A CHINESE national who absconded after he was charged with authorising Singaporeans to front his purchase of landed properties worth millions of dollars pleaded guilty in court on Tuesday (Apr 16).
Zhan Guotuan admitted to authorising Hwampoa, a Singapore-incorporated company, to purchase an East Coast Road property with the intention that the company hold it in trust for him. Three other charges were taken into consideration.
Under the Residential Property Act (RPA), foreigners are required to apply to the Singapore Land Authority for approval to buy any landed residential property. Residential property should not be purchased by a citizen or an approved purchaser as a nominee of a foreign person.
The court heard that Zhan was a shareholder in two companies, Alphaland International and Xin An Technology Group, which were in the business of property development.
“The business plan was to buy landed properties in Singapore, demolish those houses, develop condominiums on (that) land, and sell the condominium units for profit. Under this plan, Alphaland was the property developer, while Xin An was the main contractor for the development,” the prosecution said.
Zhan, who was a Singapore permanent resident at the time of the offences around 2007, gave his employee Tan Hui Meng general authorisation to manage the affairs of Alphaland and Xin An in Singapore on his behalf, as he was largely based overseas and only returned to Singapore periodically.
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Tan proceeded to incorporate Hwampoa in July 2007 for the purpose of holding the East Coast properties in trust for Zhan.
“Investigations revealed that Hwampoa had no employees and no business operations,” said Deputy Public Prosecutor (DPP) Foo Shi Hao.
In or around August 2007, Tan informed Zhan about the “East Coast plan” and the plan to purchase the property under Hwampoa’s name. Zhan then authorised Hwampoa to acquire the property with the intention that it holds the property in trust for him.
Hwampoa exercised the option to purchase on Aug 8, 2007, at a price of S$2.4 million, which was largely paid from bank loans – all of which were later redeemed using Alphaland’s monies.
At a meeting in or around August 2007, Tan also informed Zhan that he purchased two other landed properties under Gan – the wife of one of Zhan’s employees – and Tan, in trust for Zhan. In total, the three properties were purchased for more than S$6 million.
Zhan was unhappy that the two other properties had not been bought under the name of his companies, but proceeded to authorise Tan’s acquisitions of these properties with the intention that they are held in trust for him.
Hwampoa has since sold the property and made restitution of S$2.1 million to the state in September 2019.
On Mar 5, 2024, Tan was sentenced to jail for two years, three months and three weeks. He was also fined S$3,000.
For Zhan, the prosecution is seeking the maximum fine of S$50,000 under Section 23 of the RPA.
DPP Foo said: “The purpose of the RPA is to prevent speculation in residential properties by foreigners because this could lead to a rise in property prices… Speculation for profit is exactly what the accused did in the present case.
“(Zhan) was no mere pawn of Tan Hui Meng. He was, after all, Tan Hui Meng’s boss. It is undisputed Tan worked for the accused, not the other way round. He was in the position to say no after he found out about the purchases in 2007. He was the intended beneficial owner for all three properties.”
DPP Foo added that Zhan had “evaded the long arm of the law” for a lengthy period of time, travelling to China in May 2017 without permission. He only returned to Singapore on Mar 1, 2024, close to seven years after he first breached his bail conditions.
“This is an indication of lack of remorse for his offences, notwithstanding he is pleading guilty to them,” DPP Foo said.
Defence lawyer Poon Pui Yee from Harry Elias Partnership argued that Zhan’s intention was always to acquire the properties for his property development business. She said: “He was not engaging in speculation of properties which the RPA was intended to prevent.”
Poon sought a fine lower than the S$50,000 proposed by the prosecution.
Zhan will return to court on Thursday for sentencing.
