Singapore Airlines 2001 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2001 Singapore Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

Summarised Report on the Case of the Criminal Breach of Trust By Teo Cheng Kiat
1. Teo Cheng Kiat (Teo) was a Supervisor in the Cabin Crew Division (CCD) until his dismissal on 21 January 2000. His responsibilities
included administrative duties in the payment of Cabin Crew Allowances (CCA), in particular the Cabin Crew Meal & Overnight
Allowances (M&OA). CCA are computed by SIA’s Crew Rostering and Flight Tracking system (the CRAFT system). CCA payments
were made by electronic means from SIA’s Bank Account with Overseas Union Bank (OUB) into the respective bank accounts of the
individual cabin crew, also with OUB.
2. The computerised CRAFT system draws data from flight records and computes the amount of CCA (including M&OA) due to the
individual cabin crew. The system also hosts a Cabin Crew database, which includes the individual bank account numbers and other
personal particulars of the cabin crew.
3. By manipulating the CRAFT system, Teo misappropriated a total sum of S$34.96 million from SIA’s Bank Account.
4. Upon the discovery of Teo’s fraud, the SIA Board directed the Audit Committee to oversee the investigations. SIA promptly reported
the case to the Commercial Affairs Department (CAD) and with their assistance undertook immediate measures to investigate the
fraud, as well as to effect recovery of the misappropriated monies.
5. SIA also took immediate steps to change the procedures for paying crew allowances. Responsibility for maintaining Cabin Crew
bank accounts was segregated from Cabin Crew Division and now resides with an independent unit in Finance Division.
6. In January 2000, SIA commenced legal action against Teo, his wife and his two children. In February 2000, Teo’s sister-in-law was
joined as a defendant.
7. SIA obtained default judgement against Teo and consent judgement against his wife for the sum of S$34.96 million in March and
October 2000 respectively.
8. The Court made a consent order in October 2000 against his two children that the action be discontinued against them, upon
payment by his eldest son of the sums of US$20,000 and S$16,000 to SIA. The Court ordered his sister-in-law to deliver the #08-01
Birmingham Mansions property held in her joint names with his wife to SIA.
9. SIA appointed Arthur Andersen (AA) to investigate the circumstances surrounding the commission of the fraud, and to conduct a
full and independent review of SIA’s crew and staff payment procedures. AA has found no evidence that Teo carried out his
fraudulent activities with the assistance of any other SIA employee.
10. Arising from the review, SIA has taken a number of measures to tighten its internal controls. Independent consultants have been
engaged to review all systems designed to pay staff or vendors, as well as information technology security. A risk management
analysis has also been conducted independently.
58 SIA annual report 00/01
Addendum