Former Khoo Teck Puat Hospital senior staff member investigated for alleged S$6 million embezzlement of goods

SINGAPORE:  A former senior staff member of Khoo Teck Puat Hospital (KTPH) is currently the subject of a police investigation for allegedly embezzling goods valued at a minimum of S$6 million (approximately US$4.36 million), including milk powder, and subsequently selling them to third parties over an eight-year period.

The Straits Times reported that the alleged misappropriation was uncovered in June 2022 when a vigilant member of the public alerted the National Healthcare Group (NHG) to suspicious activity involving the sale of milk products on the online marketplace Shopee.

These products were linked to Yishun Community Hospital (YCH) through their address labels.

Following this revelation, KTPH conducted an internal investigation, revealing that approximately S$5.5 million (around US$4 million) worth of goods, including milk powder, supplements, and underpad protectors, which had been funded by the hospital, had been removed from a YCH storeroom between 2014 and 2022.

These items collectively had an estimated retail value of at least S$6 million.

In September 2022, KTPH initiated a lawsuit against the former senior retail executive, Ray Choo Tiong Hian, in an attempt to recover the $6 million in losses it had incurred.

42-year-old Mr Choo had been employed by the hospital from February 2008 until his dismissal in June 2022.

Court documents filed by KTPH accused Mr Choo of either removing the hospital’s inventory himself or instructing other staff members to do so.

In any case, the hospital received no compensation for these goods. Additionally, KTPH obtained a Mareva injunction to freeze Mr Choo’s assets up to the value of $6 million.

Mareva injunction is a legal remedy used in civil litigation to prevent a party from dissipating or disposing of their assets during the course of a legal dispute.

In November of the same year, KTPH was granted a default judgment in the amount of S$5.6 million, along with interest, against Mr Choo for his breach of contractual and fiduciary duties.

Professor Chua Hong Choon, the CEO of KTPH, emphasized the hospital’s commitment to promptly reporting the incident to the police and the ongoing efforts to recover the misappropriated funds.

He stated that further details could not be disclosed due to the ongoing police investigation.

Professor Chua underscored the hospital’s zero-tolerance policy for staff misconduct and expressed disappointment in the actions of the former employee.

He also mentioned that an independent review of hospital operations had been commissioned by NHG to prevent such incidents from recurring.

According to KTPH’s statement of claim, Mr Choo was initially hired to establish Able Studio, a sub-unit of the hospital’s retail pharmacy department, specializing in medical products and accessories tailored to geriatric and rehabilitation needs, including milk powder and diapers.

Mr. Choo was responsible for designing Able Studio’s operational processes, inventory management, billing procedures, and annual inventory stocktakes.

The court documents outlined Mr Choo’s modus operandi, which involved informing the Able Studio team about supposed corporate orders from third-party buyers through verbal communication, emails, or WhatsApp messages.

He would then arrange for the delivery or collection of the relevant goods by these third-party buyers.

To facilitate his activities, Mr Choo accessed goods from YCH’s storeroom or ordered goods from the hospital’s supplier, subsequently recording the transactions manually.

He ensured that electronic stock records matched the physical inventory in the storeroom.

KTPH alleged that Mr Choo’s illicit activities included directing third-party buyers to pay him instead of the hospital and forging invoices using the hospital’s letterhead.

Given his senior role, Mr Choo had access to confidential information regarding suppliers, costs, retail prices, and the hospital’s inventory, granting him substantial decision-making authority.

This allowed him to act in his own interest at the expense of the hospital.

Mr Choo did not participate in a disciplinary inquiry held by KTPH on June 17, leading to the conclusion by the Board of Inquiry that he was guilty of misconduct, resulting in his immediate dismissal on the same day.