Escrow Account in Singapore
In the wake of millions of dollars going missing from an escrow account in Singapore under the watch of a law firm, the spotlight is once again on the measures in place to protect and ensure the accountability of client monies held by law firms. Is there any cause for concern?
2. What is Escrow Account?
An engineering company, Allied Technologies made a police report after it was informed that S$33.2 million from its escrow account held under an independent agent, JLC Advisors, may have been paid out under the unauthorised instruction of a senior lawyer. The senior lawyer has since gone missing.
Escrow account is meant to keep the money safe by an independent agent from the negotiating parties. The funds in the escrow account will be paid to the negotiating parties when a deal is finalised.
Escrow account is predominantly used in conveyancing transactions. Escrow arrangement and accounts can also be used for transactions including:
- Joint ventures
- Mergers and acquisitions
- Project financing
- Capital raising
- Litigation settlement
- Private equity investments
- Initial public offerings
Aside from lawyers, banks or commercial escrow agents can be used as escrow agents.
3. Eugene comments in TodayOnline
Eugene Thuraisingam offers some insights to TODAY:
Clients are not required to deposit monies with their lawyers in the provision of general legal services, although some do for the sake of convenience and efficiency.