Introduction — A Quiet Revolution in Plain Sight
In 2020, Singapore witnessed the collapse of Hin Leong Trading, one of Asia’s largest oil traders, with liabilities exceeding US$3.5 billion. What the subsequent insolvency proceedings, criminal prosecutions and civil litigation revealed was not merely the story of a dominant founder who concealed losses on a spectacular scale. It was a story about the limits of Singapore’s legal architecture — about how the corporate form, the audit process and the director accountability framework had all failed, in their different ways, to detect, prevent or provide timely recourse for fraud perpetrated behind the shield of separate legal personality.
The losses to Hin Leong’s 23 lender banks were catastrophic and largely irreversible by the time the legal machinery engaged. The corporate structure had functioned not as a legitimate organisational tool but as an instrument of concealment — precisely the kind of concealment that Lord Sumption warned against in Prest v Petrodel Resources when he distinguished between piercing the corporate veil and looking behind it to find the true facts.
The Corporate and Accounting Laws (Amendment) Act 2025 does not mention Hin Leong. It does not need to. But when you read its provisions carefully, particularly the new compelled director disclosure mechanism, the personal auditor naming requirement, and the expanded personal liability framework for directors of accounting firms — you are reading a legislative response to precisely the vulnerabilities that Hin Leong exposed.
And when you read those provisions through the lens of commercial litigation and corporate governance, you find something more interesting still. Singapore may have inadvertently created a regulatory mechanism that achieves functionally what its courts have been extremely reluctant to do doctrinally — reaching through the corporate veil to hold directors personally accountable for information, conduct and liability that the law of separate legal personality would ordinarily shield.
This is not a conspiracy. There is no evidence Parliament intended this outcome. But intention is irrelevant to consequence. And the consequences for litigators, directors, accounting professionals and corporate advisors are real and immediate.
The Fortress That Is Separate Legal Personality
To understand what the Act may have changed, we need to first appreciate what it is working against.
The principle of separate legal personality, that a company is a legal person distinct from its members and officers, is the foundational assumption of company law. Since Salomon v Salomon in 1897, the corporate form has operated as a legal shield. The company owns the assets. The company bears the liabilities. The directors and shareholders, however intimately involved in the company’s affairs, stand behind the veil.
Singapore courts have zealously protected this principle. The Court of Appeal’s treatment of veil-piercing doctrine has been notably conservative. Following the United Kingdom Supreme Court’s landmark decision in Prest v Petrodel Resources, Singapore courts have confined true veil-piercing to vanishingly narrow circumstances — essentially situations where the company was incorporated as a sham or facade with no genuine independent existence, or where an agency relationship can be implied between the company and its controllers.
Lord Sumption’s influential judgment in Prest drew a careful distinction between two concepts that are frequently conflated:
Piercing — which involves actually disregarding the separate legal personality of the company and treating its assets or liabilities as those of its controllers.
Concealment — which involves the court looking behind the corporate form not to displace separate personality but simply to ascertain the true facts that the corporate structure might otherwise obscure.
The concealment principle, as Lord Sumption characterised it, is really an evidentiary principle rather than a substantive legal doctrine. It says nothing more than this: the court will not allow the corporate form to be used as a mechanism to hide facts that are legally relevant to the rights of third parties.
Hin Leong was a concealment case in this precise sense. The corporate structure of Hin Leong Trading was not a sham. It was a real and substantial business. But it was used to conceal from auditors, lenders and regulators the true state of the company’s financial affairs. The concealment persisted until collapse because the legal mechanisms available to pierce through it operated only retrospectively, through insolvency examinations, criminal prosecutions and civil claims that engaged after the damage was done.
What the Corporate and Accounting Laws (Amendment) Act 2025 has done, without framing it in these terms, is to operationalise the concealment principle through a regulatory mechanism that sits entirely outside the courtroom and engages before collapse rather than after.
The Provision That Changes Everything
Section 2 of the Act amends section 39 of the Accounting and Corporate Regulatory Authority Act 2004. The amendment introduces a new section 39(1)(ba), which empowers ACRA to issue a written order directly to a director personally requiring that director to produce information, books, documents or extracts that are in the possession, knowledge, custody or control of the company.
Read that again carefully, because the significance is easy to miss.
ACRA is not ordering the company to produce its documents. ACRA is ordering the director, as an individual human being, to produce the company’s documents. The company as a legal entity is bypassed entirely. The separate legal personality of the company, which would ordinarily stand between a third party and the company’s internal information, is simply not engaged.
The new section 39(1A) goes further. The power to issue this written order includes the power to require the director to:
- Produce or grant access to the information
- Allow ACRA officers to inspect, copy or take extracts without fee
- Provide an explanation of the information
- State where the information is if it is not produced
- Produce the information in legible form if it is otherwise recorded
And section 39(7) provides a good faith safe harbour. A director who complies in good faith and with reasonable care bears no personal liability for doing so.
Cast your mind back to Hin Leong. The judicial managers and liquidators who took over that company spent considerable time and resources attempting to reconstruct what had happened to the company’s books, documents and financial records, being information that OK Lim and those around him had controlled and concealed. The tools available to them operated through the insolvency framework, engaging only after the company had collapsed and the losses had crystallised.
Section 39(1)(ba) moves the intervention point fundamentally earlier. It empowers ACRA to reach through to the director personally, the human being who actually controls the information, at the regulatory investigation stage, before insolvency, before collapse, before the losses become irreversible.
The practical architecture of this provision is striking. It treats the director not as an officer of a separate legal entity but as a natural person who has personal access to corporate information, which of course is exactly what a director is, whatever the legal fiction of separate personality might suggest. The law has simply decided, in this regulatory context, to deal with the human reality rather than the legal construct.
From ACRA to the Courtroom: The Informational Chain
The immediate objection to my thesis is an obvious one. Section 39(1)(ba) is an ACRA investigatory power. Its reach is limited to the regulatory relationship between ACRA and the director. It does not create disclosure obligations running to private litigants, creditors, or minority shareholders. It is a regulatory tool, not a litigation weapon.
This objection is technically correct and practically incomplete.
The reason it is incomplete is that information, once compelled into existence, does not stay where it was produced. Consider the chain of consequences that flows from a s.39(1)(ba) disclosure:
The Acknowledgment Problem
When a director complies with a s.39(1)(ba) order and produces company documents, that director has made a formal acknowledgment to a statutory regulator, in response to a legally binding order, that those documents were in their personal possession, knowledge, custody or control. That acknowledgment cannot be un-made. It exists on the record of ACRA’s regulatory proceedings.
In subsequent civil litigation, a plaintiff seeking third party discovery against that director can point to that acknowledgment as establishing precisely what the Rules of Court require for a third party discovery order — that the third party has or is likely to have in their possession documents relevant to the proceedings. The director cannot credibly claim those documents belong to the company and are outside their personal reach. They have already said otherwise, under compulsion, to a statutory authority.
This does not collapse the distinction between company and director. What it does is reduce the ability to rely on that distinction as a barrier to information.
In the Hin Leong context, this matters enormously. One of the central difficulties in the post-collapse proceedings was establishing what information directors other than OK Lim had access to and when. A s.39(1)(ba) regime operating during the period of concealment would have forced that question to the surface. Not through adversarial litigation but through regulatory compulsion, at a point when the answer might still have been actionable.
The Secondary Disclosure Channels
The amended section 42(1)(k) of the ACRA Act permits ACRA to share information with foreign audit regulators under approved arrangements. Information compelled from a director under s.39(1)(ba) can therefore travel beyond Singapore’s regulatory borders through entirely legitimate channels.
Domestically, once information enters regulatory proceedings, it may become accessible through:
- Court processes in enforcement actions brought by ACRA or the Attorney-General
- Insolvency proceedings under section 285 of the Insolvency, Restructuring and Dissolution Act 2018, where a liquidator can examine directors about the company’s affairs
- Mareva injunction proceedings where ancillary disclosure orders reach directors personally
- Applications under section 340 of the Companies Act in fraudulent trading claims, where a director’s personal knowledge of the company’s affairs is directly in issue
Each of these represents a legitimate procedural pathway through which information compelled by ACRA from a director personally finds its way into the hands of private parties who could never themselves have obtained it directly.
The Concealment Principle Made Real
This is where Lord Sumption’s concealment principle becomes operationally significant. The principle holds that courts will not allow the corporate form to conceal facts that are legally relevant to third parties’ rights. What s.39(1)(ba) does is break the concealment. Not through judicial intervention but through regulatory compulsion, and once the concealment is broken, the informational consequences flow outward through all the secondary channels described above.
The corporate veil has not been pierced. Separate legal personality has not been disregarded. The company’s assets remain the company’s assets. The company’s liabilities remain the company’s liabilities. But the informational protection that the corporate form provided, the ability of controllers to say “those are company matters, not mine”, has been punctured at the regulatory level in a way that has real downstream litigation consequences.
Hin Leong showed us what happens when that informational shelter persists until collapse. The Act has decided, quietly and without fanfare, that it should not be allowed to persist that long.
The Duty of Care Question: Caparo, Spandeck and the Auditor Naming Requirement
The director duties dimension of this Act cannot be properly analysed without engaging the question of to whom directors and auditors owe a duty of care, and on what basis that duty is established or denied.
The foundational case is Caparo Industries plc v Dickman [1990] UKHL 2 (“Caparo“), decided by the House of Lords in the specific context of auditor liability to third party investors. The facts are instructive. Caparo Industries purchased shares in a company relying on audited accounts that turned out to be materially misleading. Caparo sued the auditors in negligence. The House of Lords held that no duty of care existed because:
- The audit report was prepared for the company and its existing shareholders as a class — not for individual investors or potential acquirers
- There was insufficient proximity between the auditor and the specific third party claimant
- It was not fair just and reasonable to impose a duty given the indeterminate and potentially vast class of parties who might rely on audited accounts
Singapore’s own Spandeck Engineering v DSTA [2007] SGCA 37 (“Spandeck“) framework, being the governing test for duty of care in Singapore negligence law, is explicitly developed from and modelled on the Caparo approach. Spandeck reconfigures the Caparo three-part test into:
- A threshold requirement of factual foreseeability
- A first stage proximity analysis
- A second stage policy analysis that may negate a prima facie duty
The intellectual lineage therefore runs directly: Caparo → Spandeck → Singapore director and auditor liability. This is the correct analytical framework for the duty of care questions raised by these amendments — not a framework borrowed from clinical negligence in a different legal context altogether.
How S.59A Changes The Caparo Proximity Analysis
The new section 59A of the Accountants Act requires public accountants to state their full name personally in every auditor’s report they issue. Accounting entities must similarly name the specific individual public accountant responsible for the audit engagement.
This provision is easy to read as a transparency measure. It is more accurately read as a proximity-altering mechanism in the Caparo/Spandeck sense.
Under the original Caparo reasoning, auditors escaped liability to third party investors partly because the audit report was addressed to the company and its shareholders as a class — there was no specific identified individual auditor in a relationship of sufficient proximity with any particular third party relying on the accounts. The duty was owed to an indeterminate class and imposing liability to that class would open the floodgates in a manner the policy stage of Caparo and Spandeck would not permit.
Personal naming changes this. When a specific named individual public accountant signs an audit report, the proximity between that named individual and identifiable relying third parties (e.g. lenders with facility agreements, institutional investors, merger counterparties) arguably increases materially compared to an anonymous institutional firm signature.
Consider the Hin Leong lender syndicate. Twenty-three banks extended credit facilities to Hin Leong partly on the basis of audited financial statements. Under the pre-amendment regime, the audit report bore the firm’s name. Under the s.59A regime, it would bear the name of the individual public accountant responsible for the engagement.
Does personal naming automatically satisfy Caparo/Spandeck proximity for the benefit of those lenders? Not automatically. Proximity is a legal conclusion drawn from the totality of the relationship. It is not established by naming alone, though it moves the needle. It creates a factual foundation for a proximity argument that did not previously exist. And it removes one of the factual premises on which the Caparo denial of duty rested: the absence of a specific identified individual in a defined relationship with identified relying parties.
The Convergence of Liability Streams
In smaller accounting practices, which constitute the majority of Singapore’s accounting firm landscape, it is entirely common for the director of the accounting corporation to also be the public accountant responsible for audit engagements. Under the new regime, that individual faces a convergence of liability streams that did not previously operate simultaneously:
- Auditor liability to the company and potentially to third parties under the Caparo/Spandeck framework, now with enhanced proximity through personal naming
- Personal director liability under the expanded disciplinary grounds in amended s.52 of the Accountants Act
- Regulatory compellability as a director under s.39(1)(ba) of the ACRA Act
All three streams can arise from the same underlying facts: a negligent or fraudulent audit engagement conducted through a director-controlled accounting corporation. The Act has created a situation where a single named individual faces personal exposure across regulatory, disciplinary and tortious dimensions simultaneously.
This convergence is without clear precedent in Singapore law. It deserves to be named and analysed — not treated as an unintended side effect of administrative amendments.
The Reasonable Director Standard — A Three-Tiered Framework
Beyond the duty of care question, the Act’s multiple references to “reasonable steps” and “reasonable care”, in s.39(7), in amended s.52, and across the registration and renewal provisions of the Accountants Act, raise the question of what standard of conduct those phrases actually require of directors.
The answer is not straightforward, because directors as a class are not constituted as a profession in any meaningful legal sense. Any person of legal age and sound mind can be appointed a director in Singapore. There is no mandatory qualification, no accrediting body, no baseline competency standard. A director can be appointed with zero business, financial or governance experience.
This creates an immediate problem for the reasonable director standard: it must be calibrated to a role whose legal constitution imposes no minimum competency threshold. The more intellectually honest framework, which Singapore case law has not yet clearly articulated, is a three-tiered contextual reasonable person standard:
At the baseline, any director regardless of background should be held to the standard of a reasonable person who has accepted the responsibilities of directorship: someone who informs themselves of the company’s affairs, attends board meetings meaningfully, and escalates concerns rather than remaining passive. This requires no special expertise. It is a pure reasonable person standard.
At the intermediate level, a director appointed because of their specific expertise. For instance, a lawyer overseeing legal compliance, an accountant overseeing financial reporting, is held to the standard of a reasonable person with that expertise exercising it in that role. The question is not what a body of peers would do but what a reasonable competent person with that expertise would have done in the circumstances, which is a contextualised objective standard.
At the elevated level, a director of a regulated professional firm, for instance an accounting corporation specifically, is held to a higher standard still, because they operate in a licensed regulatory environment whose conduct affects public interest, not merely private parties. The amended s.52 expressly contemplates personal accountability at this level, and the AML/CFT/CPF compliance obligations add a further layer of regulatory sophistication that directors of accounting corporations are presumed to possess.
The Hin Leong proceedings illustrated the consequences of the gap between what each of these tiers requires and what was actually delivered. OK Lim’s conduct was egregious at every tier. But the conduct of other directors — those who were present, attending board meetings, receiving information — and whether they met even the baseline tier of the reasonable director standard, remains a question that the legal proceedings engaged with less fully than it deserved.
The Act’s expanded personal liability provisions narrow that gap going forward. The three-tiered framework proposed here provides the analytical structure within which the narrowing can be understood and applied.
The Causation Puzzle
Even where a duty of care is established and a breach identified, negligence claims face the further hurdle of causation. The director liability scenarios created by this Act throw up causation puzzles that deserve attention.
The standard but-for test — would the loss have occurred but for the defendant’s breach — operates straightforwardly in simple two-party scenarios. Director liability cases are rarely simple.
The Collective Board Problem
Where a board collectively fails to take reasonable steps to prevent regulatory non-compliance, the but-for test struggles. If multiple directors all failed, would the company’s loss have been avoided but for any one director’s breach? Each individual director can point to the others and argue that their individual breach was not causative because the remaining board would have made the same decision regardless.
The expanded personal liability provisions in the amended s.52 — by focusing on what the individual director specifically failed to do — actually help resolve this problem in favour of plaintiffs. Where a director is specifically responsible for a compliance function and failed in it, causation can be isolated against that director rather than diffused across the board collectively.
Hin Leong again provides the illustration. The dominant mind problem — where one individual exercises such overwhelming control that other directors are effectively passive — creates particular causation difficulties for plaintiffs seeking to hold non-dominant directors liable. The three-tiered reasonable director standard addresses this by imposing a baseline obligation on every director regardless of their relationship to the dominant mind. A director who met none of the baseline obligations cannot argue that the dominant mind’s conduct broke the causal chain.
The Novus Actus Problem
In the compelled disclosure scenario — where a director produces company documents to ACRA under s.39(1)(ba) and the company subsequently suffers loss — the causal chain runs through ACRA’s own use of that information. ACRA’s decision about what to do with the disclosed information is an intervening act. A director facing a negligence claim from the company for having complied with an ACRA order could mount a credible novus actus interveniens argument — that ACRA’s subsequent conduct broke the causal chain between the director’s disclosure and the company’s loss.
This interacts with the good faith safe harbour in s.39(7). If the safe harbour negates liability entirely for good faith compliance, the novus actus argument may be unnecessary. But the safe harbour only protects directors who comply. A director who refuses to comply with a s.39(1)(ba) order — and thereby exposes the company to regulatory sanction — cannot rely on the safe harbour and faces a cleaner causation argument against them.
The Spandeck Policy Stage and Indeterminate Liability
At the second stage of the Spandeck analysis — where policy considerations may negate a prima facie duty — the concern about indeterminate liability to an indeterminate class looms large. This was central to Caparo’s reasoning and remains central to Spandeck.
This article’s thesis — that s.39(1)(ba) creates an informational chain reaching third parties through secondary channels — engages this policy concern directly. A director might argue at the Spandeck policy stage that imposing civil liability to an indeterminate class of third parties for regulatory disclosures made under statutory compulsion would be contrary to the legislative intent of the s.39(7) safe harbour and inconsistent with the Caparo policy against indeterminate liability.
This is a sophisticated argument that cuts both ways. It may protect directors in some circumstances. But it also highlights the tension at the heart of the Act’s architecture — between expanding personal director accountability and maintaining the policy against indeterminate liability that both Caparo and Spandeck embody. That tension has not been resolved by the Act. It has been created by it. The courts will eventually be required to address it.
What This Means in Practice
For practitioners advising directors, accounting professionals and corporate groups, the practical implications of reading these amendments together are significant.
For directors of accounting corporations and accounting firms, the combination of expanded personal liability under s.52, the personal compellability under s.39(1)(ba), the elevated reasonable person standard applicable to directors of regulated professional firms, and the personal naming requirement under s.59A means that the traditional comfort of the corporate structure offers considerably less protection than it once did. Directors need to actively document their governance conduct — not just at board level but in their individual capacities. The Hin Leong lesson — that passive presence on a board is not a defence — is now embedded in the statutory framework in a way it was not before.
For commercial litigators, the s.39(1)(ba) disclosure mechanism represents an underappreciated evidentiary resource. Where a client is involved in a dispute with a company whose directors have been or are likely to be subject to ACRA regulatory investigation, the information compelled through that process may be accessible through secondary channels in civil proceedings. This deserves to be part of litigation strategy from the outset — not an afterthought discovered when discovery has already closed.
For corporate finance advisors, the striking-off and restoration reforms — including the new six-year court-based restoration window under s.344CA — change the due diligence landscape. Struck-off entities are no longer necessarily dead ends in M&A investigations. And the real-time electronic notification requirements mean that dissolution events are harder to miss and harder to exploit through information asymmetry.
For family trust-owned corporate and professional structures — of which accounting firms are a common example — the combination of expanded personal director liability, the AML/CFT/CPF compliance obligations, and the auditor personal naming requirements in new s.59A create a compliance burden that falls not just on the firm entity but on the individuals who govern it. Beneficial ownership through a trust does not insulate those individuals from personal regulatory and legal exposure. The trust owns the firm. The directors run it. And it is the directors — named, personally compellable, and personally accountable — who now bear the consequences of how it is run.
Conclusion — The Question Parliament Did Not Ask
Singapore has one of the most sophisticated corporate law regimes in the world. Its courts have been careful and principled in their treatment of separate legal personality. The reluctance to pierce the corporate veil reflects a considered policy judgment — that the certainty and predictability of the corporate form is worth protecting even at the cost of occasionally allowing wrongdoers to shelter behind it.
But legislation does not always achieve only what it intends. And sometimes what it inadvertently achieves is more significant than what it set out to do.
The Corporate and Accounting Laws (Amendment) Act 2025, read in isolation provision by provision, is a sensible and measured piece of regulatory housekeeping. Read as a whole — and read against the backdrop of Hin Leong, the Caparo proximity analysis, the Spandeck framework, and the developing law of director accountability — it is something more consequential.
It has created a set of mechanisms that collectively achieve through regulatory compulsion, informational chains, personal naming and expanded personal liability much of what veil-piercing would achieve through judicial doctrine. The corporate veil remains legally intact. Separate legal personality is not displaced. But the informational shelter that the corporate form has historically provided — the ability of those behind the veil to say that company information is company information and not their personal concern — has been materially eroded.
Whether this is desirable is a legitimate question. There is a strong argument that the corporate veil has been over-protected in Singapore, and that the Hin Leong catastrophe — in which the informational shelter of the corporate form was exploited to devastating effect — justifies a legislative recalibration. The personal naming requirement for auditors in s.59A, the compelled director disclosure mechanism in s.39(1)(ba), and the expanded personal liability provisions in amended s.52 can all be read as components of that recalibration.
But desirable or not, the development should be conscious and deliberate rather than inadvertent. Litigators, regulators and legislators need to be asking — and answering — the question that this Act has implicitly raised:
If we are comfortable with regulatory mechanisms that achieve the functional equivalent of veil-piercing, should we not also be revisiting the judicial doctrine itself? And if we are not comfortable with that outcome, have we thought carefully enough about what we have enacted?
These are not merely academic questions. They will be answered — not in Parliament, but in courtrooms, in regulatory proceedings, and in the offices of advisors who are already working through what these amendments mean for the clients they serve.
Hin Leong taught Singapore what happens when the informational shelter of the corporate form is allowed to persist until collapse. This Act has quietly decided that it should not be allowed to persist that long. The full consequences of that decision — for corporate law doctrine, for director accountability and for the balance between regulatory power and private rights — remain to be worked out.
The veil has not been pierced. But it has been punctured. And punctures, left unattended, have a way of becoming tears.
This article is written in the author’s personal capacity for discussion purposes only. It does not constitute legal advice. Readers should seek independent legal advice specific to their circumstances before acting on any matter discussed herein. The author accepts no liability for reliance on the contents of this article.
