Paying The Price For Securing Business Through Corrupt Means

Employees should not give or receive bribes in return for securing business contracts. Such practices create unfair competition and could drive up the cost of doing business. Individuals who engage in such corrupt acts will be dealt with under the law.

2. On 22 April 2021, Annamalai Arunachalam (“Arunachalam”), a 49-year-old Singaporean male, who was the Head of IT of Petro-Diamond Singapore Pte Ltd (“PDS”) at the material time, was sentenced to a S$7,500 fine and a S$3,000 penalty for corruptly accepting $3,000 from Palanivel Selvakumar (“Selvakumar”). Selvakumar, a 46-year-old Singaporean male, who was the Director of Sysnet Systems and Solutions Pte Ltd (“SSS”) at the material time, had given the gratification as a reward for Arunachalam awarding a PDS project to SSS. For his offence, Selvakumar was earlier sentenced to a fine of S$7,500 on 13 July 2020.

3. Investigations by the Corrupt Practices Investigation Bureau (CPIB) revealed that sometime in 2016, PDS decided to move its office operations and required IT assistance to supply and install IT infrastructure in its new office premises. SSS, an existing vendor of PDS, was one of the vendors who had submitted a quote for this project. When Arunachalam subsequently took over as PDS’ Head of IT in March 2016, one of his tasks was to review the different quotations and make recommendations to the Chief Financial Officer (CFO) of PDS. Arunachalam also took over as Selvakumar’s point of contact with PDS.

4. Subsequently, Selvakumar met Arunachalam to enquire about the status of the quotation to which Arunachalam informed that he was still assessing the quotations. Arunachalam also shared that he was undergoing a lot of stress at work and was disappointed that he did not receive a pay raise despite having to manage two portfolios as Head of IT and Head of Risk Management Systems. Selvakumar was concerned that Arunachalam would decide to step down as Head of IT or leave PDS, as he might not be able to maintain the same good relations between SSS and PDS if a new Head of IT replaced Arunachalam. Thus, he encouraged Arunachalam to remain as PDS’ Head of IT and suggested that SSS could offer him some form of “sales incentive” if SSS was awarded the project.

5. Arunachalam did not respond to Selvakumar’s offer at the meeting. However, following his review of the quotations received, Arunachalam did eventually recommend to his CFO that the PDS Office Project be awarded to SSS. SSS was awarded the project and eventually billed PDS a total of more than S$326,000 for the project. Subsequently, sometime between July and August 2016, Selvakumar gave Arunachalam S$3,000 as a token of appreciation for awarding the project to SSS, and the latter accepted the monies. Their acts of corruptly giving and accepting gratification as a reward for the awarding of the PDS Office Project to SSS constituted corruption offences and they were charged under Section 6(b) and 6(a) of the Prevention of Corruption Act respectively on 1 July 2020.

6. Singapore adopts a strict zero-tolerance approach towards corruption. Any person who is convicted of a corruption offence can be fined up to $100,000 or sentenced to imprisonment of up to 5 years or to both.

7. Companies are strongly advised to put in place robust procedures in areas such as procurement and internal audit to reduce the incidence of corruption. Guidance for companies on measures to prevent corruption can be found in PACT: A Practical Anti-Corruption Guide for Businesses in Singapore, which is available on CPIB’s website. Companies are also strongly encouraged to obtain certification under the Singapore Standard (SS) ISO 37001 – Anti-Bribery Management Systems, which is designed to help companies implement or enhance an anti-bribery management system to reduce corporate risk and reputational costs.

Reference Links:

• PACT: A Practical Anti-Corruption Guide for Businesses in Singapore
  

• SS ISO 37001

Corrupt Practices Investigation Bureau