Between April 2019 and November 2024, approximately S$14.25 million in interest was earned from investing funds held in the Companies Liquidation Account (CLA), despite legal requirements that such investments be made only upon request or consent from company liquidators.
According to the Auditor-General’s Office (AGO) report for Financial Year 2024/25 released on 9 September 2025, these funds were placed in fixed deposits under the Accountant-General’s Department’s Central Liquidity Management (CLM) framework.
The investments were made by the Insolvency and Public Trustee’s Office (IPTO), which operates under the Ministry of Law (MinLaw).
However, the AGO found that in many cases, liquidators had not requested or agreed to these investments, making the actions legally non-compliant based on existing provisions under the Insolvency, Restructuring and Dissolution Act 2018.
Legal requirement and AGO’s findings
Section 196(1) of the Insolvency, Restructuring and Dissolution Act 2018 permits a liquidator to invest surplus company funds with the Official Receiver, but only if a request or explicit consent is given.
Any interest from such investments is to be treated as part of the company’s assets.
Despite this, the AGO observed that all moneys in the CLA were automatically invested under the CLM framework once the account was brought under it in April 2019, with no mechanism to exclude unrequested funds from investment.
Consequently, funds belonging to companies under liquidation—where no investment request had been made—were still invested, and the resulting interest was credited not to the companies, but to the Consolidated Fund, which holds public monies.
The AGO estimated that S$14.25 million in interest was earned in this manner up to November 2024.
Ministry response and corrective measures
In response, MinLaw acknowledged the lapse, stating that it “takes the AGO’s observations seriously” and accepted that “explicit consent should be obtained from liquidators for the moneys to be invested”.
MinLaw clarified that while the investments had yielded higher returns than leaving the money idle in current accounts, the practice still violated legal conditions. It stressed that:
“There was no misuse of public funds and no losses arising from the fixed deposit investments, and no company undergoing compulsory liquidation was financially disadvantaged arising from this.”
Nevertheless, the ministry admitted that these funds should have remained in the CLA current account if no investment request was received.
Implementation of new framework
To prevent recurrence, MinLaw has implemented a new investment framework.
As of October 2025, funds in the CLA are no longer subject to automatic investment under the CLM framework unless the liquidator expressly requests it.
The ministry also stated that liquidators would be reminded of their ability to request investments for surplus funds, in line with the Insolvency Act.
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