SINGAPORE: A well-known venture capitalist on Friday (Apr 4) described how he came to trust alleged fraudster Ng Yu Zhi enough to put millions into a nickel investment scheme said to be a massive fraud.
Dr Finian Tan said the trust he placed in Ng, 37, was in part because Ng himself had invested in Vickers Capital Group (VCG) – of which Dr Tan was chairman – and one of its funds.
Dr Tan is the founder and chairman of Vickers Venture Partners, a global venture capital firm wholly-owned by VCG.
“He invested in us with no requirement at all, he never said ‘Oh I invest in you, can you invest in me?’
“He never solicited anything, he never asked me to invest, he just invested in us because he liked what we did,” said Dr Tan during the second day of his testimony in Ng’s trial.
Ng is contesting 42 charges: 15 counts of forgery, 14 counts of handling benefits from criminal conduct, 10 counts of cheating, two counts of fraudulent trading and one count of criminal breach of trust.
He is said to have duped 947 investors of almost S$1.5 billion (US$1.12 billion) through an elaborate scheme offering investors profits from the purported sale of physical nickel from 2016 to 2021.
Through his companies Envy Global Trading (EGT) and Envy Asset Management, Ng allegedly deceived investors that he was buying nickel at a discount and selling it for profit.
Prosecutors are saying that there was no underlying physical nickel trading activity, and investors were instead paid with money invested by other investors.
Dr Tan is said to be one of the victims who invested millions into Ng’s scheme.
NG’S “AMAZING ACT”
Even before entering the contract, Dr Tan said he had spoken to other investors about their experience and received positive feedback. These people told him that they could withdraw their money on time.
Dr Tan also described how he had connected with Ng socially, as both had met each other’s wife and children, and visited each other’s homes.
“And very often when I was with him, he was checking nickel prices,” said Dr Tan, who described how Ng had even told him about a hurricane in Australia that purportedly occurred when his cargo was being loaded.
After the loading was completed, the two gave each other a “high-five”, Dr Tan said.
“It was an amazing act, knowing what I know now. Obviously at the time I took everything as bona fide, but he gained a lot of my trust,” said Dr Tan.
He repeated how Ng himself was an investor in VCG, but had never solicited for investments in return.
DR TAN’S CONTRACTS WITH EGT
Dr Tan put a total of US$19.2 million into the nickel investment scheme over three contracts between October 2020 and January 2021.
He was promised returns of about 17 per cent for the first two contracts and about 15 per cent for the third. These contracts appeared “consistent” with what Ng had told him, with “nothing untoward”, Dr Tan said.
“Everything checked out and it was nothing surprising. And don’t forget he is also an investor of mine and he invested in the group, there was an element of trust,” said Dr Tan.
The court heard previously that Ng had committed to investing US$5 million in a Vickers fund, and another US$24 million – comprising US$13 million from Ng and the rest from six others – into VCG.
Of the US$19.2 million that was invested into the nickel scheme, about US$15.5 million belonged to Dr Tan while a shareholder invested about US$2 million.
Vickers staff who learned about the scheme from Dr Tan invested US$1 million, and about US$500,000 came from other partners.
Subsequently, at Dr Tan’s suggestion, two Vickers funds separately injected US$14.1 million into the nickel investment scheme through FinComm Group, an investment vehicle.
FinComm Group had two contracts with EGT in December 2020 and January 2021. These details form one of the charges against Ng.
Dr Tan was adamant that he would not have invested with EGT if the scheme lacked a supplier, buyers, or nickel.
“If there were any changes to the contract or deal in any shape or form, we must reassess (the risks and rewards to be had), however minute, and not having nickel at all is so major I can’t even describe it,” he said.
