SIA Scandal: How $35 million was stolen over 13 years
Reports by
Wong Wei Kong (Business Times 29 Mar 2004)
Teo Cheng Kiat was in charge of processing SIA cabin crew allowances. He used the names of crew members who did not fly on various flights to make false claims and channelled the payments to his own bank accounts. In all, he siphoned off almost $35 million over 13 years. Teo was caught and sentenced to 24 years in prison.
WHAT is now known as the SIA case of 2000 needs little introduction. It involves, after all, still the largest sum of money ever taken by an employee from a company. But the lessons from the case remains highly relevant today with the threat of fraud still posing a significant risk to companies.
The SIA case had all the hallmarks of a typical corporate fraud: a trusted, long-serving employee; superiors who failed to carry out proper checks; loop-holes in the system; and accidental discovery. In all, Teo Cheng Kiat, or Henry as he was also known, siphoned almost $35 million, a staggering amount. 'No matter how much you trust your employees, it is always important that internal control systems are implemented in the company to prevent and detect such fraudulent activities,' said James Teo, who led the Commercial Affairs Department (CAD) probe into the case.
SIA Complaint Sent To CAD

In January 2000, the CAD received a complaint from Singapore Airlines (SIA) that Teo Cheng Kiat, then 47, had misappropriated funds from the company. Teo had joined SIA as a clerk in 1975. He was promoted to supervisor of the cabin crew division in 1988. As supervisor, he oversaw the processing of cabin crew allowances.
The discovery of Teo's fraud was later described as 'purely fortuitous' in court. Had he quit while he was ahead, his crime may never have been discovered.
But on Jan 18, 2000, one staff member in SIA's internal audit department did an ad-hoc review of the data on the daily allowance payment for crew. Sorting the data for Jan 15, 1999, the employee discovered that three Overseas Union Bank (OUB) bank accounts had received 10 payments each on the same day. That was unusual, as there should only be one payment of allowance to any crew member on a particular day. And the three OUB accounts belonged to Teo. That prompted the SIA complaint to CAD.
Initially, it was not known how much money Teo had misappropriated when SIA first lodged a report at CAD on Jan 19, 2000. In the report, SIA complained that one of its staff may have committed criminal breach of trust (CBT) of about $2 million between December 1999 and Jan 15, 2000.