Investor accused of putting profit over due diligence in $1.5b nickel scam

Ng Yu Zhi’s lawyer on Nov 29 accused investor Veronica Shim Wai Han of caring only about generating income from his client’s nickel investment scheme, and not about whether the underlying transactions were genuine.

Shim, a private banker for 20 years and former chief executive of a fund management company, emphatically disagreed.

She was being cross-examined by Mr Nichol Yeo, one of the four lawyers acting for Ng, on day four of his ongoing trial.

Ng is accused of masterminding a nickel-trading scam that attracted $1.46 billion from 947 investors over six years, and allegedly used the invested funds to finance his lavish lifestyle.

Ng told investors they could make profits from the buying and selling of physical nickel through his two companies.

The scheme was first offered through Envy Asset Management (EAM).

After EAM was placed on the Monetary Authority of Singapore’s investor alert list in March 2020, the scheme was moved to Envy Global Trading (EGT).

Ng claimed he could buy nickel at a discount from an Australian mining company and then sell the metal for sizeable profits.

Prosecutors say no nickel was bought or sold; earlier investors were paid with money put in by other investors.

Ng is contesting 42 charges of fraudulent trading, cheating, forgery, criminal breach of trust and money laundering.

Shim and her company, Envysion Wealth Management (EWM), are named as victims in two cheating charges.

EWM was allegedly cheated into delivering $47.4 million to EGT between September 2020 and January 2021.

Shim was allegedly cheated into delivering $955,115.08 to EGT between November 2020 and January 2021.

On Nov 29, Mr Yeo sought to establish that the nickel trading scheme was a lucrative source of income for her group of companies, and that she and her team did not do sufficient due diligence.

EWM manages a variable capital company which established the Envysion Commodity Strategy Fund. The fund was invested in EGT’s scheme.

Shim said another company under her Envysion group gets referral fees when fresh funds are put into the scheme, and when funds are reinvested after the three-month maturity period.

EWM also charges a management fee.

Mr Yeo asserted: “When you were sourcing for investors into the fund, you did not care what the underlying transactions were. All you cared about was the revenue generated.”

Shim replied: “Mr Yeo, you are insulting my professionalism. I disagree.”

She earlier testified that she was convinced that the deals were genuine after Ng showed her some documents. She also visited a warehouse where nickel was stored.

Shim said her team raised some concerns about the financial statements of Poseidon Nickel Limited, the Australian firm that purportedly sold the nickel to Ng.

She said she told her chief investment officer to check on this, and an explanation was provided by Ng.

While she did not elaborate on the concerns, she said the explanation was that trades under the scheme will not be reflected in the financial statements.

When Mr Yeo asked if she was happy with the explanation, she replied: “As long as the team thinks it’s feasible. I don’t have the expertise to understand the commodity world.”

The lawyer also asked if she had checked with the mining company.

She said she and her team concluded that Poseidon, like most big organisations, would likely ignore queries from those outside their agreements.

After Mr Yeo continued to press the point that she did not get documents from sources other than Ng, Deputy Public Prosecutor Gordon Oh questioned the relevance of this line of questioning.

This prompted Judicial Commissioner Christopher Tan to confer with the prosecution and the defence in private.

Later summing up the discussion in open court, the judge noted that the defence said the questions relate to Shim’s credibility and whether there was deception.

He added that this might veer into victim blaming if sentencing becomes an issue.

Mr Yeo ended his cross-examination by putting it to Shim that Ng did not deceive her, and that she did not care and did not want to know whether the deals were genuine. She disagreed.

Shim, EWM’s former chief investment officer Jacob Doo Chun Ki and former chief compliance officer Tan Kay Siong have each been charged with two counts under the Securities and Futures Act and the Securities and Futures (Licensing and Conduct of Business) Regulations.

Shim also faces two charges under the Official Secrets Act for forwarding e-mail correspondence between MAS and EWM to Ng.

The trial resumes in February 2025.