Thumb drive inventor Henn Tan jailed for inflating Trek 2000's books

Henn Tan, the founder of Trek 2000 International — the Singapore mainboard company credited with inventing the thumb drive — was sentenced in October 2022 to one year and four months' jail after pleading guilty to five charges of conspiring to falsify accounts, forge documents and cheat external auditors, with four similar charges taken into consideration.

The fraud ran long before the discovery. From 2006 to 2011 Tan conspired with then-CFO Gurcharan Singh to falsify licensing income — inflating it 11 per cent in 2011, and by 2015 to 666 per cent of actual earnings. When FY2015 looked dismal, Tan and senior officers invented a US$3.2 million sale with false documents; when EY questioned it, they tried to pass the sale off as genuine. EY found the bank documents forged, imaged the accused's laptops, uncovered fictitious deals back to 2013, and reported the matter to the regulator before disclaiming its FY2015 opinion.

The cover-ups compounded: when auditors suspected something was wrong, Tan took a massive loan from JP Morgan and shuffled it through multiple accounts to simulate received payments, the prosecutor said. Tan had previously been fined $80,000 for negligently failing to disclose US$10.5 million of transactions, and quit as CEO in 2018 after the Singapore Exchange objected to his staying on — remaining chairman emeritus until 2020, with his son Wayne serving as deputy chairman.

Licensing income — the line hardest for outsiders to verify — was the fraud vehicle, and grew more inflated as the company weakened.

Forged bank documents were used to answer auditor questions, converting an accounting misstatement into forgery and cheating.

The JP Morgan loan routed through multiple accounts manufactured the appearance of customer receipts.

Governance failed at the top: the founder remained in control of a listed company even after a prior disclosure conviction.

A founder who owns the most stock has the most reason to fake the numbers — and audit committees must treat the founder's own accounts as the highest-risk line.

Tan received 16 months; former executive director Poo Teng Pin was sentenced to nine months, while the cases against CFO Gurcharan Singh and former regional sales president Foo Kok Wah were still pending. EY's disclaimer of opinion left Trek 2000's FY2015 accounts formally unauditable, and the inventor of the thumb drive left the company's leadership with his son installed as deputy chairman.