Hour Glass co-founder Jannie Chan’s $18.9 million debt dispute sent to trial

[SINGAPORE] The Appellate Division of the High Court has sent a S$18.9 million dispute over alleged improper loans by bankrupt businesswoman Jannie Chan’s coffee-trading company to trial. This hands the Hour Glass co-founder a win in her years-long legal battle with creditors.

The ruling, delivered on Jan 7, sets aside an earlier High Court decision that had admitted S$18.9 million in debt claims against Chan’s bankruptcy estate.

The three-judge panel found that the High Court erred in deciding the matter based on affidavits and documents alone, given that there were significant disputes of fact that could be resolved only through the cross-examination of witnesses.

The judges found that the allegations that Chan breached her fiduciary duties are “serious accusations, and the available evidence before us does not appear sufficient to establish such dishonesty and a lack of good faith”.

“Having considered the parties’ written and oral submissions, we are of the view that the proper course of action is for us to order a trial before the judge to determine the admissibility of (the two sums claimed).”

Complex web of claims

The claims stem from Chan’s role as a director of Timor Global Pte Ltd (TGPL), a Singapore-incorporated coffee-trading company that was wound up in 2018.

Chan, now 80, was the sole shareholder of TGPL and held between 60 and 70 per cent of the shares in a related company in Timor-Leste, known in court documents only as TL.

The claims involve two main sums: S$15.8 million as well as represented receivables allegedly owed by TL to TGPL; and US$2.3 million related to the sales proceeds from coffee beans sold by TGPL in 2008 that were allegedly paid directly by customers to the Timor-Leste entity instead.

These two sums are being claimed by Fulcrum Distressed Partners Ltd (FDPL), which purchased the debt claims from the liquidators of TGPL.

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FDPL argued that Chan breached her fiduciary duties by allowing these transfers and failing to pursue their recovery, causing losses to TGPL and ultimately, its creditors.

In February 2025, a High Court judge accepted these claims after Chan’s private trustee in bankruptcy, Yit Chee Wah, had initially rejected them. This slapped an additional S$18.9 million onto the claims against Chan’s bankruptcy estate, which already included more than S$4 million owed to licensed moneylender SME Care.

Loan characterisation

One key issue was whether the S$15.8 million were genuine debts under the joint-venture arrangements between TGPL, TL, and another firm, Intraco Trading.

The judges noted that the payments from TGPL to TL in 2007 roughly coincided with advance payments from Intraco meant for TL under the agreement, suggesting that the funds may have been merely channelled through TGPL.

“If Intraco was merely using TGPL as a conduit to make the 2007 payments to TL, then there can be no issue of any breach of fiduciary duty,” the judges said.

Chan, other TGPL directors, or staff members could have shed some light on the issues regarding these funds had they been cross-examined and asked to give evidence, noted the judges.

The judges also raised concerns about the reliability of TGPL’s management accounts, which showed substantially different receivables from TL compared with audited financial statements.

In 2008, management accounts recorded S$16.9 million as receivables from TL, but audited accounts showed only S$7.1 million – a difference of S$9.8 million that auditors had written down.

Contrary statements

The judges also highlighted contradictions in Chan’s own statements. While she had admitted in earlier court proceedings that TGPL had lent money to TL, she later claimed in affidavits that she was merely a “financial investor” with no hands-on involvement in TGPL’s operations, leaving management to fellow directors Bobby Lay and Tan Tjo Tek.

Chan had also stated that because she was travelling 90 per cent of the time, her staff had access to her digital signature which they used when necessary.

“Ms Chan’s statements on affidavit, where she disclaimed that she oversaw the operations of TGPL or any management control over TGPL, might suggest that she would not be able to explain why the 2007 payments were made to TL,” the judgment stated.

The judges said these contradictions ought to have been resolved through the cross-examination of witnesses, including Chan herself, Lay and Tan.

“Without sufficient evidence to show that Ms Chan caused or authorised the disbursement of the TL sum to TL or that she instructed the customers to transfer the finished goods sum to TL, Ms Chan cannot be held in breach of her fiduciary duties in respect of those very acts,” the judgement added.

Yit was represented by Blossom Hing, Mitchell Yeo and Claire Neoh from Drew & Napier. FDPL was represented by Lee Eng Beng, Benjamin Liow and Jung Sangbum from Rajah & Tann.