A $953 Million Singapore Fund Ensnared by Alleged Fraud
Technology startup investor Vickers Venture Partners has been caught up in the allegedly fraudulent nickel trading scheme of a Singaporean businessman and his Envy Global Trading, prompting a review by the city-state’s monetary authority.
Vickers would be the highest-profile investor yet to have
fallen victim to the suspected $740 million swindle, which Singaporean
authorities have said could be the biggest investment fraud the financial hub
has ever seen. The alleged mastermind, Ng Yu Zhi, has been charged with a range
of suspected crimes from faking the purchase and sale of nickel to falsifying
transfers from Citibank and account statements that showed millions in funds.
Licensed fund managers must have policies to manage risks,
including proper checks before investments, MAS said in an emailed response to
Bloomberg’s queries on Thursday. “We are performing a supervisory review” of
Vickers Venture Partners (S) Pte Ltd. to “ascertain that it has met these
requirements.”
Vickers Venture’s founder Finian Tan said in a reply to
Bloomberg’s query that he was a personal investor in the receivable financing
funds floated by Envy Global Trading, which authorities believe involved false
contracts. Two Vickers funds were also investors in companies with exposure to
the same trade, he said, adding that the initial due diligence process did not
raise any red flags.
Tan also confirmed that Ng is among investors in a company
that made a small investment in Vickers and another company that put a small
amount in one of its seven funds. A representative for Ng didn’t immediately
respond to an emailed query.
Vickers has $953 million of assets under management,
including co-investments. Its founder and chairman was an early investor in
Chinese technology giant Baidu Inc. Vickers said in 2020 it received $200
million in commitments for its sixth fund, which is targeted at $500 million.
“We are expecting this year to be the best ever year for
both funds even if we have to write off the RFEGT investments to zero,” Tan
said in a statement, referring to the receivable financing investment. “As
venture capitalists, we swing for the fences. And when mistakes occur, we
should of course try to minimize them.”
Tan said his fund’s ability to hit a “home-run” by taking
risks has allowed it to produce outsized returns in the past. “If we slow down
our swing and can no longer hit home-runs, then we are done for.”
The fraud allegations against Ng center on his dealings at
Envy Asset Management and Envy Global Trading, companies he controlled and
where he was a director. Of the more than S$1 billion ($749 million) that was
invested in the companies, S$300 million was transferred to Ng’s personal
account while an estimated S$200 million remains unaccounted for, prosecutors
alleged in court proceedings last month.
While investors received payments worth S$700 million,
they’re owed another S$1 billion based on the face value of outstanding
contracts, prosecutors said.
Singapore’s High Court last week approved KPMG LLP as the
interim judicial manager of three companies that are linked to the case.
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