S. Gandaruban, 59, is accused of conspiring with his younger brother, Mr Moganaruban Subramaniam, and wife Renuga Sinnaduray to cheat the firms between February 1988 and May 5, 1989.

Both Mr Moganaruban, 56, a prominent Ceylon Tamil community leader, and Madam Renuga have been dealt with in the scam. Mr Moganaruban's 16-month sentence was increased by another 10 months after he appealed to the High Court in 2005. Madam Renuga was jailed 12 months in 2004.

Gandaruban, together with his co-conspirators, is said to have deceived Insurance Corporation of Singapore into paying out $98,295 to his wife on a whole life insurance policy on May 5, 1989.

He is also accused of deceiving NTUC Income into paying out his special endowment plan of $32,214, and Asia Life Assurance Society into paying $200,832 to his wife, now 50.

A fourth charge states that he instigated his wife to lie to a commissioner of oaths at Supreme Court on Aug 2, 1988 that he died intestate.

Gandaruban abandoned his family and fled to Sri Lanka in 1987 to escape creditors after his car rental business collapsed.

A few months later, he arranged for a death certificate to be sent to Singapore stating that he had been killed during a gun fight between government leaders and Tamil Tiger rebels.

In court on Wednesday, the prosecution sought a bail of $1 million, which is three times the $331,341 involved, saying he was a flight risk. Gandaruban returned on Monday using a Sri Lankan passport.

Objecting to the unreasonably high bail, his lawyer, Mr Subhas Anandan, said his client was already in Sri Lanka when investigations began.

He said Gandaruban's family was in Singapore and he was a Singapore citizen. One of his reasons for coming back was to see his family. Before that, his family members had been trying to arrange for him to surrender but he was 'too impatient', he added.

District Judge Danielle Yeow halved the bail sum after taking into account various factors such as the amount involved and the reason for his long absence. 'He has even obtained a Sri Lankan passport. Clearly this is a factor which the court will bear in mind,' she said. Gandaruban's passport was impounded.

A pre-trial conference will be held on Oct 25. If convicted, he faces a jail term of up to seven years and a fine for on each count of conspiracy to cheat. The false evidence charge carries a maximum jail term of up to three years and a fine.