FINANCIAL FORENSICS & CONSULTANCY

STRIX STRATEGIES

ABOUT US CASES

AREAS OF PRACTICE

Forensics Accounting • Expert Witness for Financial Cases • Business & Matrimonial Pool Valuation & Evaluation • Financial Consultancy

TEAM

Wan Yew Fai

CA (Singapore), CPA (Australia)

• Appointed Expert Witness in over 20 cases of litigation
• Case Consultant with numerous law firms over the past 20 years
• Provided Court-approved Valuations of multiple businesses
• Experience in managing a commercial business for 15 years
• Lectured in financial institutions of higher learning
• Asia-Pacific Regional Auditor for US Government USAID program

Edward Ta

FCA (Singapore)

• Regional Controller for Cargill – Managed 7 financial controllers
• Business Accounting and Compliance Systems Integration
• Oversaw Tax and Compliance issues in 6 countries
• Experience with cases involving financial claims litigation
• Profitable assessment, purchase and sale of international distressed assets

CASE EXPERIENCE

TDS vs TDT Divorce No. 4628 of 2011 and SGCA (2016)

Hired as expert to prepare three reports for wife’s side including rebuttals against another expert for a matrimonial case.
Selected quotes from the judgements:-
“The report given by Mr Wan Yew Fai of Strix Strategies Pte Ltd (“Strix report”) was sound and persuasive in pointing out the weaknesses in the report submitted (by the opposing expert)”. – Debbie Ong JC
“We find that the appropriate valuation … is the Strix report which valued BSPL at $830,849” – Court of Appeal – Judge of Appeal Andrew Phang, Judge Judith Prakash and Judge Quentin Loh Judge
As part of the case, valuations of five companies (involving also three immovable properties) in the matrimonial pool were made. Court of Appeal upheld Strix’s valuation of every company without exception and used these values as a basis to apportion he appropriate sum to the wife ($955,000) in the ancillary matters.
The four companies were:- APL - $2,139,853 BPL – $152,928 BSPL – $830,849 CPL – $42,073 DPL - $Nil

Husband’s expert valued APL as Nil because it made cumulative losses over the years but we noted that the losses made were not based on audited accounts and reconstructed the financials to show that if one takes into consideration supported, significant transactions (e.g. gain in sale of property) and disregard the questionable ones that was purposely made to reduce the assets of the company, the value would have been $2,139,853. The judge and the Court of Appeal accepted this value.
Husband also presented a case whereby the beneficial owner of a certain property was not BSPL but was himself through an inheritance from his father. However, our examination showed that not only was BSPL the registered holder, the company paid the mortgage against the property and therefore BSPL was both the legal and beneficial owner. The Court of Appeal used our valuation of the company at $830,349 and placed it into the matrimonial pool of assets. This sum included an adjustment for cost of the property and its increased market value from the time it was purchased.

WA22 NCC 278 07/2018 - Malaysian High Court

This case was tried in the Malaysian High Court. We were hired by a distributor to prepare a statement of monthly loss due to early termination by a principal. With early termination, the distributor suffered loss of profit. After trial and after being cross-examined by Skrine, The Malaysian High Court Judge Balan made a judgement in the favor of the distributor and accepted the calculations (without any exception or revision) by awarding a 3-month compensation based on the calculated net monthly loss.

To arrive at the potential loss, projections based on past years’ financials were prepared. And with the decrease sales volume, we identified specific expense categories that had to be adjusted so that a fair presentation of the situation would be made.

USA vs USB Divorce (Transferred) No 3278 of 2016 and (2020) SGCA 57

This case involved the divorce of a property agent wife who owned 17 properties and her husband who was a lawyer. The dispute centred on the value of the matrimonial properties and which of those should be considered a matrimonial or non-matrimonial asset. We were hired to examine and respond to the report issued by the wife’s expert.

We reported that the opposing side’s Accountant’s Report only presented a cashflow situation of the wife and transactions that led to her overdraft build up but did not address the main issue, that is, the valuation of the assets based on a net tangible asset (NTA) method. In the end, all calculations were made based on the NTA method.

Anonymous A (Discovery and Interrogatories)

Husband stated in his AOM that the matrimonial pool decreased because he made a $3 million investment as a 49% shareholder in an overseas resort. This was done through a company which owned the resort and this company used the funds for upgrading.Later, he stated that the resort could not open because the builder abandoned the project and cheated the company and therefore, his investment has been wiped out.

We made a special effort, travelled to this overseas location and did extensive searches on the company that owned the resort. As it turned out, in the entire duration, husband was never a registered shareholder of the company and his “investment” funds went directly to the director of this overseas company. Our trip report noted that the renovations were in full swing and the resort was almost completed. With fore-knowledge, we assisted the instructing lawyer in the discovery and interrogatories process by setting trap questions knowing what the opposing side would answer but also knowing that we have documentary proof that the answers provided would be untrue.

Anonymous B (Valuation and Trust Law)

Ex-husband intended to claim a share of the $2mil proceeds from an en-bloc sale by showing that his ex-wife was only holding the property for him in trust based on a trust agreement previously signed. Wife’s position was that while she signed the document, the terms of the trust agreement was broken.

The report provides evidence on how the cash contributions toward the property were all attributed to her. It also provided evidence of how she had frantically tried to source of funds to make mortgage payments when her ex-husband could not come up with the installments. In effect, our report refuted the trust document that the husband had prepared alleging that the wife was holding the property on trust for him. In the end no legal suit was filed.

Anonymous C (Fraud discovery and pursuit)

Assisted in a case whereby a family member who had control of the accounts was siphoning money off for herself, taking advantage of the founders who had placed trust in this accountant. The case led to an initial judgment sum of $4 million. Another judgment sum of $2 million was later secured against another family member in cahoots with her.

There was no report was necessary. Instead, we compiled and verified the fraudulent transactions to substantiate counsel’s Order 14 application which led to the judgement sums obtained. The case presentation showed numerous transactions where the supposed payee in the supporting documents differed from what was written on the payment voucher which also differed from what was written on the cheque. The account which the charges were supposed to be made was also different from the account that was actually charged to. This created a massive errors in accounting which made it very difficult to check and detect the fraudulent activities that were taking place.

Anonymous D (Discovery, Hidden Assets, Valuation and Working with Private Investigator)

Husband submitted that his net assets were $1.7million in his first AOM. After examining the underlying documents and re-valuing the list we arrived at a valuation between $2.5million to $4mil. The case was successfully mediated.

Private Investigator discovered that husband was collecting cash and closing the shutters for a business owned by his mistress. We arranged to purchase items from this shop and found that money was wired to a company that was owned by him thereby establishing the prima facie fact that although he was not the legal owner, he was the beneficial owner. This effort contributed toward the valuation increase in the matrimonial pool.

Anonymous E (Hidden Assets)

Husband is an expat in Singapore. Wife is in Europe and has filed for a divorce there. Husband submits that he has no financial resources and means to make payments to her and we conducted searches to find out about the assets he owns in Singapore. We found he has substantial wealth in Singapore and this information is now used in European courts to debunk the husband’s claims.

Through information obtained through searches and observations, we found that he owns two companies that collectively paid him dividends amounting to $3.8 mil. He in turn used a large part of it to pay the down payment an office space which he purchased for $7mil. This was information that foreign lawyers would find useful but for them, it is difficult to obtain and analyze.

Anonymous F (Siphoning of funds and Minority Oppression)

Client is a minority shareholder in a well-established bar and restaurant. He came to us expressing concern that he could not figure out why his F&B business was not doing well when the outlet had posted excellent sales figures. We made a very quick analysis and got back to him on the reasons, quantified them and he eventually decided settle the matter out of court as he realized that he should not continue a business with such partners.

Through financial analysis, market knowledge, observations and interviews with the client, we found that the majority shareholder owned a management company that charged this outlet exorbitant management fees. In addition, and probably more damaging, was the fact that promotional funds for liquor suppliers were taken by the management company and my client’s outlet never enjoyed these cash rebates no matter how much liquor they sold.

Anonymous G (Asset Dissipation)

Husband submitted Accountant’s Report that stated the financial position of the business that was jointly-owned with the wife. We analyzed it and realized it was depleted by $2mil of expenses without much basis.

Assisted Husband’s counsel to run a line of questioning that managed to convince the judge during cross-examination about how the accounts were not reliable. Judge spoke to the Husband and said “You know, I have some difficulty accepting your evidence here. Your own accountant has confirmed that you expended S$2mil in business expenses yet you say you only entertained your clients and friends at hawker centres. S$2m is many plates of Char Kway Teow and Coca-Cola, you know?” Eventually, the court made an award to the Wife amounting to $700,000.

Anonymous H (Inherittance and Business Valuation)

Mother bequeathed the company’s shares to Son but the value of company as reflected in the financial statements was low. We were granted access to the accounts in a room full of the company’s files and in 4 hours we found that substantial portions of income was not recorded. We reconstructed a range of possibilities and presented to the Son. However, Son decided not to proceed based on commercial reasons in that he did not want the rest of the inheritance to be put at risk to fight this case.

Even though there was no follow-up and the case did not go to trial, the Son at least could get closure on the matter and could make his decision based on a quantified analysis and not living the rest of his life thinking about the value he gave up.

Anonymous I (Minority Oppression and Round Tripping)

Client shared a family business with his siblings and disagreement surfaced when funds were given to other family members against his wishes. Eventually, client, the loudest protestor, found himself excluded from the business through a series of corporate actions. Other siblings who were in control engaged in several round tripping exercises thereby depleting client of his monetary assets. This case was mediated and settled.

Working with documents provided by client and the instructing solicitor, we managed to piece together the transactions that showed strong evidence of round tripping and a scheme to deplete client's resources. This led him to have a stronger hand going into mediation and eventually settled for a sum of about 20% more than what client thought he would get.

ASSOCIATES

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