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Investors in an alleged billion-dollar nickel trading scam in Singapore are not expected to recover their losses, court documents state, as fraud and forgery claims stack up against Envy Group director Ng Yu Zhi.

Lee Si Ye, deputy managing director of Envy Group – a cluster of Singapore-based companies accused by state police of defrauding investors – says in court documents seen by GTR that the companies are “likely to become unable to pay their debts as they fall due”.

The scheme involved Envy Group companies purchasing nickel at a discount from Australia-based supplier Poseidon, which would then be sold onto other parties including BNP Paribas and Singapore-based trading company Raffemet, Lee says.

The majority of the receivables from those on-sales would be sold onto investors, who were offered returns of around 15%. In effect, Lee says, those investors were providing Envy with funds used to purchase nickel, with the opportunity to withdraw or roll over profits after 30 days.

However, according to charges filed by Singapore police in March, the forward contracts with Raffemet did not actually exist. Sources familiar with the matter tell GTR that BNP Paribas has never had any trading relationship with Envy Global Trading or Envy Asset Management.

Local press has reported that Ng used the proceeds to fund a lavish lifestyle, including the purchase of a luxury three-storey villa and a Pagani supercar.

Lee says she and the rest of Envy’s management were unaware of any possible wrongdoing until those charges were filed, stating that Ng alone would “deal and liaise with the nickel supplier and negotiate the mine contracts as well as purchases of nickel”.

The court documents show that the total estimated value of matured receivables payments owed to investors by Envy Global Trading stands at over US$1.1bn, with a further US$130mn due once existing receivables purchase arrangements mature in May.

Lee says that as of April 15, investors had issued 26 letters of demand and three statutory demands seeking recovery of sums allegedly due. Another four actions have been initiated in court by investors for alleged breaches of receivables purchase arrangements.

Yet according to the documents, Envy Group companies “are or are likely to become unable to pay their debts as they fall due”.

One company expected to lose out is Envysion Wealth Management, a fund manager set up in 2019 that coincidentally shares a registered office address with Envy but says it is operationally separate.

The Monetary Authority of Singapore says Envysion has lost at least US$35.6mn to the scheme, and the regulator has subsequently launched a review into the company’s governance and risk management.

GTR has seen three allegedly forged contracts between Envy and Raffemet that were provided to Envysion in support of its investment. The contracts are dated September, October and November 2020, and each relate to the sale of nickel briquettes for between US$8.5mn and US$9.25mn.

A spokesperson for Envysion says the company has commenced legal proceedings against Envy Global Trading, and adds: “Envysion is not the only Singapore licensed entity or institutional investor in this investment.

“Envysion’s investment team conducted extensive due diligence on Envy Global Trading and the shareholders prior and during the investment period. Investment decisions were made by the board after our team’s analysis, based on our due diligence.

“It is unfortunate that we are the named alleged victim, but we are certain that we are not the only investor in Envy Global Trading.”

Envysion had been due to launch a commodity finance investment fund in partnership with Mercuria, but in March was evasive when asked whether that was still going ahead before confirming the duo had “agreed mutually to terminate the present agreement and put this project on hold”.

 

Fake documents

City state police are continuing to bolster their case against Ng as investigations deepen, announcing on April 20 that two charges of cheating were being brought in addition to seven announced the previous month.

On April 26, Bloomberg reported that an updated charge sheet shows the total number faced by the Singapore businessman now stands at 11, with the most recent accusations centring on claims he forged electronic banking records involving Citibank in the UK.

Those records, also seen by GTR, relate to Envy Asset Management Trading (EAMT) – an entity registered in the British Virgin Islands, solely controlled by Ng. Lee says the rest of Envy’s management team were unaware this company existed.

One document shows EAMT held US$302.5mn in a US dollar account with Citibank’s London branch, plus US$10,000 in a savings account, and another shows a transfer of US$60mn to PPG Asia Limited.

They are attached to an email to Ng ostensibly from Citigroup managing director Sanjiv Sawhney. Citi declined to comment when contacted.

According to the charge sheet seen by Bloomberg, those documents were created with intent to commit fraud, and sources familiar with the matter say Citi does not hold any accounts associated with EAMT.

Prosecutors said on Monday that the alleged offences were committed while investigations are ongoing, and so should be considered “serious and urgent” in nature, Singapore’s Business Times has reported.

The court documents form part of efforts to place three Envy Group companies, including its nickel trading business, under judicial management. If approved, Wong Joo Wan of Singapore-based Alternative Advisors would be appointed as sole judicial manager of each company.

Envy has also appointed KPMG to conduct “a forensic accounting investigation” to establish whether any underlying trades took place and the extent to which investors received funds they were due.

When contacted by GTR, Poseidon Nickel chief executive Peter Harold said the company is “assisting the Singaporean authorities on this matter”. Raffemet did not respond, and BNP Paribas declined to comment. None are accused of any wrongdoing.

Envy Group did not respond when contacted.