Before going bankrupt in Japan last year, a Japanese company director parked US$90 million (S$124 million) in assets in three banks here. One bank account was in the name of his wife and son.
But in a ground-breaking case, Japanese debt-recovery officials succeeded last month in obtaining a Singapore High Court order to seize those assets hidden by Masahiko Nishiyama, 70.
Justice Woo Bih Li granted a declaration that the Japanese bankruptcy order, together with the Japanese court-appointed trustee in bankruptcy, Mr Hiroshi Morimoto, be recognised here.
The judge further ordered that the bank accounts and assets beneficially owned by Nishiyama, worth US$90 million in total, be vested in Mr Morimoto.
This is the first time a Singapore court has recognised a foreign trustee in the bankruptcy of an individual by a foreign court.
Lawyer Eugene Thuraisingam, who represented Mr Morimoto, argued: ” Recognition of the bankruptcy order would be aligned with the universalist approach to cross-border insolvency and it would be entirely sensible to assist in the bankruptcy proceedings initiated in Japan.”
When Nishiyama was made a bankrupt last year, the Japanese court tasked Mr Morimoto as his trustee-in-bankruptcy to administer all assets seized.
Nishimaya’s woes arose after he guaranteed several housing loan debts amounting to 43 billion yen (S$538 million), which the Resolution and Collection Corporation (RCC), a government-owned subsidiary of the Deposit Insurance Corporation of Japan, sought to salvage.
RCC sought to trace and recover his assets across several countries in a bid to recover the debts from failed housing firms.
The debts arose from 13 groups of loan and quasi-loan agreements made between RCC’s predecessor and Japanese company Pexim, between 1989 and 1992, that were underwritten by Nishiyama, according to court documents.
Kyoto-based Nishiyama was Pexim’s director from 1971 to 2003 and held some 16,850 firm shares worth 16.85 million yen. He was also president and chief financial officer for Pexim Inc Hawaii.
In 2012, a Kyoto court ordered him and Pexim, which was dissolved in 2004, to pay the outstanding loans, which stood at over 43 billion yen, including interest, last year.
It then emerged that Nishiyama had dissipated his assets on a massive scale. He is serving sentence after he was convicted by a Kyoto court last June of concealing assets for the purpose of thwarting RCC’s debt recovery.
Said Mr Thuraisingam: “This is relevant to explaining why there are assets belonging to Nishimaya in Singapore and why those assets are held through corporate entities or the joint names of his son and common-law wife.”
Among the four accounts in three banks seized here was a Credit Suisse account in the name Greatest Assets Ltd, a company incorporated in Samoa in September 2014 with Nishiyama as the sole beneficial owner.
Documents seized by the authorities showed he stashed millions abroad, including in Standard Chartered Bank, Bank Julius Baer and Credit Suisse accounts in Singapore, as well as other accounts in Hong Kong and Canada.
The case comes in the wake of moves here to develop the Judicial Insolvency Network, mooted last year by Chief Justice Sundaresh Menon, to promote cooperation in cross-border insolvency matters among different jurisdictions.