In 1986, he was charged in Singapore with abetting criminal breach of trust relating to the collapse of Pan-El. He was convicted and sentenced to two years imprisonment by Singapore High Court Justice Lai Kew Chai. In Lai's judgement, Lai said Tan's offences had "struck at the very heart, integrity, reputation and confidence of Singapore as a commercial city and financial centre". After his sentencing, Tan in 1987 relinquished his position as MCA President and MP for Gopeng, Perak that he just won in 1986 general election earlier.