Singapore Courts Directors Duties Insolvency Founders

Can company directors be sent to jail even if they haven't been charged with crimes?


It might not be well known but the answer is sometimes 'yes'.

A few years back, one of the co-founders of the bankrupt cryptocurrency hedge fund, Three Arrows Capital, Zhu Su, was arrested at Changi Airport, in Singapore according to the Straits Times.


However, from reports on that topic, it was clear that Zhu Su was not accused of having committed any crime. Rather, his arrest and jail term of 4 months were because he was in contempt of court orders.

As part of the liquidation of Three Arrows Capital, Zhu Su was required to cooperate with the liquidators' investigations; for example, to answer questions posed by the liquidators or to provide relevant information and documents to them. This duty is often imposed on directors of companies that have gone into liquidation. Apparently, as a result of such failure by Zhu Su to provide information to the liquidators, the Courts of Singapore had held him to be in contempt of court and issued an order for him to be sent to jail.

So, to be clear, this was a civil case, and not a case where Zhu Su had been accused of having committed any crime or even any fraudulent conduct. This is a timely reminder to all of us who are directors of companies that should we ever face a situation where our companies go into liquidation, there is a duty to cooperate with any liquidators who are appointed and answer all questions within our abilities and knowledge. Failure to do this might lead to a contempt of court order and time in jail.