A Chinese ultra-high net worth businessman is suing four of his former staff in Singapore, alleging they misappropriated S$74 million ($56 million), highlighting potential vulnerabilities in family office structures, Bloomberg reports.
Zhong Renhai, owner of Lee Fung International Pte Ltd. (LFI) and the family office Panda Enterprise Pte in Singapore, has accused the four former employees of creating fraudulent transactions and falsifying documents to misuse funds, according to court documents.
A judge has granted a worldwide asset freeze order against the employees, who were based in Singapore, as well as a British Virgin Islands entity controlled by them.
Zhong reportedly discovered the alleged misappropriation of funds from LFI and his family office in December 2023, leading to the termination of the four employees by January 2024. An external forensic accounting investigation subsequently revealed that S$74 million had allegedly been paid out from Zhong’s accounts. The court case was previously reported by Nikkei.
The incident underscores potential risks within family offices, which, while gaining popularity globally, may lack the robust checks and balances typically found in established financial institutions. Singapore has increased its scrutiny of financial institutions following a recent multi-billion dollar money laundering scandal.
Singapore has been actively positioning itself as a leading wealth management hub, attracting over 2,000 single-family offices as of the end of 2024.
