A Wake-Up Call on Director Duties: The Envy Saga and Other Cautionary Tales in Singapore

Editor’s Note: This newsletter article was originally published by our team at SmartLend, our sister platform dedicated to simplifying SME financing through our network of alternative lenders. We’re sharing it here on Smart Towkay as the insights are equally valuable for business owners looking to navigate funding options and improve financial readiness.

“It’s my company – I can do what I want.”

This common misconception has led many founders and directors astray. Some entrepreneurs mistakenly believe that owning or starting a company puts them above the rules meant for mere employees. In reality, Singapore’s laws hold all directors to strict duties of honesty, diligence, and loyalty – and breaching those duties can have ruinous consequences, even for founders and majority shareholders.

Recent high-profile cases read like corporate thrillers, shattering the myth that a boss can ever be “off the hook” for wrongdoing in their own company.

The Surrey Hills Case: When Founders Fall

Consider the case of Pang Gek Teng, founder-CEO of the trendy Surrey Hills Grocer café chain. In 2025, Pang was unceremoniously sacked after an internal review uncovered alleged financial misdeeds. The company claims she falsified documents and racked up personal expenses on company credit cards – to the tune of over S$500,000.

Surrey Hills Holdings has now sued its own founder to claw back those losses, making it clear that being the business owner offered no shield from accountability. If even a company’s creator can be held liable for breaching her duties, what hope is there for anyone else who neglects theirs?

The Envy Nickel Trading Scam: Directors in the Hot Seat

For an even more dramatic example, look at the Envy Global saga – a story that could be a Hollywood script, except it ended in courtrooms and bankruptcies.

Envy Asset Management and Envy Global Trading were part of an investment scheme run by Ng Yu Zhi, ostensibly to finance nickel trades. Over S$1.5 billion poured in from investors tempted by promises of arbitrage profits in “nickel receivables.” But by early 2021, the whole enterprise was exposed as Singapore’s largest Ponzi scheme, with about S$854 million still owed to duped investors.

Ng – the mastermind – was charged with fraud, but the reckoning didn’t stop with him. Two Envy directors, Lee Si Ye and Ju Xiao, found themselves on the hook for the massive losses. Lee, an accountant-turned-director who oversaw Envy’s accounts, and Ju, an executive involved in operations, hadn’t conceived the fraud – but they had enabled it through action or inaction.

In August 2025, the High Court delivered a blistering judgment against them, ordering both to pay over S$900 million in aggregate damages for breach of directors’ duties. The judge found that Lee had been “shockingly derelict” in her duties – ignoring blatant red flags and rubber-stamping transactions that funneled investors’ money into Ng’s personal accounts. Ju, meanwhile, actively abetted the deception, forging documents to prop up the fiction of nickel trades.

Despite not masterminding the fraud, Lee’s inaction allowed the scheme to snowball; Ju’s actions concealed it. In legal terms, Lee had breached her duty of care and diligence, while Ju breached duties of honesty and proper purpose – and both were liable for the disastrous consequences.

By October 2025, Lee Si Ye had been declared bankrupt, with an unpaid debt of S$881 million, while Ju Xiao applied for bankruptcy protection on S$345 million of liabilities. These two individuals – who likely never imagined their names in bankruptcy registers – serve as living examples that directors who breach their duties can pay the ultimate price.

The Envy saga is a wake-up call that in corporate governance, inaction can be as culpable as action when it enables massive wrongdoing.

Duties of Directors in Singapore: No Excuses, Even for Founders

Under the Companies Act 1967, section 157(1), every director “must at all times act honestly and use reasonable diligence” in the discharge of their duties.

In plainer terms, directors have a fiduciary duty to act in the company’s best interests (and not their own), as well as a duty of care to be diligent, informed, and proactive. They must avoid conflicts of interest, cannot misuse their position for personal gain, and must comply with the law and the company’s constitution.

These duties apply regardless of whether the director is a hired professional, a nominee figurehead, or the company’s owner. There is no “founder’s immunity” clause – a 100% shareholder-director can breach duties owed to the company (and, in some situations, its creditors) if they treat the company as an extension of their personal pocketbook.

One principle that tripped up the Envy directors is the requirement of reasonable diligence. A director cannot close one eye to suspicious circumstances or delegate everything and “check out.” The standard is both objective and subjective , it considers what a reasonable director should have done, as well as the individual’s own knowledge and role.

Lee Si Ye, for example, was a trained accountant and the de facto finance director; the court expected far more vigilance from her when millions were being transferred to an opaque entity every month. Simply put, ignorance is not a defense.

As the High Court stressed in another case, a director is like a guard dog: it’s no use if you “have no understanding of what you are guarding.” A director must equip themselves with enough knowledge to monitor the company’s affairs.

This duty arises once a company is in a “financially parlous” state, even before formal insolvency if the writing is on the wall. In Foo Kian Beng v OP3 International [2024] SGCA 10, the Court of Appeal held that a director breached his duty by paying himself dividends and loan repayments when the company was facing a looming lawsuit and financial peril. When a company is a sinking ship, the captain can’t grab the lifeboat (or the cash) just for himself.

Breaching directors’ duties can lead to civil or criminal consequences. Civilly, courts can order directors to pay compensation or restore property to the company. Directors can also be disqualified from managing companies under the Companies Act if they’ve been grossly negligent or dishonest.

On the criminal side, a knowing breach of duties (for instance, intentionally causing a company to commit fraud) has long been an offence – but even negligent breaches can attract prosecution.

Section 157(3) of the Act makes it a crime for a director to breach the duty of honesty or diligence, punishable by fines or imprisonment.

A groundbreaking ruling in 2025, Public Prosecutor v Zheng Jia [2025] SGHC 76, signaled a tougher stance: imprisonment is now the “default” punishment for particularly lax directors, such as nominee directors who wilfully abandon their oversight responsibilities.

Other Cautionary Tales: From Sleeping Directors to Self-Dealing Owners

The Envy case may be extraordinary for its scale, but it is far from the only example of Singapore directors learning the hard way that no one is above duty.

Self-Dealing in a Crisis – Park Hotel’s Allen Law

When the COVID-19 pandemic pummeled the hospitality industry, Park Hotel Group’s Singapore arm faced severe financial distress. Its director, Allen Law, transferred the group’s prime assets to entities he personally controlled at gross undervalue prices, erasing debts those entities owed to the company.

The High Court in August 2025 found that Law had breached his fiduciary duties, ordering him to repay roughly S$32.4 million. The lesson: even if you’re the owner, you cannot funnel company assets to yourself, especially on the eve of insolvency. Creditor interests take priority, and self-dealing will be undone by the courts.

“Sleeping Director” Liability – Inter-Pacific Petroleum and Dr. Goh

Dr. Goh Jin Hian, a non-executive director of Inter-Pacific Petroleum, failed to supervise management, which engaged in dubious oil trading schemes that left the company owing over US$150 million. The High Court found that Goh had been asleep at the wheel and breached both his duty of care and creditor duty.

While his appeal later reduced the damages due to causation issues, the appellate judges confirmed he had still breached his duties. The takeaway: claiming “I didn’t know anything” is not a defense. Directors must stay informed and act when red flags appear.

Jail for Nominee Directors – Public Prosecutor v Zheng Jia

Zheng Jia, a chartered accountant, acted as a “nominee director” for hundreds of companies without oversight, some later linked to money laundering. He was sentenced to 10 months’ imprisonment – a new benchmark. The court made it clear: serving as a dummy director is legally perilous. If you lend your name, you must lend your judgment and oversight.

Preferential Payouts and Conflicts – Foo Kian Beng and Envysion Wealth Management

In another incident, Envysion Wealth Management, a fund manager linked to Ng Yu Zhi’s scheme, saw its CIO charged for neglecting his duties by failing to manage conflicts of interest. The case reaffirmed that directors in regulated sectors must disclose conflicts and uphold governance integrity.

Even celebrated founders aren’t immune: Henn Tan of Trek 2000, the company behind the ThumbDrive, was jailed for accounting fraud – a stark reminder that no status or title shields wrongdoing.

The Bottom Line

The overarching theme is clear: diligence, transparency, and skepticism are a director’s best friends.

In Singapore’s corporate ecosystem, directors are expected to be the adults in the room – the gatekeepers who ask, “What could go wrong?” and act to prevent it.

For every aspiring entrepreneur or newly-minted director, these stories should serve as a stark warning: being a director is not about prestige – it’s about accountability. The only sure way to stay off the radar of liquidators, regulators, and prosecutors is to diligently do right by your company.

When in doubt, remember: sunlight, scrutiny, and good governance are your best protection.

Forewarned is forearmed – and you’ve been warned.

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