Indian-origin company director jailed in Singapore for dereliction of duty in Wirecard AG case

A 60-year-old Indian-origin director of a company in Singapore was sentenced to four weeks in prison over dereliction of duty. The director, Thilagaratnam Rajaratnam, was also disqualified from acting as a director in any company for five years.

Rajaratnam was the sole director of Strategic Corporate Investments Pte Ltd (Strategic), and was convicted on October 30, 2023, for failing to use reasonable diligence in the discharge of the duties of his office.

On Wednesday (February 7), he was sentenced to four weeks imprisonment, and disqualified from acting as a director for five years.

Thilagaratnam’s brother is R Shanmugaratnam, a director of Citadelle Corporate Services Pte Ltd (Citadelle). The company provided corporate secretarial services, and its clients included companies owned by one James Henry O’Sullivan. He is the beneficial owner of Strategic.

Thilagaratnam’s involvement with Strategic began in 2014 when he agreed to become the sole director and shareholder for a nominal fee of $500 a month.

However, he claimed to have no involvement in the company’s operations or management.

Despite being the sole signatory to Strategic’s bank account, Thilagaratnam remained oblivious to the company’s financial affairs.

Aside from signing company documents, Thilagaratnam was not involved in, and did not take any steps to find out about Strategic’s business and affairs.

In particular, Thilagaratnam did not know that between December 2014 and September 2015, Strategic’s bank account received a total of EUR 54 million from Wirecard AG, an international payment and financial services provider incorporated in Germany. These funds were subsequently transferred to various parties, stated the Singapore Police Force in a press release.

Thilagaratnam admitted to signing misleading letters prepared by his brother, R Shanmugaratnam, addressed to Wirecard AG.

These letters falsely stated that Strategic held substantial amounts of money in its accounts, ranging from EUR 29 million to EUR 54 million.

Thilagaratnam signed these letters without verifying the balances, showcasing a lack of due diligence.

The case has broader implications, as O’Sullivan, along with R Shanmugaratnam, faces charges related to similar misleading letters issued by Citadelle to Wirecard entities.

Court proceedings against O’Sullivan and R Shanmugaratnam are ongoing, shedding light on the extent of corporate misconduct involving individuals of Indian-origin in Singapore.