SINGAPORE – Two former directors of a firm linked to a Ponzi scheme were found guilty on Thursday of carrying on a fraudulent business, an offence under the Companies Act.

At the time of the offences, Singaporean Iseli Rudolf James Maitland, 63, and Malaysian How Soo Feng, 48, were directors of The Gold Label (TGL), which sold gold to more than 2,000 customers under a “buyback” arrangement, bringing in revenue totalling more than $120 million.

TGL has since wound up.

In January this year, the third former director Wong Kwan Sing, then 50, was sentenced to two years and 10 months’ jail after pleading guilty to an offence under the Companies Act.

The court heard that Maitland and How were directors and shareholders of TGL from July 7, 2009, to Nov 15, 2010.

In their submissions, Deputy Public Prosecutors Kevin Yong, Edwin Soh, Grace Teo and Ong Xin Jie said the firm had no investment activities and relied on sales of new contracts under the buyback scheme to repay its obligations under the older contracts.

The cycle continued until TGL was unable to sell new contracts and the business broke down.

Its payout and buyback obligations to clients came up to more than $85 million, while the company had just over $450,000 in its bank accounts as at Oct 7, 2010.

The prosecutors told District Judge Ng Peng Hong that Maitland and How had profited handsomely from the fraudulent gold buyback business.

More than $1.2 million in directors’ fees had been paid between July 2009 and June 2010.

The DPPs said: “The more gold buyback contracts TGL sold, the more the accused persons earned… it is because of such personal greed that the accused persons continued with TGL’s operations, despite the overwhelming evidence that they knew there was no profit-generating formula.”

The Straits Times had reported in January that Wong, a Malaysian, who is also known as “Gary”, had pocketed at least $598,000 from the scheme.

Maitland was represented by lawyers Adrian Wee and Lynette Chang from Characterist law firm.

Lawyers from Withers KhattarWong – Mr Shashi Nathan, Mr Jeremy Mark Pereira and Ms J. Jayaletchmi – represented How.

During the trial, the pair had claimed that they were unaware that TGL was operating a financially unsustainable business.