Good faith wasn't enough to let these employees keep their millions in commissions
Singapore's Court of Appeal ruled on 22 June 2026, with Judge Kannan Ramesh writing, that employees must repay commissions paid on profits that never existed.
The case, Lau Lee Sheng and others v Envy Asset Management Pte Ltd (in liquidation) and others, grew out of the collapse of the Envy group, which the court described as a Ponzi scheme dressed up as a nickel trading business. Investors were told their money bought and resold metal at a profit. There was no trading, and the returns paid out were recycled from other investors' funds.
At the centre were a handful of employees who brought in investors and were rewarded with commissions, profit-sharing payments and referral fees. Mr Lau, a sales director, earned a basic salary of a few thousand dollars a month, as did a second sales director, a sales associate and a financial accountant. Their variable pay ran into the millions. It was common ground that all of them acted in good faith and had no idea the business was fraudulent.
When the companies were wound up, the liquidators moved to claw the payments back. The employees argued they had earned the money by doing their jobs and should keep it. The court disagreed on the bulk of it. Their contracts tied commissions and profit-sharing to the company turning a profit, and the employees said "profit" should mean declared profit. The court rejected that, holding profit meant actual profit. Since no real trading ever happened, none was made. Without profit there was no contractual duty to pay, so the court held that "these payments were gratuitous payments to employees and therefore constituted gifts" that could be reversed.
On that footing the court upheld recovery of roughly $17.3m from Mr Lau, $9.9m from the second sales director, $6.1m from the financial accountant and $4.9m in commissions from the sales associate. It also confirmed that around $909,473 the accountant had rolled straight back into the scheme could be recovered, since the company had still discharged its obligation to pay her before she reinvested. Her attempt to set off some $2,045,288 she had personally lost as an investor failed, because the recovered money was owed to creditors, not to the company. The employees also urged the court to use its discretion to spare them, arguing repayment would ruin them financially, but the court found they had offered no real evidence of that hardship.
The employees did win one point. The sales associate, Mr Koh, had received $49,582.70 in referral fees calculated on the sums his referred investors put in, not on any profit. Because the fee was promised simply for bringing investors through the door, the court found he had given real value for it. As counsel accepted, "Mr Koh had fulfilled his end of the bargain." The court set aside the order that he repay it.
The judgment makes clear that the distinction lay in what each payment was tied to. The commissions and profit-sharing turned on profit the company never made, so the court found there was no contractual obligation to pay them and no value given in return. The referral fees were calculated on the amount investors put in rather than on profit, and on that basis the court held the sales associate had given value and was entitled to keep them.
