Bankruptcy Offences in Singapore – Part I

Bankruptcy Offences in Singapore – Part I

Introduction

If the court declares someone Bankrupt, they must abide by the laws mentioned under the Insolvency, Restructuring and Dissolution Act 2018 (IRDA). Bankrupts have some compulsory duties mentioned under the Act which they must follow. People who are declared bankrupt are also disqualified from doing certain things till they clear their debts or pay the target contribution. The IRDA mentions some offences which can attract penalties if committed by a Bankrupt person.

Official Assignee

An Official Assignee is a person who manages and looks after the bankruptcy estate. His duties include administering the bankruptcy estate and helping the bankrupt person pay his debts or achieve his target contribution to get out of bankruptcy. Section 402(d) states that the Official Assignee also includes a trustee in bankruptcy.

Offences of Non-Disclosure

Section 405 of the IRDA mentions the offences of non-disclosure. A bankrupt person is said to have committed this offences if such bankrupt person does not disclose all his property which would be included in the bankrupt’s estate, to the best of his knowledge and belief. Subsection (b) of Section 405 states that a bankrupt person will also be held liable under this section if they do not inform the Official Assignee about the disposal of any property which would have been included in his estate. The bankrupt person has to inform the Official Assignee how, when, to whom, and for what consideration the property was disposed of. If such disposal was in the ordinary course of a business carried on by the bankrupt or for his family expenditures, subsection (b) is not applicable for such disposal.

The Offences of Concealment of Property

Section 406 of the IRDA states that a person is said to have committed the offences of concealment of property if:

a) The bankrupt refuses to relinquish possession of any part of the bankrupt’s estate that is in the bankrupt’s possession or control and that the bankrupt is obligated by law to surrender to the Official Assignee, or as the Official Assignee may instruct.

b) The bankrupt hides any debt owed to or from the bankrupt, as well as any property worth at least $1,000 or a larger sum as may be prescribed, that the bankrupt is compelled to surrender to the Official Assignee.

c) The bankrupt did anything that would have constituted an offences under paragraph (b) if the bankruptcy had been made before the bankrupt did it, in the 12 months leading up to the filing of the bankruptcy application by or against the bankrupt, or in the initial period.

d) Any property worth at least $1,000 (or such larger sum as may be prescribed) and possession of which the bankrupt is or would have been obligated to hand over to the Official Assignee is or was removed by the bankrupt during the initial period.

e) Without sufficient justification, the bankrupt fails to account for any major loss of the bankrupt’s property sustained in the 12 months before the filing of the bankruptcy application by or against the bankrupt, or the initial period, when ordered to do so by the Official Assignee or the court.

f) The bankrupt fails to provide an adequate explanation of how such a loss was suffered, when compelled to do so by the Official Assignee or the court, without sufficient reason.

The Offences of Concealment of Books and Papers, Falsification, etc.

Section 407 of the IRDA states that a person is said to have committed the offences of concealment of books and papers, falsification, etc. if:

a) Any false entries in any book, document, or record pertaining to the bankrupt’s estate or affairs are made, or caused or permitted to be made, by the bankrupt.

b) The bankrupt disposes of, modifies, or omits any book, document, or record related to the bankrupt’s estate or affairs or causes or authorizes the disposal, alteration, or omission in any book, document, or record relevant to the bankrupt’s estate or affairs.

c) Any books, documents, or other records related to the bankrupt’s estate or affairs are concealed, destroyed, mutilated, or falsified by the bankrupt, or the bankrupt causes or authorizes their concealment, destruction, mutilation, or fabrication.

d) The bankrupt did anything that would have been an offences under paragraphs (a), (b), or (c) if the bankruptcy order against the bankrupt had been made before the bankrupt did it in the 12 months leading up to the filing of the bankruptcy application by or against the bankrupt, or in the initial period.

e) The bankrupt restricts the production of any books, documents, or records connected to the bankrupt’s estate or affairs, or at least did during the initial period.

f) All books, documents, and other records that the bankrupt has custody or control and that pertain to the bankrupt’s estate or affairs are not delivered up to the Official Assignee, or as the Official Assignee may order.

The Offences of False Statements

This is another type of bankruptcy offences mentioned under section 408 of the IRDA. It states that a person is said to have committed the offences of false statements if:

a) The bankrupt is or has been, guilty of any false representation or other deception to acquire the permission of the bankrupt’s creditors, or any of them, to an arrangement relating to the bankrupt’s affairs or bankruptcy.

b) Using false losses or expenditures, the bankrupt tries to account for any part of the bankrupt’s property.

c) The bankrupt did anything that would have been an offences under paragraph (b) if the bankruptcy order against the bankrupt had been made before the bankrupt did it, at any meeting of the bankrupt’s creditors in the 12 months before the bankrupt made the bankruptcy application, or (whether or not at such a meeting) at any time during the initial period.

d) The bankrupt fails to notify the Official Assignee as early as possible after learning or suspecting that a fraudulent debt has been shown by any person under the bankruptcy.

e) Any false statement or substantial omission in any statement concerning the bankrupt’s affairs is made by the bankrupt.

The Offences of Fraudulent Disposal of Property

If the bankrupt makes or causes to be made, or has made or caused to be made, any gift or transfer of, or any charge on, the bankrupt’s property, with the intent of defrauding the bankrupt’s creditors, or depriving the bankrupt’s creditors of the property if a bankruptcy order is made against the bankrupt, during the five years preceding the date of the bankruptcy order against the bankrupt, he is said to have committed the offences of fraudulent disposal of property according to section 409 of the IRDA.

He will also be held liable under this section if the bankrupt hides or removes, or has hidden or removed, any part of the bankrupt’s property after, or within two months before, the date on which a judgment or order for payment of money has been obtained against the bankrupt. Such a judgment or decree was not met before the filing of his or her bankruptcy petition.

The Offences of Absconding with Property

According to section 410 of the IRDA, a person is said to have committed the offences of absconding with a property if:

a) The bankrupt escapes or seeks to leave or makes arrangements to leave Singapore with any property worth at least $1,000 (or such larger sum as may be prescribed) that the bankrupt is obligated to surrender to the Official Assignee.

b) The bankrupt did anything that would have constituted an offences under paragraph (a) if the bankruptcy order against the bankrupt had been made before the bankrupt did it, in the 12 months leading up to the filing of the bankruptcy application by or against the bankrupt, or in the initial period.

Punishment for the Offences (Mentioned Above)

The punishment for the offences mentioned in sections 405, 406, 407, 408, 409, and 410 is imprisonment for a period not exceeding 3 years and a fine not exceeding $10,000 or either.

Investigation Powers

Section 403 states the powers of the Official Assignee or any officer authorized by him/her concerning investigating any offences. The Official Assignee has the power to:

a) Require anybody who seems to be familiar with the facts and circumstances surrounding the offences to appear before the Official Assignee or authorized official (as the case may be) on the day and at the hour mentioned in a notice sent by the Official Assignee.

b) Examine anybody who appears to be familiar with the facts and circumstances surrounding the offences, and demand that person to answer any questions about the offences that the Official Assignee or authorized officer may pose, as the case may be.

c) Demand any individual to provide any information, or to produce any book, document, or copy of a book, document, in their possession that may relate to the offences, and to view, keep, copy, photograph, or take extracts from any such book, document, or copy without cost.

Punishment for not Complying with the Official Assignee

Any person who fails to appear before the Official Assignee or an authorized officer as required by notice without reasonable excuse or fails to furnish any information or produce any book, document, or copy of a book or document in that person’s possession shall be liable on conviction to a fine not exceeding $1,500 or to imprisonment for a term not exceeding one month, or to both.

Any person who fails to answer any required questions without justifiable reason is guilty of an offences and subject to a fine not exceeding $3,000 or imprisonment for a term not exceeding 6 months, or both.

READ: Bankruptcy Offences in Singapore – Part I