A director and an employee of a former corporate service provider (CSP) have been jailed for abetting a nominee director’s breach of her duties under Singapore’s Companies Act.
Chen Lu, a director of Union International Consultancy Pte Ltd (UIC), was sentenced to three months and three weeks’ imprisonment on 10 September 2026. Li Xuan, a UIC employee, was sentenced to two months’ imprisonment on 21 September 2026. Each was convicted of one count of abetting a nominee director to contravene Section 157(1) of the Companies Act. Both were also disqualified from acting as directors for five years.
UIC incorporated Singapore companies mainly for clients from China. Between August and October 2020, Chen and Li recruited Li’s mother-in-law, then a 69-year-old Singaporean, to serve as a nominee director. UIC incorporated 108 companies for foreign clients that year.
Under the arrangement, the nominee director was not told when the companies were incorporated. She received no information about the clients or their businesses and had no way to contact the foreign directors. According to the Police, Chen and Li knew this would prevent her from properly supervising the companies, yet intentionally assisted her breach of duty.
Two of the 108 companies received approximately US$540,000 in fraudulent funds from two victims of business email compromise scams. The Police also stated that Chen and Li attempted to influence the nominee director to falsely claim that she knew about the companies’ affairs. This was taken into account in Chen’s sentencing.
The Police stated that a breach of Section 157(1) is punishable under Section 157(3)(b) of the Companies Act by a fine of up to S$5,000 or imprisonment for up to 12 months.
For CSPs, this case highlights the need to make a director’s role workable in practice. A nominee director should know which companies they have been appointed to, receive sufficient information about those companies and the people behind them, and have a way to ask questions and exercise oversight. CSPs should also keep clear records of appointments, information provided, communications and follow-up. An arrangement that leaves a director unable to perform these duties can expose the people who set it up to criminal liability.