An ultra-high net worth Chinese businessman is suing four former staff in Singapore for allegedly misappropriating S$74 million (US$56 million), highlighting the vulnerabilities of certain family office structures.
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Zhong Renhai, the owner of Lee Fung International (LFI) and family office Panda Enterprise in Singapore, has accused four former employees of creating fraudulent transactions and fabricating documents to misuse funds, according to a high court document.
A judge upheld a worldwide order to freeze the assets of the employees, who were based in Singapore, along with a British Virgin Islands entity controlled by them.
The Chinese businessman discovered that the staff members allegedly misappropriated the money from LFI and his family office in December 2023, which led to the removal of the four by January last year.
External forensic accountants later found that S$74 million had been allegedly paid out from Zhong’s accounts. Nikkei reported the court case earlier.
Family offices are gaining traction globally, yet many lack the same level of checks and balances practised at banks. The city state has stepped up scrutiny of financial institutions after a multibillion-dollar money laundering scandal.
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Singapore has been seeking to become a top wealth hub, attracting more than 2,000 single family offices as of the end of last year.