SINGAPORE Law and Practice Contributed by: Jansen Chow and Ang Leong Hao, Rajah & Tann Singapore
application is governed by the Rules of Court 2021. An order to attend court or to produce documents must be served personally within the timeframe stipulated in the Rules of Court 2021. If a witness disobeys an order to attend court or an order to produce docu - ments, the court has jurisdiction to enforce the order by committal. 3. Corporate Entities, Ultimate Beneficial Owners and Shareholders 3.1 Imposing Liability for Fraud on a Corporate Entity A company can be made liable for the acts of its direc - tors and officers through the doctrine of attribution. Under this doctrine, the company and its officers are still treated as distinct legal entities, but the acts and the states of mind of the officers are treated as those of the company. There are three types of rules of attri - bution. Firstly, there are primary rules of attribution found in the company’s constitution or implied by company law, which deem certain acts of certain natural per - sons to be the acts of the company. For instance, if the board of directors of a company is aware of acts committed by its employees or agents, knowledge of those acts could be attributed to the company. Secondly, there are general rules of attribution by which a natural person may have the acts of another attributed to them (ie, the principles of agency) and by which a natural person may be held liable for the acts of another, such as the principles of estoppel, ostensible authority and vicarious liability. Thirdly, there are special rules of attribution under which, although the primary and general rules of attribution are not applicable, the courts find that a substantive rule of law applies to the company. This would depend on the interpretation or construction of the relevant rule by which the person’s act or state of mind was, for the purpose of the rule, to be attributed to the company. In particular, the special rules of attribution operate differently depending on the factual matrix. In the case
of fraud, the courts have held that, while a company may be bound by the improper acts of its directors at the suit of an innocent third party, that rule of attri - bution should not apply where the company itself is bringing a claim against the directors for their breach of duty. 3.2 Claims Against Ultimate Beneficial Owners In certain exceptional circumstances, courts can look beyond a company’s separate legal personality and to those who stand behind it, ie, shareholders. This is typically referred to as “lifting the corporate veil”. One scenario in which the corporate veil can be lifted is when the relevant person uses the company as an instrument of fraud. A person who commits a wrong - doing through a company they control cannot evade responsibility by claiming that only the company and not themselves, should be held liable for the miscon - duct. The corporate veil can also be lifted where the com - pany is simply an alter ego of the fraudster – ie, where there is no distinction between the company and the fraudster and the company is simply carrying on the business of its controller. 3.3 Shareholders’ Claims Against Fraudulent Directors The general rule is that the proper claimant to bring a claim against fraudulent directors is the company itself. Shareholders are typically not allowed to sue on the company’s behalf, but can request the company’s board of directors to take action. The shareholders of the company may also attempt to oust the fraudulent directors by way of a shareholders’ resolution and then have the company bring claims against them. However, where the wrongdoers are themselves in control of the company and do not allow an action to be brought in the company’s name, the minority shareholders may consider seeking leave from the court to pursue a derivative action under either com - mon law or statute. Specifically, under Section 216A of the Companies Act 1967, the shareholder may apply to the court for
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