Saturday, December 1, 2007

Missing lawyers

THE tally continues to rise. About $6 million may have gone missing together with lawyer Zulkifli Amin, who disappeared last week.

Police are now looking into how much of the missing money belonged to clients, among other things.

Mr Zulkifli, a lawyer of about seven years’ standing, skipped town last week.

His two other partners in the firm, Sadique Marican & ZM Amin, alerted the Law Society and the police.

Several clients also showed up at the firm’s office in Raffles City last week complaining of bounced cheques and stalled property deals.

While police investigations are ongoing, the Law Society has also moved in to examine the firm’s clients’ account.

The firm’s lawyers are also helping affected clients work out alternative arrangements.

The case has become a talking point in legal circles as it is the first since new rules came into force this year to protect clients’ money.

Among the new rules: two signatures are needed to withdraw sums higher than $30,000.

The rules kicked in after ex-lawyer David Rasif fled with more than $12 million of clients’ money last year.

But unlike Rasif, who had a one-man firm, Mr Zulkifli worked in a partnership, which means the remaining two partners may have to make good the loss.

There was a similar case about a decade ago when one lawyer faced a similar dilemma after his partner, Lim Yee Kai, made off with around $417,000 in clients’ money.

Lim is still on the run.

His partner ended up paying about $400,000 of a debt that soared to some $600,000 when legal and insurance costs were factored.

He could not keep up with the payments and was made a bankrupt in 2003.

But partners can be exempted from liability in some instances, said lawyer Manoj Nandwani. This can happen if they can show they were not aware of the fraud committed by a colleague or did not turn a blind eye to what was happening, he said.

Asked if the new rules needed more teeth in light of the latest incident, lawyer Montague Choy said: ‘You may change the rules… but then someone might show up to work around whatever’s new in place to the point where there are so many rules that it becomes not commercially viable to operate.

‘I do not think the problem is with the rules.’

Lawyer Amolat Singh said the case could trigger a move for clients’ deposits to be held by a separate stakeholder, rather than by lawyers.

‘We are the only profession required to hold such money, unlike doctors or accountants, who do not have to be part-time bankers.’

Source : Straits Times - 1 Dec 2007

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