Partner Suresh Divyanathan Obtains Unusual Singapore High Court Orders for Bank to Disclose Customer Accounts for Wirecard Case in Germany
Singapore newspaper, The Business Times, reported on 23 December 2021 that Oon & Bazul’s Dispute Resolution Partner, Suresh Divyanathan, successfully obtained orders from the Singapore High Court for Oversea-Chinese Banking Corporation Limited (“OCBC”) to disclose Citadelle Corporate Services Pte Ltd’s bank statements for use in legal proceedings in Germany concerning the Wirecard scandal.
Wirecard collapsed in June 2020 after admitting that 1.9 billion Euros in cash was missing from its books, creating one of the largest accounting scandals in recent years. Citadelle previously represented to Wirecard that they held millions of Euros in various accounts at Singapore bank OCBC on trust for Wirecard. To determine the truth of those representations, it was crucial for Wirecard’s insolvency administrator to obtain the bank statements of the aforesaid accounts. As Citadelle’s director, R Shanmugaratnam, has been charged with allegedly falsifying letters to Wirecard entities, Oon & Bazul took the unusual step of seeking the bank statements from the bank itself, instead of from Citadelle.
As Singapore is a well regarded banking secrecy jurisdiction, Partner Suresh Divyanathan and his team first had to apply to the Singapore High Court for orders that OCBC disclose the bank statements of its customer, Citadelle. Once that application was successful and the bank statements were disclosed, a second application had to be made for the bank statements to be used in legal proceedings in Germany to declare Wirecard’s previous financial statements as void. This second application was necessary because ordinarily, the disclosed bank statements cannot be used for legal proceedings outside Singapore.
The revelation of these bank statements marked a milestone in the insolvency administrator’s investigations into the Wirecard scandal and has been reported widely in the German press as well as in The Business Times on 23 December 2021.
Suresh was quoted as saying that applications for the disclosure of bank records such as the ones the insolvency administrator managed to obtain are “rare and difficult to succeed in, due to Singapore’s well-deserved reputation for upholding banking secrecy”. Notably, banks in Singapore are obliged under section 47 of the Banking Act not to disclose, in any way, customer information, and typically, banks in Singapore will not even confirm whether or not a person or entity has a bank account with them. Suresh added that nevertheless, the success of our applications does not “denigrate Singapore’s banking secrecy reputation” but instead shows that “in exceptional circumstances, banks in Singapore can be ordered to reveal customer information to third parties, if the interests of justice demand it”.
These successful applications made by Oon & Bazul can be said to set a precedent in two respects. First, it makes parties to litigation (and the public at large) more aware that despite Singapore’s banking secrecy policies, in rare circumstances, banks can be ordered to disclose information about their customers to third parties. Secondly, the applications also demonstrate the process and the test that must be met, before such applications against banks can be successful.
The key considerations in such applications against banks for their customers’ bank statements is whether the disclosure is necessary and just. Suresh and his team were able to persuade the Singapore High Court that given the circumstances of the Wirecard scandal, it was indeed necessary and just for OCBC to disclose their customer’s bank statements to Oon & Bazul and to allow Wirecard’s insolvency administrator to use the bank statements in the German Court proceedings.
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