J
Jiang Wei
Guest
Oct 13, 2010
Bankrupt loses CPF funds
By K. C. Vijayan
A high Court ruling has made clear that Central Provident Fund (CPF) monies bequeathed to a bankrupt by a deceased member stands to be seized. -- PHOTO: ST/MALCOLM MCLEOD
A HIGH Court ruling has made clear that Central Provident Fund (CPF) monies bequeathed to a bankrupt by a deceased member stands to be seized by the Official Assignee (OA) and distributed to creditors. The judgment came up in a test case when a former bankrupt, Madam Lim Lye Hiang, challenged the OA's move in court to take over about $102,000 in CPF monies and SingTel shares left to her by her late sister Lim Lye Keow.
Madam Lim was a bankrupt when her sister died of cancer in March 2008. Under the law, assets belonging to a bankrupt are held by the OA for distribution to the bankrupt's creditors. Hence, the CPF monies bequeathed to Madam Lim should have been transferred to the OA. But in this case, the dispute arose because the OA was not aware of the funds until after Madam Lim was discharged from bankruptcy last November.
According to the judgment grounds published yesterday, the OA had no record of any notification from the CPF Board, even though the latter said it had written to the OA on two occasions prior to Madam Lim's discharge from bankruptcy. The OA was alerted to the funds only in January this year, when it received a letter from the CPF Board seeking instructions for the transfer. The monies were transferred to the OA in March.
At issue before the court was whether the OA was entitled to distribute the monies to Madam Lim's creditors, because she was no longer a bankrupt by then. Madam Lim's lawyer Foo Soon Yien argued that since the actual transfer took place after she was no longer a bankrupt, the monies did not vest in the OA and could not be divided among her creditors.
