Singapore: the duty to maintain a system of internal accounting control

The Court of Appeal gave judgment in Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2011] SGCA 22 earlier this month: see here. This is an important decision on the law of agency, with much analysis of the English Court of Appeal's decision First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194, The Independent, 19 April 1993. Section 199(2A) of Singapore's Companies Act was briefly considered; this provision requires public companies (and their subsidiaries) to maintain a system of internal accounting control in order, amongst other things, to safeguard assets and ensure that transactions are properly authorised. The court held that no common law duty arose under Section 199(2A) and that it had been enacted "to safeguard the assets of a company and, hence, was enacted for the company's benefit, and not for the benefit of any third party who might deal with the company's officers and employees" (para. [98]).