Legal

Magnets on MFMs: Trial ends with ten-month imprisonment term for Bunker Clerk of “Fragrance”

Mok’s offence affected public confidence in the use of the MFM system onboard Singapore bunker tankers, and caused an embarrassment to the MPA, said Deputy Public Prosecutors.

Published

5 years ago

September 11, 2020

Admin

A ten-day trial at the State Courts of Singapore ended on Thursday (10 September) with Mok Chek Meng, the bunker clerk of bunker tanker Fragrance, being sentenced to 10 months’ imprisonment.

This was the first trial under Section 7(1)(b) read with Section 10(1) of the Computer Misuse Act, Chapter 50A (CMA), involving a bunker clerk who directed his crew to use an industrial strength magnet to tamper with the mass flow meter (MFM) on board a bunker tanker in order to illegally tamper with the amount of marine fuel recorded as being delivered to a receiving vessel, a spokesperson from the Attorney-General’s Chambers told Manifold Times.

Mok’s offence was classified under the lower end of the medium culpability range, and sever harm category under a sentencing framework referenced from a related case.

He conspired with his subordinate, Nurharyadi, by instructing him to use an industrial strength magnet to modify the readings of the MFM System on board Singapore bunker tanker Fragrance while it was delivering marine fuel to the receiving vessel Southern Glory.

According to court documents, Mok was a qualified cargo officer employed with Ocean Xpress Services; he was also the key person giving instructions on the use of the magnet on board Fragrance.

Records showed Mok’s employer in Ocean Xpress Services earlier instructing all of his bunker clerks, including Mok, that they could use a magnet to increase the readings recorded on the MFM.

But after the police caught them using the magnet onboard the “Southernpec”, the employer instructed his bunker clerks, including Mok, not to use the magnets again. However, Mok was caught with the magnet on 13 June 2019.

Deputy Public Prosecutors noted Mok’s offence affected public confidence in the use of the MFM system onboard Singapore bunker tankers, and caused an embarrassment to the Maritime and Port Authority of Singapore (MPA).

They recommended the Court to impose a sufficiently deterrent sentence to send a strong signal to the industry that it would not tolerate any attempt, whether magnets or otherwise, to undermine the integrity of the MFM system.

The present offence is notoriously difficult to detect and could become rampant if not firmly dealt with, added the prosecution.

They also believed the offences likely involved other third parties who would purchase the surplus marine fuel from Mok.

“Deterrence is relevant in such crimes because the group dynamics suggest that premeditation, sophistication and planning was involved,” said the prosecution in their sentencing submissions.

“The fact that a syndicate is involved in tampering bunker barges in the open seas also makes the offence difficult to detect because there is no one who can scrutinise their conduct for compliance.”

Photo credit: Manifold Times
Published: 11 September, 2020

Legal

Helmsman on Inter-Pacific Petroleum legal battle: When ignorance meets fraud

Lester Ho, Associate Director of law firm Helmsman shared his timely key takeaways on the recent case of Goh Jin Hian against defunct Singapore bunker supplier Inter-Pacific Petroleum.

Published

23 hours ago

June 13, 2025

Admin

Lester Ho, Associate Director of multi-disciplinary law firm Helmsman LLC shared his timely key takeaways on the recent case of Goh Jin Hian v Inter-Pacific Petroleum when the Appellate Division of the High Court in Singapore overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses:

The collapse of a company often prompts a search for blame, especially where the downfall stems from deliberate misconduct such as fraud that appears avoidable in hindsight. Unsurprisingly, a company’s directors are frequently perceived as the root of the problem and become prime suspects in the inevitable witch hunt for accountability. The recent case of Goh Jin Hian v Inter-Pacific Petroleum Pte Ltd (in liquidation) [2025] SGHC(A) 7 is a timely reminder of a director’s duties as well as the legal risks in the event of breach.

The downfall of Inter-Pacific Petroleum Pte Ltd (“IPP”) is well-documented. The Maritime Port Authority of Singapore suspended IPP’s bunker craft operator licence after discovering that the mass flow meter of a bunker tanker chartered by IPP had been tampered with. Concerns raised by IPP’s banks in relation to its business led its non-executive director, Mr Goh Jin Hian, to discover that it was heavily indebted to the banks. It was also discovered that the facilities had been used on sham sale and purchase transactions.

IPP was subsequently placed in compulsory liquidation, and Mr Goh was sued for breach of his director’s duties. It was alleged that the sham transactions could have been prevented had Mr Goh discharged his duties and that he was therefore responsible for IPP’s losses. At first instance, the High Court found that Mr Goh had breached his duty of care and ordered him to compensate IPP for approximately US$146 million in losses (Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian [2024] SGHC 178). Among other things, the High Court found that Mr Goh was in breach because he was entirely ignorant of IPP’s cargo trading business.

The Appellate Division of the High Court upheld the finding that Mr Goh had breached his duty for having been unaware of IPP’s cargo trading business. However, it overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses. The Appellate Division found that IPP failed to prove that Mr Goh would have uncovered the sham transactions even if he had discharged his duty. Accordingly, Mr Goh was absolved of his liability to compensate IPP.

There are two broad takeaways from the decision.

The first takeaway is that every director, both executive and non-executive, is held to a minimum standard of care. This standard requires directors to take reasonable steps to put themselves in a position where they can guide and monitor the management of the company. Put simply, ignorance of a company’s business is no defence, even for non-executive directors that are not involved in everyday operations. Accordingly, although Mr Goh was a non-executive director, the fact that he was unaware that IPP was carrying on the business of cargo trading meant that he was in breach of his duties.

It may be surprising that a director could be entirely unaware of an important part of a company’s business. But the reality is that modern day companies have become commercial behemoths with complex and layered operations that makes it all too easy for directors (especially non-executive directors) to delegate oversight over critical business decisions and lose visibility of what their companies do. It is therefore important for directors, regardless of their formal titles, to ensure that there is a robust chain of reporting and command such that they have sufficient knowledge of the company’s operations to discharge their duties.

The second is that, while the law imposes high standards on directors, it does not demand unrealistic standards. As noted, the Appellate Division accepted that Mr Goh had breached his duties for having been unaware of IPP’s cargo trading business. However, it was not persuaded that, even if Mr Goh had discharged his duties and had been properly informed of IPP’s activities, the sham transactions could have been prevented. IPP was affected by what the Appellate Division considered a “deep-seated fraud” that had gone undetected even by IPP’s auditors. In the circumstances, it was far from clear that Mr Goh could have prevented the loss even if he had discharged his duty.

However, just because the law does not expect directors to be superhuman does mean that directors can afford to be complacent. Directors would still do well to take reasonable and diligent steps to ensure that they have a good grasp of the company’s operations and engage competent professionals (e.g., auditors) to help surface risks that they may otherwise miss. In a sense, Mr Goh avoided liability not because his breach was minor, but because the extent of the fraud perpetrated meant that the gravity of his breach cannot be said to have caused the loss. In other words, a less sophisticated or extensive fraud might have yielded a drastically different outcome – directors should take heed.

A timeline organised list of events preceding the current development of Inter-Pacific Petroleum has been recorded by Manifold Times below:

Photo credit: Helmsman
Published: 13 June, 2025

Biofuel

BIMCO subcommittee launched to develop bio bunker fuel clause for time charters

Newly formed subcommittee marks a proactive step toward addressing legal and operational challenges posed by the growing use of biofuels in shipping.

Published

5 days ago

June 9, 2025

Admin

International shipping association BIMCO on Wednesday (4 June) launched a new subcommittee to develop a Biofuel Clause for Time Charter Parties, marking a proactive step toward addressing the legal and operational challenges posed by the growing use of biofuels in shipping.

With regulatory frameworks like the EU ETS, FuelEU Maritime, and the upcoming IMO Net-zero Framework measures reshaping fuel strategies, biofuels are becoming an increasingly attractive option for reducing emissions. Yet, their integration into charter agreements remains complex, often raising questions around fuel quality, engine compatibility, and liability.

The newly formed subcommittee, comprising shipowners, charterers, P&I representatives and technical experts, met for the first time on 7 April 2025. Its work will focus on defining the scope and standards for biofuels, clarifying how they may be supplied and handled, and ensuring that their use aligns with performance expectations and regulatory obligations.

The clause will also consider the practical realities of biofuel use, such as blending with conventional fuels, onboard storage, and the implications for speed and consumption warranties. By addressing these issues, BIMCO aims to provide a flexible yet robust contractual solution that supports compliance without compromising vessel reliability.

A draft clause is expected to be presented at BIMCO’s Documentary Committee meeting in October 2025. Once adopted, it will offer much-needed clarity for charterers and owners navigating the transition to low-carbon operations.

Photo credit: BIMCO
Published: 9 June, 2025

Legal

Singapore: Ex-Director of Inter-Pacific Petroleum wins appeal against former company

Appellate Division of the High Court has found Dr Goh Jin Hian not liable to pay up to USD 146 million of the company’s total USD 156 million loss.

Published

1 week ago

June 6, 2025

Admin

The Appellate Division of the High Court on Thursday (5 June) has found a former Director of defunct Singapore bunker supplier Inter-Pacific Petroleum (IPP) not liable to pay up to USD 146 million of the company’s total USD 156 million loss.

The decision sets aside an earlier decision by the High Court that found Dr Goh Jin Hian responsible for the company’s financial loss.

The Appellate Division of the High Court found that even though it agreed that Dr Goh had breached his duty of care as a director, IPP has failed to show that his breach caused loss to the company.

In a judgment issued by the Appellate Division of the High Court, sighted by Manifold Times, it wrote: “While we agree with the Judge that Dr Goh had breached the Care Duty by reason of his ignorance of the cargo trading business, IPP has failed to show causation, ie, that the breach caused the loss in question.

“Also, we disagree with the Judge that the Care Duty was breached as regards the purported red flags. Finally, we find that Dr Goh did not breach the Creditor Duty in relation to the Cargo Drawdowns.”

The justices presiding the appeal were Tay Yong Kwang, Woo Bih Li and Kannan Ramesh.

IPP Judicial Managers (JMs) Deloitte Singapore, the plaintiffs, on April 2023 initiated a legal suit against Dr Goh, the defendant, suing him for over USD 156 million over losses due to alleged breach of his Director’s duties.

A timeline organised list of events preceding the current development of Inter-Pacific Petroleum has been recorded by Manifold Times below:

Photo credit: Manifold Times
Published: 6 June, 2025

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Manifold Times

Magnets on MFMs: Trial ends with ten-month imprisonment term for Bunker Clerk of “Fragrance”

Legal

Magnets on MFMs: Trial ends with ten-month imprisonment term for Bunker Clerk of “Fragrance”

Legal

Helmsman on Inter-Pacific Petroleum legal battle: When ignorance meets fraud

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BIMCO subcommittee launched to develop bio bunker fuel clause for time charters

Legal

Singapore: Ex-Director of Inter-Pacific Petroleum wins appeal against former company

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