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Oei Hong Leong loses suit against Raffles Education's Chew Hua Seng

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In this court document, Raffles Education chairman Chew Hua Seng (left) and tycoon Oei Hong Leong are seen having a champagne toast at the house of Mr Oei's sister on Oct 16, 2017.

Singapore

THE High Court has dismissed the lawsuit brought by tycoon Oei Hong Leong and his firm against Raffles Education chairman Chew Hua Seng over an alleged promise by Mr Chew to procure a buyer for the plaintiffs' shares in the mainboard-listed education provider.

Justice Lee Seiu Kin wrote in a 55-page judgement issued on Monday that the agreement - which involved a discussion lasting less than two minutes - between the businessmen on Oct 16, 2017 was not meant to be legally binding, contrary to what the plaintiffs had alleged.

Mr Oei and his firm, Oei Hong Leong Art Museum, claimed that Mr Chew had not, as promised, helped to get a buyer for the plaintiffs' shares at S$0.44 apiece, in return for Mr Oei withdrawing the requisition notice to oust Mr Chew from Raffles Education.

However, the judge said the context of the discussions between Mr Oei and Mr Chew showed the full terms of any sale and purchase agreement between the buyer and Mr Oei would have to be negotiated.

Justice Lee said: "Both Oei and Chew are experienced businessmen. They could not have contemplated that a transaction involving some S$60 million would be completed without the involvement of lawyers to sort out the compliance issues as well as the details of how payment would be effected."

Further, the fact that the witness to the agreement, Mr Oei's sister, was not called by him to give evidence has compelled the judge to draw an adverse inference against the plaintiffs.

Her testimony would clearly be relevant in either supporting or detracting from the conclusion that the Oct 16 meeting was an informal social gathering or not, the judge wrote.

The judge also noted that the handwritten document, which Mr Oei said was a legally binding contract between him and Mr Chew, had not recorded Mr Oei's alleged obligation to withdraw the requisition.

Such evidence led the judge to conclude that the meeting was an informal gathering organised in the hope of reconciliation between the two businessmen, who had fallen out because of Raffles Education's share placement exercise.

On Sept 28, 2017, Raffles Education announced that it would issue up to 95 million new ordinary shares at 30 Singapore cents per share.

Mr Oei questioned the placement, which had diluted the stake that he and his company held from 14.04 per cent to 12.88 per cent.

Mr Oei then asked for an extraordinary general meeting (EGM), calling for the disclosure of the identities of those who were issued shares and the removal of Mr Chew from his appointments.

On Oct 16, 2017, Mr Oei and Mr Chew met at the house of Mr Oei's sister to discuss the dispute. After the discussions, Mr Chew composed a note with the words "Confidential Agreement" at the top and wrote that they had come to an amicable solution.

After both copies were signed, they shook hands, embraced and posed for photographs.

Mr Chew contends that there was no intention by the parties to enter into a legally binding agreement at the casual meeting, held to mend fences over dinner and drinks. The note was jotted down at Mr Oei's request to show their families that they had reconciled, he said.

Mr Chew is represented in this lawsuit by Senior Counsel Alvin Yeo, together with lawyers Lim Wei Lee and Russell Pereira.

Mr Oei, relying on the record - which was rewritten, word for word, so that each side could have a copy - sued Mr Chew for allegedly reneging on his promise. He and his company, Oei Hong Leong Art Museum, had claimed damages of between S$15 million and S$26.5 million.

Mr Oei has filed an appeal against the judgement.