THE former chief executive officer of International Healthway Corporation (IHC), Fan Kow Hin, had engaged in transactions with the intention to defraud creditors, the Singapore High Court has found.
Fan, a bankrupt since March 2017, had entered into various transactions with 3 defendants: his wife, Chee Yin Meh, and 2 companies One Organisation and Gateway Plus.
One Organisation was 58 per cent held by Fan and 42 per cent held by Chee, while Gateway Plus is a wholly-owned subsidiary of One Organisation.
The trustees in Fan's bankruptcy said that Fan had entered into 10 transactions with one or more of the defendants before his bankruptcy, which were undervalued and "fraudulent transactions calculated to put assets out of the reach of his creditors".
They sought orders requiring the defendants to restore Fan's estate to the position it would have been if the transactions had not taken place, or for a civil remedy.
The transactions include Fan transferring his 58 shares in One Organisation to Chee.
In the written judgment dated Aug 26, Justice Vinodh Coomaraswamy said that the conveyance of the shares to Chee took place after Feb 17, 2017 at a time when Fan was insolvent and took place pursuant to Fan and Chee's "common fraudulent intention".
"The circumstances of this case therefore warrant imputing irrebuttably to the bankrupt an intent to defraud his creditors regardless of his subjective intent," the judge wrote, noting that Fan had been insolvent in Feb 2017.
He also noted that the consideration of S$1 paid by Chee for Fan's shares in One Organisation was an undervalue.
Other transactions that the court also found were fraudulent conveyances include Fan's transfer of his stake in Golden Cliff - which held part of his interest in IHC (now known as OUE Lippo Healthcare) - to One Organisation for S$1, as well as a transfer of S$782,000 from Fan's account with Hong Leong Finance to Chee.
Apart from the transactions, the judgment also noted that Fan had advanced a "false narrative" to the trustees about several documents, which were created in 2016 and falsely backdated to 2010.
"This false narrative which the bankrupt presented to the trustees and which the defendants adopted in their defence carries very obvious and very serious consequences for the credibility of both the bankrupt and (Chee)," the judge wrote, noting that "the deception was broad in scope and in time".
"Despite admitting that these statements are false, the defendants have never applied to amend their defence to withdraw the statements and to rest their defence on the truth," he added.
The parties can now draw up the formal orders to give effect to the findings in the judgment and the court will also hear from the parties on costs.