406. Frauds by officers

Question 1

406. Frauds by officers

Answer 1

General overview
[406.01] Section 406 is a general provision whereby an officer of the company commits an offence if he (i) by deceitful or fraudulent or dishonest means or by means of any other fraud induced any person to give credit to the company; (ii) with intent to defraud creditors of the company, makes a gift or transfer of or a charge on, or caused or connived at the levying of execution against, the property of the company; or (iii) with intent to defraud creditors of the company, concealed or removed any part of the property of the company since or within two months before the date of any unsatisfied judgment or order for payment of money obtained against the company.

Question 2

Deceitful or fraudulent means to obtain credit lines

Answer 2

[406.02] Subsection (a) catches any deceitful or fraudulent means to obtain credit facilities for the company, even if monies have not been disbursed to the company: Ong Eng Tai & Anor v PP MA 261/1996. Obtaining a temporary overdraft for the company using the company’s fixed deposit which was wrongly credited would be caught under s 406(a)