UNDISCHARGED BANKRUPTS LEAVING SINGAPORE WITHOUT PERMISSION

UNDISCHARGED BANKRUPTS LEAVING SINGAPORE WITHOUT PERMISSION

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(Prosecutions): **

23.

Dr Teo Ho Pin asked the Deputy Prime Minister and Minister for Law how many bankrupts were prosecuted for leaving Singapore without obtaining the Official Assignee's permission in the last three years and what measures are in place to prevent such cases.

Prof. Jayakumar: A bankrupt who travels or remains outside Singapore without the Official Assignee (OA)'s permission commits an offence under section 131(1)(b) of the Bankruptcy Act. In 2006, 77 bankrupts were prosecuted for unauthorised travel. The corresponding figures for 2005 and 2004 were 68 and 40.

Not all cases of unauthorised travel will result in prosecution. The OA considers relevant factors such as whether the bankrupt has travelled without permission before, the length of stay overseas, whether he has been generally cooperative with the OA, whether he has committed other offences, and so on, in deciding whether or not to prosecute the errant bankrupt. In appropriate cases, the OA may issue a warning in lieu of prosecution. Last year, 22 bankrupts were issued warnings. For 2005 and 2004, 21 and 6 warnings were issued respectively.

The main purpose of requiring a bankrupt to seek the OA's permission for overseas travel is to help the OA in the administration of the bankruptcy estate, and to prevent the bankrupt from hiding income earned or disposing his assets overseas. To check whether a bankrupt may have travelled without authorisation, the OA follows up on information received and routinely checks the passports of bankrupts.

The OA takes every case of unauthorised travel seriously. The OA has powers under section 116 of the Bankruptcy Act to detain the passport of a bankrupt or issue a direction to the Commissioner of the Immigration and Checkpoints Authority to prevent the bankrupt from going overseas. The OA can also take the errant bankrupt to task if he had concealed or improperly put his assets out of the OA's reach. As the OA's role is to ensure a fair and efficient administration of the bankrupt's affairs, he will not hesitate to take action against an errant bankrupt who frustrates this purpose.

With more than 24,000 bankrupts, the OA must take a targeted approach. In monitoring the conduct of bankrupts, he works closely with creditors and their lawyers, who have the greatest interest to monitor the bankrupt's conduct and who can provide him with the relevant information. He can detain a bankrupt's passport or ask the Commissioner, ICA to do so if the bankrupt, despite repeated attempts to contact him, refuses to respond to the OA; is uncooperative or is suspected of having committed an offence; or if the OA receives information that the bankrupt may attempt to travel without prior permission. In appropriate cases, the OA may also apply to the High Court for a warrant of arrest against a bankrupt or potential bankrupt if there are credible grounds for believing that he is a flight risk.

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Overall, the current system has worked well. The vast majority of bankrupts seek the OA's permission before they travel. Last year, the OA received some 34,000 applications for permission to travel, inclusive of repeat applications of which some 30,500 applications, which is about 90%, were approved. And while there are currently more than 24,000 bankrupts, only about 100 or 0.4% are taken to task annually for unauthorised travel.

Nevertheless, there is room for improvement. We will therefore implement the following measures. Firstly, the OA will help creditors and their lawyers to be more aware of the legal provisions in dealing with bankrupts and would-be bankrupts who are potential flight risks. Secondly, the OA will give early notification to potential bankrupts on travel restrictions that apply to bankrupts and the penalties for failing to comply with these restrictions. And thirdly, the OA will work with relevant agencies like the Courts to streamline current processes to expedite the transmission of information. I believe that these additional measures will strengthen the current system.

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