Keppel Offshore & Marine, Nobel Group, Seatrium.
These are some well-known companies in Singapore that have been investigated for criminal offences but against whom charges were ultimately not brought.
Just what, however, does it take for a company to be held criminally liable for acts performed by its officers and employees?
That issue was recently clarified in Public Prosecutor v. China Railway Tunnel Group Co Ltd (Singapore Branch) [2025] SGHC 101
In China Railway, a foreign-registered company (the “Company”) faced three charges under section 6(b) of the Prevention of Corruption Act for corruptly giving gratifications totalling SGD 220,000 branch to an officer of the Land Transport Authority, in exchange for favourable treatment in ongoing projects.
Although a District Court found that the Company’s employees, including one “Xi”, the manager of its Singapore branch, had engaged in the corrupt acts described above, it acquitted the Company on the ground that their conduct could not be attributed to it.
The Prosecution appealed that decision.
The High Court dismissed the appeal. It held that to be attributed with criminal liability for the acts of an individual officer or employee, it must be shown that the individual with the guilty knowledge or who performed the guilty act either:
(a) might be regarded as the “embodiment of the company”, or
(b) committed acts within the scope of a function of management properly delegated to him.
This approach would fairly allow for the individual’s acts and knowledge to be attributed to his company if the company’s directors or senior management knew that the illegal acts were being carried out but chose to do nothing. At the same time, it would not be overly broad so as to ensnare companies which may have forbidden such acts.
As Xi’s position in the Company sat relatively low within the Company’s “extensive hierarchy” and was subject to “strict reporting lines”, and as there was insufficient evidence that the Company’s top management was aware of his conduct, the High Court found it “highly unjust” to attribute his corrupt acts to the company.
The High Court observed however, that there may be limited circumstances, particularly in the context of regulatory offences, where different, “special rules” ought to apply. The result being that the acts and knowledge of even seemingly lowly employees who undertake operational or administrative tasks are attributed to their companies.
It pointed to two examples from foreign jurisdictions to illustrate how these “special rules” might operate.
First, in one New Zealand case, knowledge of a rogue employee who acquired a substantial stake in a public company was attributed to the company for the purposes of the New Zealand Securities Amendment Act which required public companies to give notice of such acquisitions. In that case, such “special” attribution was found in the backdrop of fast-moving markets and to disincentivise public companies from allowing their employees to acquire interests in their shares surreptitiously.
Another was in the context of the UK Video Recordings Act, where a cashier knowingly sold an age-restricted video to a child. The Court ruled that attributing the cashier’s knowledge to the company’s head office was the only way to make the Act effective for a nationwide chain of video shops.
The High Court’s decision provides a timely assurance to corporations in Singapore that they will not ordinarily face sanctions for unlawful acts that they are not be aware of, while at the same time, making it clear that they must still put in place measures to ensure their employees comply with the law or risk being brought to book in the event any “special rule” applies.
Key Contact: Navin Thevar, and with thanks for the support and input from Bennett Christian (Intern).