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Transcorp unit director stops legal action to recover S$2.6m without consulting company
A DIRECTOR of Transcorp Holdings' subsidiary, Regal Motors, has ceased legal action to recover S$2.64 million from a supplier without consulting Transcorp.
Transcorp, which owns an 89.5 per cent stake in Regal Motors, said it is pursuing this matter with the director, Ronnie Chua Heng Chuan, by seeking him out for a "meeting and discussion".
The company also filed a police report on Oct 16 on this matter, due to the unexplained "irregularities" in the director's actions, and an ongoing Commercial Affairs Department (CAD) investigation involving financial and other information provided by Regal Motors.
Regal Motors had on Dec 17 last year received a notice from CAD to provide financial information and corporate e-mail accounts of past employees to assist in an ongoing investigation. Transcorp announced this on Dec 24 last year.
Transcorp said on Friday that, subject to investigations arising from the police report it made and the availability of financial resources, it may also pursue a "legal review" of Mr Chua's fiduciary obligations as the sole statutory director of Regal Motors.
The company first directed Regal Motors to pursue legal action against its supplier in March last year. Under Transcorp's direction, Mr Chua formally commenced the legal action in July 2019. He later authorised representatives from Transcorp to negotiate a settlement in March 2020.
But on Oct 13, Mr Chua instructed the external legal counsel to stop all work on the legal action and to file a notice of discontinuance in the suit to the defendants' lawyers, with each party to bear their own cost. This was done "without any directive from or consultation with" Transcorp.
When Transcorp found out, it said it immediately informed the legal counsel not to proceed with the action, but the legal counsel would only take instructions from a director of Regal Motors.
The company also contacted Mr Chua, but he was "not forthcoming" and has not responded to the company's queries nor requests for a meeting since.