Chinese-backed airline GallopAir wins ownership fight for aviation consultancy over former partner
The High Court rules that a director’s 90% stake in Gallop Apac was held for a Chinese backer, not as a personal asset
[SINGAPORE] The High Court has ruled in favour of startup airline GallopAir in an ownership battle over Gallop Apac, finding that the aviation consultancy’s shares were held on trust for its Chinese investors, rather than owned personally by its director.
GallopAir was incorporated in October 2021 and backed by Shaanxi Tianju Investment Group (STIG), a Chinese conglomerate whose founder and beneficial owner is businessman Yang Qiang. STIG’s business includes air transportation services.
GallopAir is known for its US$2 billion deal to purchase 30 aircraft from Chinese state-owned company Commercial Aircraft Corporation of China.
The airline made its debut on Dec 31, 2024, with a chartered flight from Guangzhou to Brunei.
The Brunei-based airline was formed as part of STIG’s plan to expand into South-east Asia, particularly Singapore and Brunei.
GallopAir sought to obtain a Singapore air operator certificate, while Gallop Apac was incorporated in mid-2022 to provide consultancy services for that application and to separately pursue a Brunei certificate.
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The dispute centred on an oral agreement made around July 2022 regarding Gallop’s Apac incorporation and ownership structure.
Under the agreement, 90 per cent of Gallop Apac’s shares were registered in the name of director Lew Kwang Ping, while the remaining 10 per cent went to Chi Cheng, who was the company’s chief executive.
Yang and GallopAir – the claimants – argued that Lew had agreed to hold his 90 per cent stake on trust for Yang, rather than as a beneficial owner.
Lew, who remains director of Gallop Apac, denied this. He argued that he was the legitimate beneficial owner of the stake, and that Yang was merely a potential investor who had been funding the company’s operations.
The claimants alleged that from late 2022, Lew and other Gallop Apac employees sought to oust Yang and Chi from control while its application for an air operator certificate was under way.
Subsequently, the commercial relationship broke down completely.
On Dec 1, 2022, STIG formally announced the termination of their business relationship.
Towards the end of that month, Gallop Apac changed its trade name to “KisAir”.
The claimants filed the suit in the Singapore courts soon after, and a trial took place from February to May this year.
“Absurd and illogical”
In his judgment, Justice Andre Maniam found that Lew’s version of events “does not make commercial sense and is instead absurd and illogical”.
He noted that Yang would not have funded a company which could potentially become a competitor if Lew were the true owner and could sell his stake to a third party.
Yang had funded Gallop Apac’s operations, having put in some S$373,000 until October 2022. Lew took over funding the company only from November 2022, when the business partnership had broken down.
While the defendants argued that Yang was bound to the deal even if it was commercially unfavourable, Justice Maniam argued that when the terms of an agreement are in dispute, it is relevant for the court to consider whether those terms make commercial sense in order to decide what was actually agreed upon.
Further, WhatsApp exchanges between Lew and Cheng show that Lew saw Yang as the beneficial owner of Gallop Apac, with one such message stating: “Mr Yang doesn’t need to be afraid. The company is his.”
The judge found this to be inconsistent with Lew’s claim of ownership.
To this, Lew argued that his messages were sent to humour Yang and encourage his continued investment, as their business relationship had become strained.
But Justice Maniam rejected this explanation, arguing that Yang would still have eventually demanded for his 90 per cent stake.
If Lew then refused, he would have exposed himself not only to a lawsuit for the shares, but also to fresh allegations of having made fraudulent representations to secure the investment.
In the light of the judgment, the court held Lew liable for multiple breaches of the agreement, including refusing to transfer the 90 per cent shareholding to Yang on demand.
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