Jeyasegaram David (alias David Gerald Jeyasegaram) v Ban Song Long David

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 01 October 2004
• Neutral Citation: [2004] SGHC 225
• Date: 01 October 2004
• Subject Matter: Test for determining natural and ordinary meaning of words,Whether statement defamatory in its natural and ordinary meaning,Factors to consider,Fair comment,Whether defence of qualified privilege made out,Qualified privilege,Whether defence of fair comment made out,Defamation,Tort,Plaintiff accused of "playing to the gallery",Defamatory statements,Whether defence of justification made out,Justification
• Docket Number: Suit No 898 of 2003
• Published date: 04 October 2004
• Defendant Counsel: Davinder Singh SC, Hri Kumar, Cheryl Tan, Adrian Tan and Chelsia Wong (Drew and Napier LLC)
• Court: High Court (Singapore)
• Plaintiff Counsel: Andre Yeap SC, Lee Eng Beng and Chan Hoe (Rajah and Tann)

1 October 2004 Judgment reserved.

Tay Yong Kwang J:

1 The plaintiff, a lawyer, is the President and Chief Executive Officer of the Securities Investors Association (Singapore) (“SIAS”). SIAS is a non-profit organisation that is actively involved in the promotion of investor education, corporate transparency and corporate governance. It also serves as a watchdog for investor rights in Singapore.

2 The defendant is a director with a shareholding interest in 98 Holdings Pte Ltd (“98 Holdings”), which owns or controls some 51.23% of the share capital of NatSteel Ltd (“NatSteel”). On 25 January 2003, he was appointed a director of NatSteel and has acted at all material times as the nominee of 98 Holdings on the board of directors of NatSteel.

3 NatSteel is a Singapore-incorporated company listed on the Singapore Exchange. The NatSteel group is principally in the steel and industrial business. During the latter half of 2002 and up to January 2003, NatSteel was the subject of one of the most highly publicised corporate take-over battles in Singapore.

The plaintiff’s case

4 The plaintiff’s claim against the defendant is for damages suffered as a result of the publication of certain words uttered by the defendant in both the print and on-line editions of The Business Times (“BT”) on 4 June 2003. The allegedly defamatory words were:

Mr Ban, however, feels that Mr Gerald is “playing to the gallery.”

The above words were part of an article entitled “No Resolution in Sight for NatSteel–Oei Stalemate” written by Catherine Ong. The full text of the article is repeated below:

No compromise between NatSteel and tycoon Oei Hong Leong appears in sight as shareholders gather today for a second time to approve payment of a cash dividend and the right to scrip dividends in the future.

David Ban, a NatSteel director representing hotelier Ong Beng Seng’s interests, told BT that attempts by the company’s legal counsel, Allen & Gledhill, to sound out Mr Oei’s intentions have come to naught.

“He’s playing his card close to his chest. His lawyer said the client is away,” Mr Ban said of Mr Oei.

NatSteel wasn’t the only party who couldn’t contact Mr Oei. David Gerald, president of the Securities Investors Association of Singapore (Sias), said yesterday he failed to arrange a meeting between Mr Oei and NatSteel’s board.

Mr Oei is out of town, an Sias statement said. “Up to now, it appears that minority shareholders are inclined to vote against all resolutions currently on the table.”

Minority shareholders, Sias added, are “outraged” that despite an assurance by the NatSteel board at the last annual general meeting that shareholders could expect dividends of $1 a share, only 45 cents has been paid.

“NatSteel is now employing a new stance when paying the balance of the remaining one dollar … Sias calls on NatSteel board to severe [sic] the linkage (between the resolution to amend the M&A (memorandum and articles of association) and the resolution to pay the balance of 55 cents) and keep its promise to its shareholders,” the Sias statement added.

Mr Ban, however, feels that Mr Gerald is “playing to the gallery”.

“What you have here is the obstructive action of a minority shareholder that is disadvantaging the majority, including 98 Holdings. It is not oppression by the majority but the minority. Everyone including 98 wants the dividends. If shareholders don’t get their dividends, they should be blaming him.”

Mr Oei owns 29.9 per cent of NatSteel – above the crucial 25 per cent veto power over special resolutions including the amendment of the company’s M&A to allow for future share buy-back and scrip dividend.

He is unhappy that the board has tied the passage of a resolution to pay some $200 million in cash dividends to the M&A resolution. He is also opposed to giving the company a share buy-back mandate.

Observers believe that NatSteel board has made the payment of dividend conditional on the passage of the resolution to amend the M&A because it wants to be sure of securing Mr Oei’s vote on the latter.

NatSteel has said the M&A changes are necessary to bring its M&A in line with recent changes to listing rules and, more importantly, to provide flexibility in future capital management.

To allay Mr Oei’s concerns that any future scrip dividend could dilute his interest in the company, 98 proposed at last week’s extraordinary general meeting an amendment to white-wash – that is, to waive shareholders’ right to a general offer from Mr Oei should the scrip dividend result in his stake hitting the 30 per cent mark that triggers a mandatory offer.

Mr Ban said Mr Oei’s opposition isn’t rational. “He has made public the issue of dilution and we’ve addressed that with the white-wash, and we’ve asked him many, many times what are the other issues.”

Mr Oei wasn’t available for comment yesterday.

I have highlighted the alleged defamatory words in the above article.

5 The plaintiff alleged, in para 21 of his Statement of Claim:

that the said words …, in their natural and ordinary meaning, meant and were understood to mean that the Plaintiff, in commenting on the continuing opposition by the minority shareholders of NatSteel to the proposed resolutions by NatSteel for the payment of a cash dividend and for the issue of scrip dividends in future:

(a) was not discharging his duties as the CEO/President of SIAS in an unbiased, impartial and objective manner in supporting the opposition by the minority shareholders of NatSteel to the proposed resolutions;

(b) had caused SIAS to support the said opposition by the minority shareholders of NatSteel for the dominant purpose of appeasing and gratifying the minority shareholders and/or the public;

(c) had caused SIAS to support the said opposition by the minority shareholders of NatSteel for the dominant purpose of displaying showmanship, and/or of enhancing his personal popularity and reputation amongst the minority shareholders and/or the public;

(d) had caused SIAS to take a position without impartially, seriously and diligently assessing the merits of that position; and

(e) had not acted professionally, credibly and properly as the CEO/President of SIAS in causing SIAS to issue the said statement.

6 The plaintiff claimed that the words in issue caused him considerable distress and injured his dignity, character and reputation. By a letter of demand dated 25 August 2003 from his solicitors to the defendant, the plaintiff demanded that the defendant retract the allegedly defamatory statement made in the BT article, apologise and pay him damages and legal costs. The defendant’s solicitors replied, rejecting the plaintiff’s contentions and demands as baseless. The defendant’s failure to retract the statement and to apologise, the plaintiff claimed, increased the hurt to his feelings and aggravated the injury done to him.

7 I now highlight the matters raised by the plaintiff in his Affidavit of Evidence-in-Chief and the events that led to the publication of the BT article of 4 June 2003.

8 In June 1999, the plaintiff founded SIAS in response to the freezing of the Central Limit Order Book (“CLOB”) shares by the Malaysian authorities in September 1998. Some 49,800 Singaporeans who held CLOB shares joined SIAS to support his cause to free the CLOB shares. After nine months of active negotiations, he believed his “initiative and leadership” facilitated the final settlement which led to the release of the shares.

9 After resolving the CLOB issue, SIAS continued to play an active role in standing up and speaking out for the rights and interests of minority shareholders. It was instrumental in resolving many high-profile corporate governance and transparency issues relating to listed companies. The plaintiff gave seven examples of such and produced the newspaper reports on those cases. SIAS’s membership has now increased to about 63,000.

10 The plaintiff said he was accorded widespread recognition and that he gained a strong reputation both in Singapore and in the region for being a champion of minority shareholders’ rights. He reproduced extracts from articles about him appearing over the last five years in the English newspapers in Singapore, Forbes Global Magazine, Far Eastern Economic Review, The Edge and the CFO Asia Magazine. These described him as “a confident and fearless fighter” who “no longer minces his words”, “an activist who’s willing to ‘walk the talk’ ”, “a former lawyer with an unflappable demeanour” who “also has the aggressive cross-examining technique of a star prosecutor”, “the face of shareholder activism in Singapore” who “has been on the cover of international magazines like Forbes and CFO Asia and has appeared on CNN and BBC”, someone whom retail investors loved and who “vowed to become a permanent watchdog to keep corporate malfeasance in check”. The publications also referred to him as “a gadfly with an eagle eye for corporate hanky-panky”, someone who “is such a power in the stock market that he is often given the royal treatment companies normally reserved for major fund managers such as Templeton’s Mark Mobius” and who had proclaimed, “We will not be bullied. If a company doesn’t back down, we will sue” and “I got fire in my belly”.

11 In addition to those publications, the plaintiff said his work was also recognised by the broadcast media such as Channel News Asia, CNBC Asia Pacific and News Radio 93.8, which had requested him to appear on their programmes.

12 Being the President and Chief Executive Officer of SIAS, he followed the developments in the take-over battle in respect of NatSteel as reported in the media. In October 2002, 98 Holdings announced a voluntary conditional cash offer for NatSteel shares at $1.93 per share. That price was increased several times by 98 Holdings to finally reach $2.06 and the closing date of the offer was also extended several times to, ultimately, 24 January 2003.

13 During the period of the take-over battle, NatSteel issued...