Police investigating man for alleged cheating by using shell companies to avoid rent

The government has decided not to require personal guarantees from companies leasing residential properties, as it would limit flexibility and impose unnecessary burdens on legitimate transactions, according to Senior Minister of State for Law and Transport Murali Pillai.

However, Pillai emphasized that landlords should conduct due diligence before entering into tenancy agreements and that the government provides resources to assist them. He noted that all corporate transactions inherently involve some level of risk and that the government must strike a balanced approach in the law.

Murali explained that companies typically lease residential properties for legitimate reasons and that corporate entities are liable for rent payments, not their directors or shareholders. He stressed that the law does not permit companies to be used as a cover for fraud, and individuals involved can be held personally responsible for a company's debts if fraud is proven.

In the Kembangan rental dispute case, a company leased a property from elderly couples for S$7,500 a month, paying only one month's rent and half the deposit before defaulting. The company's director continued residing in the home with his family, who attempted to reclaim the property. The district court dismissed the company's application as an abuse of process and found that the director had deliberately schemed to rent the house without intent to pay rent, mirroring similar patterns in other tenancies.

The official receiver is investigating potential fraudulent trading and wrongful trading offenses, while the Accounting and Corporate Regulatory Authority (ACRA) is examining possible breaches of the Companies Act. Those found guilty could face up to 10 years in prison, fines, or caning or both.