, law enforcement authorities have made requests for information to other countries, that, in turn, have also sought Singapore’s assistance. As a result of the investigation, the Monetary Authority of Singapore (MAS) found that BSI Bank Singapore committed serious breaches of anti-money laundering requirements with poor management oversight, and consequently withdrew its status as a merchant bank. On 11 October 2016, the MAS announced that it had ordered the Singapore branch of Falcon Private Bank to cease operations, and imposed fines on the Development Bank of Singapore and UBS AG following investigations into 1MDB-related fund flows that took place through these banks. The reason cited by the MAS for these actions was lapses in anti-money laundering controls.

1

Mahesh Rai is a director at Drew & Napier LLC.


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On 30 May 2017, the MAS announced that it had completed its two-year review of banks involved in 1MDB-related fund flows, calling it the most extensive supervisory review it has ever conducted. Following its review: • the MAS found that Credit Suisse and United Overseas Bank (UOB) had breached various anti-money laundering requirements and imposed fines of S$0.7 million and S$0.9 million on them respectively; and • employees of Falcon Private Bank and BSI Bank Singapore have been issued with prohibition orders barring them from providing financial advisory services or serving as a director or participating in the management of a capital markets services or financial advisory firm in Singapore. To date, four ex-employees of BSI Bank have been charged and convicted for varying offences ranging from failing to report suspicious transactions to forgery and cheating. 2

Outline the legal framework for corporate liability in your country.

Companies can be held criminally liable under the Penal Code (PC) as a company falls within the definition of ‘persons’ liable for punishment under the PC. A company may be held directly liable for its employee’s conduct if the latter is considered the directing mind and will of the company. Companies can also be held liable for offences under specific legislation, such as the Securities and Futures Act (SFA), the Income Tax Act and the Corruption, Drug Trafficking and Other Serious Crimes Act (CDSA). Companies can be held directly responsible for committing offences (applying the ‘directing mind and will’ principle), or in certain circumstances, for offences committed by employees or officers of a corporation (for instance, see Section 236B of the SFA). Historically, the approach has been to charge companies for regulatory offences instead of a PC offence. In recent years, charges have often been brought under the SFA, CDSA, ACRA and Companies Act. 3

In your country, what law enforcement authorities regulate corporations? How is jurisdiction between the authorities allocated? Do the authorities have policies relating to the prosecution of corporations?

There are several law enforcement authorities that regulate companies, as set out below: • The Commercial Affairs Department (CAD) is a division of the police that investigates white-collar commercial and financial crimes. • The Corrupt Practices Investigation Bureau (CPIB) is independent of the police and reports to the Prime Minister’s Office. The CPIB investigates and aims to prevent corruption in both the private and the public sectors. It is the only agency authorised to investigate corruption offences under the Prevention of Corruption Act (PCA). • MAS is the central bank. It administers and enforces the SFA and the Singapore Code on Take-overs and Mergers. It is also responsible for the enforcement of civil penalties for market misconduct, and for regulating and supervising financial services. Its officers have the power to compel disclosure of those acquiring or disposing securities, to inspect and order production of company books, and examine witnesses.


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• Singapore Exchange Ltd (SGX) is a market regulator of listed companies. It investigates infractions and complaints in relation to listing requirements, and takes appropriate remedial measures against the same. It also reviews listing applications and provides support on regulatory issues to listed companies. • The Accounting and Corporate Regulatory Authority (ACRA) regulates business entities, public accountants and corporate service providers. It investigates breaches of statutes such as the Companies Act (CA) and the Accountants Act. It monitors corporate compliance with disclosure requirements and regulates accountants performing statutory audits. • The Competition Commission of Singapore (CCS) is Singapore’s competition authority and it enforces the Competition Act. Its role is to promote competition in the markets. 4

What grounds must the authorities in your country have to initiate an investigation? Is a certain threshold of suspicion necessary to trigger an investigation?

Investigations commence when the suspicion of a police officer has been aroused to such an extent as to cause him or her to proceed to any action. No specific threshold of suspicion is needed to trigger an investigation. The relevant acts and regulations provide regulators such as the SGX, ACRA and MAS with independent investigative powers. The main sources of these are: • SGX: Chapter 14 of the Mainboard Rules, and Chapter 3 of the Catalist Rules; • MAS: Part IX, Division 3 of the SFA; and • ACRA: Section 31 of the ACRA Act. There appear to be few restrictions on the initiation of investigations by such regulators. The language of the relevant statutes is as follows: • SGX: Rule 307 of the Catalist Rules and Rule 1407 of the Mainboard Rules: ‘reason to believe’ or ‘is of the opinion that the circumstances warrant it’; • MAS: Section 152 SFA – ‘as it considers necessary or expedient’ for the purposes of policing the SFA; and • ACRA: Section 31 of the ACRA Act – ‘reasonably believes’ or ‘thinks necessary’. In practice, the authorities do not disclose what triggered the investigation into a particular company. 5

Does double jeopardy, or a similar concept, apply to prevent a corporation from facing criminal exposure in your country after it resolves charges on the same core set of facts in another country?

Singapore laws protect against double jeopardy such that a person is not to be tried again for a criminal offence for which he or she has been convicted or acquitted. The question of whether international double jeopardy will prevent a corporation from facing criminal exposure in Singapore after it resolves charges on the same core set of facts in another country has not been resolved in Singapore yet.


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6

Does criminal law have general extraterritorial effect in your country? To the extent that extraterritorial effect is limited to specific offences, describe those which have extraterritorial effect, the statutory basis and any conditions that must be met for extraterritoriality to apply.

Criminal law does not typically have extraterritorial effect unless expressly provided for by a statute. There is a general presumption against the extraterritorial application of criminal laws and other statutes in the absence of express words to the contrary as a matter of comity and in observance of the sovereignty of other nations (PP v. Taw Cheng Kong [1998] 2 SLR(R) 489). For example, Section 37 of the Prevention of Corruption Act (PCA) extends the application of the PCA to Singapore citizens who commit offences under the PCA outside Singapore. Further, Sections 108A and 108B of the Penal Code extended the abetment provisions in the Penal Code criminalising: • abetment by a person in Singapore of an offence committed outside Singapore if the offence would constitute an offence in Singapore; and • abetment by a person outside Singapore of an offence committed in Singapore notwithstanding that all the acts constituting the abetment took place outside Singapore. 7

Describe the principal challenges in your country that arise in cross-border investigations, and explain whether and how such challenges are dependent on other countries involved.

Authorities often face difficulties in obtaining evidence, getting parties to give evidence or to assist in criminal investigations, recovering, forfeiting or confiscating property, restraining dealings in properties or freezing of assets, executing requests for search and seizure, locating and identifying witnesses and suspects, and service of documents. Singapore tackles these challenges by entering into reciprocal treaties, some of which have been adopted and incorporated into law. Examples of these include: • the Mutual Assistance in Criminal Matters Act (Cap. 190A) (MACMA); • the CDSA; • the Extradition Act (Cap. 103) and the Extradition (Commonwealth Countries) Declaration; • the Terrorism (Suppression of Financing) Act (Cap. 325); and • the SFA. 8

What bearing do the decisions of foreign authorities have on an investigation of the same matter in your country?

Investigations by foreign authorities or requests for assistance can and often do lead to commencement of investigations by Singapore authorities. 9

Do your country’s law enforcement authorities have regard to corporate culture in assessing a company’s liability for misconduct?

Corporate culture cannot be used as a justification for misconduct by a company. There is an ever-increasing focus on encouraging good corporate culture and ethics in Singapore’s legislative and regulatory corporate governance framework. Singapore has shifted


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from a merits-based approach to a disclosure-based regime, through the encouragement of self-reporting. In line with this, many companies have set up compliance departments to ensure adherence with their obligations under the applicable legislation. This focus on good corporate governance has also been the driver of legislation in recent years. 10

What are the top priorities for your country’s law enforcement authorities?

The current top priorities in Singapore are money laundering and corruption. 11

How are internal investigations viewed by local enforcement bodies in your country?

Internal investigations are welcomed by law enforcement authorities. In some cases, the authorities may request the company to disclose the findings of their internal investigations to assist with investigations carried out by the authorities. While such findings may be provided by the company in the spirit of co-operation or as part of a bid for leniency (to avoid being charged, or as a factor to be considered at sentencing), the company may be required by law to disclose the results of its investigations in some situations (see questions 21, 26, 38 and 39). The question of whether companies can avoid disclosure on grounds of privilege has not been tested in any reported case.

Before an internal investigation 12

How do allegations of misconduct most often come to light in companies in your country?

Allegations of misconduct often come to light through complaints made by third parties (whistleblowers) either to companies themselves or to law enforcement authorities. In most cases, the identity of the complainant is not revealed by the law enforcement authorities. Reports from auditors or independent directors could also lead to internal investigations into misconduct. Often, the company’s audit committees work with external auditors and lawyers to uncover misconduct, which is then reported to the board of directors. Misconduct may also be revealed through reporting conduct encouraged by statutes – for instance, disclosure obligations under the CDSA. 13

Are search warrants or dawn raids on companies a feature of law enforcement in your country? Describe any legal limitations on authorities executing search warrants or dawn raids, and what redress the company has if those limits are exceeded.

Yes, search warrants and raids on companies are features of law enforcement in Singapore. Law enforcement authorities executing the search warrant cannot seize more items than permitted by the terms of the warrant and Section 25 of the Criminal Procedure Code (CPC). Otherwise the search warrant is liable to be quashed. The court issuing the search warrant may suspend or cancel the warrant if there are good reasons to do so (Section 27 of the CPC).


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If an illegal search was conducted, the aggrieved party may make a criminal complaint for trespass or criminal force, or commence a civil claim for damages in the tort of trespass. However, evidence obtained through an illegal search is not necessarily inadmissible; there is a judicial discretion to admit illegally obtained evidence if its admission would not operate unfairly against the accused. 14

How can privileged material be lawfully protected from seizure during a dawn raid or in response to a search warrant in your country?

It will be difficult to protect privileged material obtained during a dawn raid or a search. There is no process to quarantine allegedly privileged material for independent review. Instead, it is more practicable to assert privilege when law enforcement authorities attempt to rely on the privileged material during legal proceedings, or when the company or individual in question is charged. When the privilege is asserted before the trial, the claim is made in affidavits that set out the relevant facts about the relationship and the communications, though not the detailed contents of the communications. When the privilege is asserted in court, evidence must be led of the circumstances in which the communications came into existence. While Sections 28 and 29 of the CPC require that searches be conducted in accordance with the warrant, which must specify the documents or things that may be seized, the police have wide-ranging powers to search and seize without a search warrant in certain circumstances. 15

Are there any privileges in your country that would prevent an individual or company from providing testimony? Under what circumstances may an individual’s testimony be compelled in your country? What consequences flow in your country from such compelled testimony?

There is a qualified right against self-incrimination in Singapore. Section 22(2) of the CPC gives suspects the right against self-incrimination. The right is qualified as follows: • This right does not extend to the right of an accused to be informed of this right. • Suspects are unlikely to know of this right (rendering the right otiose) as they do not have an immediate right to counsel under Article 9(3) of the Singapore Constitution and may be questioned before receiving legal advice. • Lastly and most importantly, the Singapore courts are permitted to draw an adverse inference against the accused under Section 261(1) of the CPC from a failure to disclose to the police facts that he or she subsequently relies on in his or her defence at the trial. Under Section 258 of the CPC, if the accused is compelled to give evidence by any threat, inducement, or promise having reference to the charge against him, such evidence will not be admissible. In criminal cases, under Section 283(2) of the CPC, the court may issue a summons to compel the appearance of a witness where the person’s evidence is essential to making a just decision at the close of the case for the defence, or at the end of any proceeding under the CPC.


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16

What legal protections are in place for whistleblowers in your country?

There is currently no overarching legislation in Singapore that addresses whistleblowing. However, certain statutes and schemes have provided for the protection of whistleblowers: • Magistrates, police officers and revenue officers cannot be compelled to reveal their source as to the commission of any offence under Section 127 of the Evidence Act. However, this is no guarantee of the informer’s anonymity because the relevant officer has the discretion to provide or withhold the information. • The CCS has a scheme that permits individuals and companies to seek leniency in disclosing information on cartel activities. • No complaints regarding an offence under the PCA may be admitted in evidence in any civil or criminal proceedings, and no witness is obliged or permitted to disclose the identity of any informer. Further, courts must redact passages in any material in evidence or liable to inspection in any proceedings that contain an entry in which an informer is identified, or that might lead to the discovery of his or her identity. The CSDA also has similar provisions that protect the identity of whistleblowers as well as the information they provide. 17

What rights do employees possess under local employment law that determine how they are treated within a company if their conduct is within the scope of an investigation? What employment rights would attach if they are deemed to have engaged in misconduct? Does it differ for officers and directors of the company?

While there is no statutory protection of employees if their conduct is being investigated, employees are protected against wrongful or constructive dismissal by their companies at common law. If, in the course of an investigation, employees are wrongfully or constructively dismissed, they may sue their employers for damages. The following guidelines also protect employees who participate in internal investigations: • Guideline 12.7 of the Code of Corporate Governance (issued by the MAS) provides that the audit committee ‘should review the policy and arrangements by which staff of the company and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters’. • The Guidebook for Audit Committees (also issued by the MAS) lays out guidelines on the implementation, conduct and review of whistleblowing policies within companies. The whistleblowing policy should at least provide protection for whistleblowers, including confidentiality of identity and non-discrimination. Directors are treated no differently from employees in terms of protection, but are subject to potentially greater criminal and civil exposure for breaches of directors’ duties under the Companies Act.


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18

Are there disciplinary or other steps that a company must take in your country when an employee is implicated or suspected of misconduct, such as suspension or in relation to compensation? Can an employee be dismissed for refusing to participate in an internal investigation?

There are no mandatory disciplinary steps a company must take and much depends on a company’s internal procedures. It is common for the employee who is the subject of an internal investigation to be suspended while the investigation is under way. Singapore is an at-will employment jurisdiction and generally companies may terminate the employment as long as the termination complies with the employment contract and, where applicable, the Employment Act. There is no legal obligation on the employer to provide the employee with reasons for the termination. Hence, subject to the terms of the employment contract, an employee can be dismissed for refusing to participate in internal investigations.

Commencing an internal investigation 19

Is it common practice in your country to prepare a document setting out terms of reference or investigatory scope before commencing an internal investigation? What issues would it cover?

It is common practice for companies to prepare a document setting out terms of reference or investigatory scope before commencing an internal investigation. The terms of reference should address the following: • the aims of the internal investigation; • the scope of the investigation – in particular, the duration of the investigation, areas to be covered, who the investigator is and to whom he or she will be reporting, how internal communications should be restricted, whether the public should know of the investigation, restriction of access to documents and restriction of access to persons; • how interviews of employees will be conducted (what should happen if employees refuse to be interviewed or demand to be represented by counsel); and • whether the internal investigation conducted in conjunction with counsel is in anticipation of proceedings and whether the dominant purpose of the investigation is to prepare for proceedings (if this is indeed the case). 20

If an issue comes to light prior to the authorities in your country becoming aware or engaged, what internal steps should a company take? Are there internal steps that a company is legally or ethically required to take?

Companies should immediately engage external counsel to obtain legal advice, commence an internal investigation, minimise criminal exposure and determine what leniency programmes may be applicable. The company may have an obligation to report to the authorities under the self-reporting regime of certain statutes. For instance, the company’s obligations under the CPC and CDSA to actively self-report may be triggered. Under the CPC and the CDSA, the company may be required to disclose arrestable offences. In most cases, self-reporting is viewed favourably by the authorities, but there is no general duty to be open with the regulator.


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21

At what point must a company in your country publicly disclose the existence of an internal investigation or contact from law enforcement?

A listed company must make timely disclosure of any information it has concerning itself or any of its subsidiaries or associated companies that is either ‘necessary to avoid the establishment of a false market in [its] securities’, or ‘that would be likely to materially affect the price or value of its securities’ under the Listing Manual, Rule 703 (Rule 703). An intentional or reckless failure to disclose under Rule 703 is a criminal offence under the SFA for which the directors of the listed company may also be liable. There is no obligation on private companies to disclose the existence of an internal investigation or contact from law enforcement to the general public. 22

When would management typically brief the board of a company in your country about an internal investigation or contact from law enforcement officials?

Depending on internal policies, it is not uncommon for companies’ management only to report and brief the board of a company upon the conclusion of an internal investigation, or at least only when significant findings have been made. However, given Singapore’s shift towards a disclosure-based regime and favourable view of self-reporting, it is desirable to brief the board as soon as an investigation is commenced. 23

What internal steps should a company in your country take if it receives a notice or subpoena from a law enforcement authority seeking the production or preservation of documents or data?

It is advisable for the company to comply with any notice or subpoena and immediately disseminate and implement a document preservation policy specifying the categories of documents to be preserved, a cache where the documents are to be stored, and the list of authorised custodians. 24

How can the lawfulness or scope of a notice or subpoena from a law enforcement authority be challenged in your country?

A notice or subpoena from a law enforcement authority can be challenged by asking the court to quash it or prohibit further action by the relevant law enforcement authority. Search warrants issued by the Singapore courts under the CPC may be suspended or cancelled if there are good reasons for doing so.

Attorney–client privilege 25

May attorney–client privilege be claimed over any aspects of internal investigations in your country? What steps should a company take in your country to protect the privilege or confidentiality of an internal investigation?

Yes, companies can claim litigation privilege over investigation reports, statements and drafts that are created during internal investigations if there is a reasonable prospect of litigation, and if advice is sought for the main purpose of litigation or contemplated litigation. Legal advice privilege can be claimed over investigations provided that such reports have legal


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advice embedded in them or forming an integral part of the reports, even if the reports were drafted by third parties who are not legal professionals. Companies should adopt the following practices to ensure that privilege or confidentiality is preserved at certain steps of the internal investigation: • Counsel (whether internal or external) should be substantially involved in conducting witnesses interviews. Interview notes taken without counsel present should be kept factual, and without any comments or opinions. Privilege is more likely to attach to interview notes where the interview is conducted by counsel (internal or external) for the purpose of advising the client. • Copying a lawyer in correspondence is not enough to attract privilege. The correspondence needs to be addressed to or from the lawyer for the purpose of obtaining legal advice or receiving instructions. • Internal communications between non-legal employees may be privileged if they are entered into for the dominant purpose of gathering information to enable the company to seek legal advice from counsel. This can be demonstrated if the information was collected pursuant to a request from counsel to collect the information, and the communication is marked as ‘privileged’. 26

Set out the key principles or elements of the attorney–client privilege in your country as it relates to corporations. Who is the holder of the privilege? Are there any differences when the client is an individual?

There are two main types of legal professional privilege in Singapore law. Legal advice privilege applies to communications between a lawyer and a client for the purpose of giving or obtaining legal advice. It protects communication between a client and a lawyer to ensure that the client may confidently provide all necessary information to, and receive appropriate advice from, the lawyer. Notably, legal advice privilege only extends to communications made primarily for the purpose of giving or receiving legal advice, and does not attach to documents that existed prior to the lawyer–client relationship. Legal advice privilege persists even after the lawyer stops acting for the client and the client’s successors in title continue to enjoy the privilege unless waived. Litigation privilege is available over information when there is a reasonable prospect of a dispute and the information is provided for the dominant purpose of the dispute. It permits litigants to prepare their case in confidence, in the context of an adversarial justice system. Legal professional privilege belongs to the client and there is no difference as to whether the client is an individual or an entity. 27

Does the attorney–client privilege apply equally to inside and outside counsel in your country?

Yes, legal professional privilege applies to both internal and external counsel under Section 131 of the Evidence Act.


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28

To what extent is waiver of the attorney–client privilege regarded as a co-operative step in your country? Are there any contexts where privilege waiver is mandatory or required?

Waiver of privilege can be viewed as a co-operative step by the authorities. There are no set contexts in which privilege waiver is mandatory or required. In practice, it is rare for authorities to request that parties waive privilege. 29

Does the concept of limited waiver of privilege exist as a concept in your jurisdiction? What is its scope?

The question of whether limited waiver of privilege exists in Singapore has not yet been determined. 30

If privilege has been waived on a limited basis in another country, can privilege be maintained in your own country?

The question of whether limited waiver of privilege exists in Singapore has not yet been determined. 31

Do common interest privileges exist as concepts in your country? What are the requirements and scope?

Yes, common interest privilege exists. Common interest privilege allows one person to share privileged materials with others who have a common interest in the subject matter to which the privileged materials relate, without any loss of legal privilege. Such sharing does not amount to a waiver of privilege except as between the provider of the materials and the recipients. In addition, each recipient can assert privilege over the shared materials against a third party. 32

Can privilege be claimed over the assistance given by third parties to lawyers?

Companies can maintain legal professional privilege over investigation reports, statements and drafts that are created during internal investigations if there is a reasonable prospect of litigation, and if the advice is sought for the main purpose of litigation or contemplated litigation: Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v. Asia Pacific Breweries (Singapore) Pte Ltd [2007] 2 SLR(R) 367.

Witness interviews 33

Does your country permit the interviewing of witnesses as part of an internal investigation?

Yes, this is common. Typical internal investigations involve conducting interviews with the employees and directors, collection and forensic review of documents, emails, telephone records and electronic device transmissions, and tracing of the proceeds of fraud. Witness interviews may be recorded in statutory declarations under the Oaths and Declarations Act, which can then be used as evidence in court proceedings.


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34

Can the attorney–client privilege be claimed over internal witness interviews or attorney reports in your country?

Yes (see question 32). 35

When conducting a witness interview of an employee in your country, what legal or ethical requirements or guidance must be adhered to? Are there different requirements when interviewing third parties?

Interviewers should state whom they represent and, where appropriate, make it clear that they are not acting for the employee. This is to avoid any potential claims of conflict of interest. Employees being investigated may retain their own lawyers, especially if the investigations are likely to lead to prosecutions. Early engagement of lawyers will ensure that employee statements during an internal investigation are given with the benefit of legal advice and such statements can later be submitted to law enforcement authorities. For the company, it is important to consider whether counsel (external or internal) should be involved during witness interviews to ensure that any statements taken during internal investigations are properly protected by privilege. There are no special requirements when interviewing third parties such as former employees. 36

How is an internal interview typically conducted in your country? Are documents put to the witness? May or must employees in your country have their own legal representation at the interview?

The interviewer typically explains to the witness the reasons for the interview and the aims of the investigation. The interviewer usually has someone else present to take notes and to corroborate what was said during the interview. Often, the interviewer does not share with the witness what other witnesses have said. Confidentiality and anonymity are thus maintained. The interview is usually conducted with references to documents, emails, telephone records and electronic device transmissions. Questions are asked based on such documents. Where allegations are being made against the employee, it is advisable, but not compulsory, for the employee to be represented. This will ensure that statements given during the internal investigations that may be subsequently turned over to the police or other investigative bodies are given with the benefit of legal advice or will be protected by privilege, or both.

Reporting to the authorities 37

Are there circumstances under which reporting misconduct to law enforcement authorities is mandatory in your country?

Yes, there are several circumstances under which reporting misconduct to law enforcement authorities is mandatory under certain statutes and regulations. Listed companies have an obligation to disclose any information they have concerning themselves or any of their subsidiaries or associated companies that is either ‘necessary to avoid the establishment of a false market in [their] securities’, or that ‘that would be likely to materially affect the price or value of [their] securities’ under Rule 703. Non-compliance is a criminal offence under the SFA if the company intentionally or recklessly withholds disclosure.


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Companies also have disclosure obligations under the CPC. Under Section 424, every person aware of the commission of or the intention of any other person to commit certain offences must give information to the police. Further, Section 39 of the CDSA requires individuals to file a suspicious transaction report as soon as reasonably practicable when individuals know (or have reasonable grounds to suspect) that any property represents the proceeds of criminal conduct, in certain circumstances. 38

In what circumstances might you advise a company to self-report to law enforcement even if it has no legal obligation to do so? In what circumstances would that advice to self-report extend to countries beyond your country?

It is advisable to self-report to law enforcement even if the company has no legal obligation to do so as it may amount to a mitigating factor or a factor to be considered by law enforcement authorities to be lenient. It will also provide a basis for dialogue between the company and the relevant law enforcement authorities to ensure damage control. Companies should note that self-reporting to Singapore law enforcement authorities may trigger breaches of reporting obligations in other jurisdictions. Hence, it is usually advisable to self-report to foreign authorities as well after obtaining legal advice from the relevant jurisdictions. In any event, once disclosure has been made to Singapore law enforcement authorities, it is likely that information would be shared with foreign law enforcement authorities under the provisions of MACMA. 39

What are the practical steps you need to take to self-report to law enforcement in your country?

Before self-reporting to law enforcement, it would be ideal and advisable to first conduct an internal investigation. The internal investigation should be governed by terms of reference (see question 19). Once internal investigations are complete, counsel (internal or external) should be consulted to determine whether there is any positive obligation on the company to disclose misconduct and the extent to which disclosure should be made. Counsel (internal or external) should also be consulted to ensure privilege is maintained over any information that may come to light and to advise on possible statutory leniency provisions.

Responding to the authorities 40

In practice, how does a company in your country respond to a notice or subpoena from a law enforcement authority? Is it possible to enter into dialogue with the authorities to address their concerns before or even after charges are brought? How?

The company will typically engage lawyers immediately and seek advice on compliance with the notice or subpoena. Lawyers will also advise companies on the leniency provisions. Depending on the investigating authority, it is possible to enter into a dialogue with the authority. Also, plea bargaining exists in the criminal procedural law in Singapore by way of the Criminal Case Management System. However, this typically only takes place after the charge is brought.


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41

Are ongoing authority investigations subject to challenge before the courts?

An ongoing investigation by the authorities may theoretically be subject to a prohibitory or quashing order. However, this is subject to whether the person seeking the prohibitory or quashing order has standing, whether the authority is amenable to judicial review and whether the decision taken by the authority is justiciable. 42

In the event that authorities in your country and one or more other countries issue separate notices or subpoenas regarding the same facts or allegations, how should the company approach this?

The company should engage lawyers in each of the jurisdictions who will then reach a common position on the approach to be taken regarding the investigations in each country. It is very important to maintain a consistent position given the provisions for co-operation between Singapore’s and other countries’ law enforcement agencies (see questions 7 and 8). 43

If a notice or subpoena from the authorities in your country seeks production of material relating to a particular matter that crosses borders, must the company search for and produce material in other countries to satisfy the request? What are the difficulties in that regard?

If the material is within the custody or control of the company, the company must search for and produce the material. In practice, companies often do so to appear co-operative. Often, the location of data servers abroad can complicate searches for documents. Further, locating the custodians of documents abroad may, depending on the location, prove to be a stumbling block once news of an investigation breaks out. 44

Does law enforcement in your country routinely share information or investigative materials with law enforcement in other countries? What framework is in place in your country for co-operation with foreign authorities?

Yes (see questions 7 and 8). On 30 May 2017, the MAS announced that Singapore law enforcement agencies responded ‘expeditiously to requests for information or assistance from overseas law enforcement and regulatory authorities’, which was reciprocated during its review of financial institutions involved in the 1MDB investigations. 45

Do law enforcement authorities in your country have any confidentiality obligations in relation to information received during an investigation or onward disclosure and use of that information by third parties?

Some of the statutes that govern Singapore law enforcement authorities have provisions for confidentiality. However, these provisions are usually not absolute. For example, Section 40A of the CDSA only permits information disclosed under the CDSA to be used in civil or criminal proceedings if the Singapore courts are of the view that the information provided was either false or if justice cannot be done without disclosure of the information of the identity of the informer.


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Singapore law enforcement authorities also do not typically share information obtained during investigations with any third parties except for other law enforcement authorities. 46

How would you advise a company that has received a request from a law enforcement authority in your country seeking documents from another country, where production would violate the laws of that other country?

Lawyers in the foreign country should be engaged to determine potential civil and criminal liability in that other country. Lawyers from both countries should work together to ascertain whether it is possible to resist production. Typically, document production cannot be resisted on the ground that production would violate another country’s laws. 47

Does your country have data protection statutes or blocking statutes? What related issues are implicated by complying with a notice or subpoena?

The Personal Data Protection Act (PDPA) governs the collection, use, disclosure, transfer and security of an individual’s personal data. Corporate and personal information is also protected under various statutes (such as the Banking Act, CDSA and SFA), subsidiary legislation and the common law of confidentiality. Companies need to be aware of potential exposure, whether civil or criminal, based on the documents that have been disclosed. 48

Are there any data protection issues that cause particular concern in internal investigations in your country?

See question 47. 49

What are the risks in voluntary production versus compelled production of material to authorities in your country? Is this material discoverable by third parties? Is there any confidentiality attached to productions to law enforcement in your country?

Material voluntarily presented to law enforcement authorities may be used for collateral purposes if third parties obtain such material. Material obtained by parties pursuant to search warrants taken out under the CPC in criminal proceedings cannot be used in civil proceedings to assert rights unrelated to those protected by those criminal proceedings. If the material is in the possession of law enforcement authorities, it is not likely to be easily discoverable from them. That being said, if the company disclosing documents is listed, it is likely that this information will have to be disseminated to shareholders. Statutory provisions that compel disclosure of documents to law enforcement agencies often protect against unnecessary infringement of privacy of companies and individuals. Statutory provisions often have carve-outs excepting privileged material. For instance, disclosure of privileged documents under Section 31 of the CDSA is not required. Further, in practice, law enforcement authorities maintain the confidentiality of documents submitted to them.


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Global settlements 50

Prior to any settlement with a law enforcement authority in your country, what considerations should companies be aware of?

If the company has a presence outside Singapore, it should consider what implications the publicity of the settlement could have on its businesses abroad and treatment by foreign law enforcement authorities. 51

What types of penalties may companies or their directors, officers or employees face for misconduct in your country?

Where a company is held criminally liable, the typical sanction is a fine. Individuals may be subject to imprisonment or fines. Other than criminal and civil liability, companies and their employees may also be subject to warnings or reprimands from regulatory bodies such as the SGX and the MAS. The court may order a third party who has benefited from misconduct to disgorge benefit arising from such misconduct, on the application of the MAS or any other claimant (see Section 236L of the SFA). Companies may also be debarred from government contracts in certain circumstances (see question 54). 52

What do the authorities in your country take into account when fixing penalties?

Whistleblowing may be regarded as a mitigating factor when it comes to the sentencing of whistleblowers involved in wrongdoing, provided that the whistleblower initiated contact with the authorities before investigations began. Also, in deciding the penalties, the authorities can have regard to the level of co-operation given by the company in the conduct of the investigation (i.e., where the company self-reports). 53

Are non-prosecution agreements or deferred prosecution agreements available in your jurisdiction for corporations?

Apart from the CCS’s leniency programme for companies coming forward with information on cartel activity cases, deferred prosecution and non-prosecution agreements do not feature in Singapore. 54

Is there a regime for suspension and debarment from government contracts in your country? Where there is a risk of suspension or debarment or other restrictions on continuing business in your country, what are the options available to a corporate wanting to settle in another country?

Yes there is. The Standing Committee on Debarment (SCOD) decides all cases of debarment. The relevant grounds for debarment from government contracts include: • giving false information that has a material bearing on the award or performance of the contract; • corruption in connection with a government agency or contract; • compromise of national security or public interest; and • bid rigging.


Singapore

Companies should be aware that settlement in another country could result in the SCOD finding that a ground for debarment has occurred. However, save for investigations by the CPIB and CCS, companies will have a chance to explain themselves – which explanation the SCOD will consider in making its decision. Even in situations involving an investigation by the CPIB or CCS, companies have a right of appeal to the Singapore Permanent Secretary (Finance). 55

Are ‘global’ settlements common in your country? What are the practical considerations?

To date, no global settlements have been made public. 56

Are parallel private actions allowed? May private plaintiffs gain access to the authorities’ files?

Parallel private actions are possible. For civil suits, it is typical to put such suits on hold until the conclusion of the investigation by the authorities. A parallel private prosecution can also be taken out, although the Public Prosecutor can step in to discontinue a private prosecution at any juncture. There is no obligation on the authorities to provide access to documents and data to private plaintiffs. However, material obtained by parties pursuant to search warrants taken out under the CPC in criminal proceedings cannot be used in civil proceedings to assert rights unrelated to issues in those criminal proceedings.

Publicity and reputational issues 57

Outline the law in your country surrounding publicity of criminal cases at the investigatory stage and once a case is before a court.

Anyone publishing statements or publications that pose a ‘real risk of prejudice’ to ongoing proceedings is liable to be found guilty of sub judice contempt of court. At common law, the sub judice period commences when a suspect is arrested or charged, or when a warrant is issued or a civil suit is filed and ends when a verdict is passed. The common law criminal jurisdiction of the court for sub judice contempt is now statutorily provided for under the Administration of Justice (Protection) Act 2016. 58

What steps do you take to manage corporate communications in your country? Is it common for companies to use a public relations firm to manage a corporate crisis in your country?

Larger companies often have internal marketing, communications or public relations departments that will be trained to handle corporate crises experienced by the company. If a company has not yet experienced a corporate crisis, it may be prudent to (1) have a crisis management plan; (2) have a designated crisis management team; and (3) conduct exercises to test the crisis management plan. Companies may also choose to engage external public relations firms that specialise in crisis communications.


Singapore

59

How is publicity managed when there are ongoing, related proceedings?

The typical response to media queries to companies on ongoing investigations is ‘no comment’. The company should abide by any internal crisis management plan put into place, or take advice from established public relations firms that specialise in crisis management.

Duty to the market 60

Is disclosure to the market in circumstances where a settlement has been agreed but not yet made public mandatory?

Settlements that have been agreed but not yet made public should be disclosed as soon as possible. Such settlements could amount to information that the company is required to disclose under Rule 703 – failure to comply with Rule 703 is a criminal offence under the SFA if the company intentionally or recklessly withholds disclosure. However, such disclosures ought to be made in conjunction with the relevant law enforcement authorities.


Appendix 1 About the Authors

Mahesh Rai Drew & Napier LLC Mahesh Rai is a director in Singapore’s most celebrated dispute resolution practice. He acts for clients in a broad spectrum of complex litigation and international arbitration matters. He has handled disputes spanning many sectors, including information technology, telecommunications, oil and gas, shipping, construction and commodities. He is adept at handling complex disputes involving multidisciplinary technical issues. He has also assisted companies in conducting internal investigations, and advised on corporate governance and compliance issues. He has acted in shareholder and joint venture disputes, fraud claims and employment disputes. In 2016, Mahesh was ranked by Global Arbitration Review, and he was also listed as one of the most influential lawyers aged 40 and under. In 2017, Mahesh was one of Asialaw’s ‘Leading Lawyers for Dispute Resolution & Litigation’. He was appointed young amicus curiae by the Supreme Court of Singapore in 2014 and he was appointed to assist the High Court on novel points of law in an appeal involving money laundering.


About the Authors

Drew & Napier LLC 10 Collyer Quay Ocean Financial Centre Unit 10-01 Singapore 049315 Tel: +65 6531 2584 Fax: +65 6220 0324 [email protected] www.drewnapier.com
