Epson Claims Ex-Singapore Staff Defrauded Printer Maker With ‘Secret Fund’

Seiko Epson Corp. (6724) claimed three former employees in Singapore conspired with three suppliers to pay out funds based on fake or inflated bills, the printer maker’s lawyer said at the start of a trial in the city.

Part of the money was then kept in a “secret fund” used to provide unauthorized rebates to dealers and distributors, Epson’s lawyer Boey Swee Siang said at the Singapore High Court hearing today. Epson hasn’t determined the size of the fund, according to the lawsuit.

The alleged fraud allowed Epson’s former employees to get bonuses for meeting sales targets which they may not have otherwise met, according to the suit. The suppliers deducted fraudulent administrative costs for their role, according to the lawsuit.

Epson was also “unwittingly” made to fund the dealers’ purchases of the printer maker’s own products, which were then exported in breach of contract, Boey said.

Epson accused Felicia Gan, the former sales head of its Singapore operations, of being the “mastermind behind the rogue employees’ scheme,” according to the lawsuit. Gan conspired with former colleagues Kimberly Ong and Lawrence Tan to instruct the suppliers to issue the fake or inflated bills, Epson, based in Suwa, central Japan, said in the lawsuit.

Epson also sued S2 Computer Supplies Pte, Design Marketing Pte and Concept Alliance Asia Pte.

Gan’s lawyer, A Rajandran, declined to comment on ongoing litigation, as did Design and Marketing’s lawyer Kesavan Nair.

Ong and Tan will give evidence for Epson after agreeing to settle the lawsuit, according to Boey. S2 Computer has agreed to settle, the supplier’s lawyer Vinit Chhabra said, as has Concept Alliance Asia, according to its lawyer Sunil Singh Panoo. Settlement terms were not disclosed.

The cases are Epson Singapore Pte Ltd v S2 Computer Supplies Pte Ltd & Ors.. S569/2010, S542/2010 and S541/2010 in the Singapore High Court.

To contact the reporter on this story: Andrea Tan in Singapore at atan17@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.