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

The government will not mandate personal guarantees for corporate residential tenancies, as "a blanket mandatory rule" would take away flexibility, restrict genuine arrangements and "impose unnecessary burdens on legitimate transactions", said Senior Minister of State for Law and Transport, Murali Pillai, on Nov. 4. "At the same time, imposing such a requirement might not stop someone determined to cheat, who could appoint a director with no assets to give the guarantee", said Murali. "All commercial transactions involve some level of risk, so we encourage landlords to conduct due diligence before entering into a tenancy, and there are resources to help them." Murali was fielding questions in parliament posed by Members of Parliament (MPs) from both sides of the House on safeguards and protections for landlords against tenants, citing the Kembangan rental dispute. Murali concluded: "While the plight of the elderly landlords in this case deserve our sympathy", the government "must be responsible and strike a coherent balance in the law". Questions posed Before the parliamentary questions were asked, Speaker of Parliament Seah Kian Peng said he wanted to highlight that the questions are related to the case of Noranth Ventures Pte. Ltd. versus Loo Kin Ben & Anor that may be pending in court, advising members to exercise caution. People's Action Party (PAP) MP for Yio Chu Kang, Yip Hon Weng, asked whether the government will consider legislative measures to hold directors personally liable or mandate personal guarantees for corporate residential tenancies and what legal safeguards will prevent exploitation of corporate structures to delay eviction and property recovery. Workers' Party (WP) MP for Aljunied, Fadli Fawzi, also questioned whether the government will consider introducing legislative measures to afford greater protection to landlords against tenants who enter into tenancy agreements with no intention of paying rent. Law does not allow companies to be used as cover for fraud In response, Murali explained how companies lease residential properties for legitimate reasons and noted that when a company signs a lease, it is liable for the rent and not its directors or shareholders. He called it a "fundamental principle of company law, and it facilitates the conduct of business." "However, the law does not allow companies to be used as a cover for fraud, or allow the individuals who set up the companies to evade responsibilities." Besides possible criminal penalties, those involved can be made personally responsible for the company's debts, Murali added. Murali noted that where the court finds fraudulent or wrongful trading, "the court can disregard the corporate form where it is abused for an improper purpose." Hence, Murali said the law already provides safeguards and that "landlords are already free to require personal guarantees from directors or other individuals before leasing their properties to companies". He added that landlords can decide whether to do so based on their assessment of risks of each tenancy. The ongoing Kembangan case in question Murali began by highlighting, "As the court proceedings are ongoing, I will confine my comments on the case to what is in the judgement, and then set out what the authorities are doing." In the Kembangan case, a company leased a house from an elderly couple for S$7,500 a month, paying rent for only one month and half the deposit before stopping payments. He said that one of the company's directors continued living in the home with his family, and when the family tried to take back their home, his company applied to the court to stop them. The district court later dismissed the company's application as a plain abuse of process and found that the man had allegedly devised a deliberate scheme to rent the house with no intention of paying rent, following a similar pattern in other tenancies. "The official receiver is also investigating possible fraudulent trading and wrongful trading offences, and the Accounting and Corporate Regulatory Authority (ACRA) is also looking into potential breaches of the Companies Act by the relevant entities and individuals." The official receiver is a public officer appointed by the High Court, whose role includes investigating wrongful trading offences, acting as liquidator in compulsory winding-up cases, and overseeing private liquidators. Those found guilty may face a sentence of 10 years' jail, a fine, or caning or both. “As investigations are ongoing. I will not say more. Nothing I have said should be taken as a view on whether an offence has been committed,” Murali said. According to the Judiciary's website, the next case conference for the case is on Nov. 11, 2026. Resources for landlords Murali pointed to resources for landlords, including a checklist published by the Council for Estate Agencies on residential rental transactions. The checklist for renting to a corporate tenant also includes verifying the company's registration details with ACRA. Murali also highlighted the Distress Act where landlords can go to court without notice to claim for errors in rent for subsisting tenancies for expedited proceedings for recovery of arrears in rent. "The burden on us on this side of the house in government is to go beyond expressing sympathies to these two groups of people... and see whatever policies we implement in favour of one would not unduly burden the other." Murali concluded, saying the government will continue regularly reviewing the law and make adjustments where needed.