- Joined
- Apr 9, 2009
- Messages
- 3,070
- Points
- 0
HE ALLEGED that his fellow directors had abused more than S$1.5 million of government subsidies.
Then, he alleged that a senior civil servant had interfered in a complaint he had lodged against these same directors with the Singapore Workforce Development Agency (WDA).
Company director Raymond Wong made these allegations in court.
Mr Wong had alleged that Reflexology and Holistic Health Academy (RHHA), a health training academy, had made fraudulent claims to the Skills Development Fund (SDF).
Mr Wong had bought a stake in RHHA through his investment vehicle, Woodcliff Assets Limited RHHA provides training and certification for foot reflexology, massage, beauty, manicure and pedicure courses.
It is an accredited training provider and qualifies for government subsidies from the SDF.
Mr Wong had gone in person to WDA, which oversees the SDF, with his complaints in August 2008.
The allegations were raised again in the Supreme Court Thursday in the ongoing suit and countersuit involving Mr Wong and the four directors of RHHA.
They are Mr Nick Chiang, Ms Ivy Loh, Ms Shirley Lee and Mr Michael Wong.
Mr Raymond Wong alleged that RHHA and five other companies with common shareholders had contravened the guidelines in the funding of training courses by the SDF.
He said they had circumvented the cash co-payment required of companies when sending staff members for training.
He also alleged that the companies had claimed up to 90 per cent of the SDF subsidy by declaring trainees as external to the companies, which allows for more funding, rather than internal, or in-house trainees.
He also said the companies would send more trainees than necessary for the courses and organise more courses per person than needed.
It also emerged in court yesterday that Mr Wong had written an e-mail to Manpower Minister Gan Kim Yong to seek his help when he heard from a WDA officer that there could be some interference.
When asked by Justice Judith Prakash why he wrote to the minister, Mr Wong said: "Because Edmund Lim (WDA officer) expressed concern of getting interference from a senior civil servant.
"He (the senior civil servant) is the brother-in-law of Ivy Loh (one of the defendants)."
After that complaint, in Oct 2008, RHHA was asked to return $1.67 million in training assistance for allegedly breaking the rules governing the administration of the SDF.
Against the spirit
The WDA noted that "RHHA had, through a system of loans to its related companies,... indirectly paid for the unsupported portion of the course fees", and that "these companies in turn giving cash disbursements and renovation subsidies to its franchisees" had gone "against the spirit of the SDF".
The SDF's money is meant to be used only to upgrade the workforce and improve employability of those joining or rejoining the workforce, but "not as a means of enriching Training Providers".
There was a meeting on Oct 23, 2008, between WDA's Edmund Lim and Mr Foo Piao Zhou, and RHHA's Nick Chiang.
And on Nov 25, 2008, the WDA sent another letter exonerating RHHA from any penalty action. These are some of the things brought up during the trial of Mr Wong against the rest of the directors.
Among other things, the two parties are fighting over misrepresentation, minority oppression, winding-up of companies, recovery of shareholders' loans and breach of the directors' duties.
Mr Wong, through his investment vehicle Woodcliff Assets Limited, is claiming that he had invested $1.9 million to buy up 33 per cent of a group of sixcompanies called My Foot Group (MFG) in 2005.
MFG consists of training provider RHHA, MyFoot International (MFI), My Foot Reflexology (MFR), My Summer Day Spa (MSS), The Relax Room and Career Design Hub.
Now, Mr Wong, via Woodcliff Assets Limited, wants out from the deal and also wants his money back on the grounds that the MFG's franchise model was a sham and not a true franchise model.
During cross-examination by the defendants' lawyer on Tuesday afternoon, Mr Wong said he discovered the so-called scam through an auditor's report.
He had commissioned the auditor firm to inspect the accounts with respect to franchise and royalty income, payment of franchise fees and amount due to directors, among others.
On Wednesday, the defendants' lawyer, Mr Harish Kumar of Rajah & Tann LLP, asked Mr Wong if the auditors "were looking at these because you asked them to look at them".
Mr Wong said he asked for related party transactions.
Mr Kumar then suggested that Mr Wong was "trying to find out how money is flowing from RHHA to other related companies" and was "trying to make good a theory" he had.
Mr Wong said that the auditor came up with it and he didn't invent it.
Referring to the letter by WDA dated Nov 25, 2008, Mr Kumar said: "WDA did exonerate RHHA from your accusations. Then you latched on to paragraph 3 (of the letter) because WDA said in future it will support (the company) based on in-house funding rates due to the related nature of the companies."
Mr Wong insisted that if the companies have wrongly claimed the subsidies, they should return the money to WDA.
"In my mind, RHHA, MFI and MSS are all the same company," Mr Wong said.
When asked by Justice Prakash that if WDA took no action and if "nothing has happened, why are you so fussed?", Mr Wong said: "It might come out later. WDA didn't recall (the money) now, but it doesn't mean it won't in the future."
This article was first published in The New Paper.
