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Raffles Education boss says signed note a 'friendly agreement' and not meant for court use
TYCOON Oei Hong Leong's friendship with his erstwhile holiday companion and Raffles Education chairman Chew Hua Seng had soured two years ago when he demanded to oust Mr Chew from the board and management of the mainboard-listed education group founded by the latter.
The former good friends are now facing off in the High Court in a lawsuit over Mr Chew's purported reneging on his alleged promise in 2017 to procure a buyer for all of Mr Oei's shares.
Mr Oei and his company Oei Hong Leong Art Museum are now seeking - through Senior Counsel Davinder Singh and lawyer Jaikanth Shankar - damages of at least S$15 million or as much as S$26.5 million in the three-day trial that started on Monday.
On Oct 16, 2017, Mr Oei and Mr Chew met at the home of Mr Oei's sister, and a discussion between the two men culminated in two identically worded handwritten notes made by Mr Chew.
According to the plaintiffs, Mr Chew had agreed to procure a buyer for the plaintiffs' 12.88 per cent stake in Raffles Education at S$0.44 per share within a month from the date of the notes. In return, the plaintiffs would withdraw their notice of requisition filed on Oct 12, 2017 for an extraordinary general meeting (EGM) of Raffles Education.
The EGM aimed to remove Mr Chew as chairman and CEO of the education provider, where Mr Chew and his wife are also the largest shareholders with over 33 per cent stakes.
But the sale of the plaintiffs' shares did not take place.
In the opening statement, Mr Singh said: "A man's word is his bond. A gentleman's handshake is worth infinitely more than any signature. But not for the defendant, Mr Chew Hua Seng. For him, promises which he penned in his own words and signed, and then rewrote word for word (so that the plaintiffs can have one copy) and signed again, and which were both witnessed and then sealed with a handshake, count for nothing."
The damages of S$15 million that Mr Oei is claiming are the difference between the sale price of S$0.44 and the S$0.33 when trading closed on Nov 15, 2017, the deadline in the alleged deal. The higher amount of damages of S$26.5 million was assessed by the plaintiffs' expert witness.
Mr Singh in describing Mr Chew's conduct from the beginning right up to this trial, said it "has been nothing short of disgraceful".
"Having shamelessly disclaimed his written commitments, he tried, in these proceedings, to hide highly relevant documents from the court to prevent it from having all the facts," said the Senior Counsel.
Mr Chew, who is represented by another Senior Counsel Alvin Yeo together with lawyers Lim Wei Lee and Russell Pereira, disputes that there were legally binding intentions when the parties made the handwritten record. Instead, the defence alleges, it was agreed that the notes were a "friendly agreement" and "would not be used in court".
Mr Chew, 65, also claims that he did introduce a prospective investor to buy Mr Oei out of Raffles Education, but the 71-year-old tycoon suddenly imposed a new term just before the transaction. This irked the investor and the transaction was aborted as a result.
The tycoon said under cross-examination that he and Mr Chew had been "quite good friends" for about 10 years and had holidayed together.
But by the time the handwritten notes were made, "in my mind, I was not treating him as a friend", Mr Oei said as he gave his evidence mainly in English, interspersed with Mandarin.
Mr Yeo said to Mr Oei: "Suggest to you, Mr Chew was motivated by a desire to mend fences with someone he thought was still his friend, and not because he thought he would lose the EGM."
Mr Oei disagreed.
Four days before the alleged deal, Mr Oei had sent a requisition notice to remove Mr Chew from Raffles Education's board and management. Mr Oei testified that he wanted to have Mr Chew replaced because the educator had made losses the previous year and Mr Chew's wearing both hats as chairman and CEO presented corporate governance issues.
Mr Oei rubbished the allegation that he had wanted to use the requisition to pressure Mr Chew because he was unhappy that his shareholding would be diluted after Raffles Education's new share placement was announced on Sept 28, 2017.
The requisition was later withdrawn, which Mr Oei said was because he was planning to sue Mr Chew over breach of the alleged deal.
When quizzed about not calling his sister - the witness to the alleged agreement - to testify in court, Mr Oei said: "I think for me to be a witness here, so I can answer the question, my sister was for the meeting in… her house. I didn't think about this point, and I'm sorry."
"You are far too intelligent and experienced in litigation, not to have thought of calling Madam Sukma as a witness," charged Mr Yeo.
Mr Oei has completed his testimony while Mr Chew and his wife will take the stand on Tuesday and next Monday. Both parties will each call an expert witness on their calculation of damages, if any.
Mr Oei and his company still owned about 12.9 per cent of Raffles Education as of Feb 22 this year, according to court documents.
Raffles Education posted a net profit of S$40.2 million for the year ended June 30, nearly quadrupled from S$10.6 million the year before. The commercial educator ended flat at 7.2 Singapore cents on Monday.