OCM Opportunities Fund II, LP and Others v Burhan Uray (alias Wong Ming Kiong) and Others

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 06 August 2004
• Neutral Citation: [2004] SGHC 165
• Docket Number: Suit No 50 of 2004 (Summons in Chambers No 1150 of 2004)
• Date: 06 August 2004
• Published date: 13 August 2004
• Year: 2004
• Plaintiff Counsel: Davinder Singh SC, Yarni Loi, Kabir Singh and Tan Mei Yen (Drew and Napier LLC)
• Citation: [2004] SGHC 165
• Defendant Counsel: Molly Lim SC and Ambrose Chia (Wong Tan and Molly Lim LLC),A S Shankar (Rajah Velu and Co),N Sreenivasan and Nigel Pereira (Straits Law Practice LLC)
• Court: High Court (Singapore)
• Subject Matter: Whether order just and convenient,Whether salary caught by injunction,Mareva injunction,Test for order for cross-examination,Scope of jurisdiction,Injunctions,Affidavits of assets,Application for order to cross-examine defendants on affidavits on ground that affidavits incomplete and lacking in particulars

6 August 2004

Belinda Ang Saw Ean J:

1 This is my Grounds of Decision on the plaintiffs’ application to cross-examine various defendants on their affidavits of assets. The first seven defendants are Burhan Uray (“D1”), Joseph Wong Kiia Tai (“D2”), Soejono Varinata (“D3”), H Sudradjat Djajapert Junda (“D4”), Hendrick Burhan (“D5”), Joseph Siswanto (“D6”) and PT Daya Guna Samudera Tbk (“D7”). The tenth defendant is Gary Chan Wei Long (“D10”). The 11th and 13th to 15th defendants are WMP Trading Pte Ltd (“D11”), Borneo Jaya Pte Ltd (“D13”), Natura Holdings Pte Ltd (“D14”) and Handforth Profits Ltd (“D15”) respectively.

2 With the exception of D15, the above-named defendants have appealed against my order of 25 May 2004 allowing the plaintiffs’ application. In the case of Betty Pai alias Pai Sha, the 12th defendant (“D12”), her appeal is against that part of the order directing her to file a further affidavit to explain the whereabouts of the proceeds of sale of the property at 99 Meyer Road, #12-01 The Sovereign, Singapore 437920.

3 The plaintiffs are OCM Opportunities Fund II, LP; Columbia/HCA Master Retirement Trust; Gryphon Domestic VI, LLC; OCM Emerging Markets Fund, LP; and ASO I (Delaware) LLC. At the hearing, they were represented by Mr Davinder Singh SC assisted by Mr Kabir Singh and Ms Yarni Loi. Mr A S Shanker represented D10. Ms Molly Lim SC assisted by Mr Ambrose Chia represented D12. The remaining defendants, whom I shall, for convenience, refer to collectively as the “majority defendants” were represented by Mr N Sreenivasan assisted by Mr Nigel Pereira.

4 A fuller account of the facts of the case appears from my judgment in OCM Opportunities Fund II, LP v Burhan Uray (alias Wong Ming Kiong) [2004] SGHC 115. In brief, the plaintiffs’ case against the defendants is that, save for D12 to D15, the defendants or some of them conspired together to commit a complex fraud. They created fictitious sales of fish or other related products to related companies. They represented to the plaintiffs that the contracts were genuine and thereby falsely inflated the profits D7 appeared to be earning. This enabled the defendants to deceive the plaintiffs into buying bonds guaranteed by D7. The funds from the issue of the bonds were allegedly diverted and not invested into D7’s business as represented.

5 On 19 January 2004, the plaintiffs obtained ex parte a worldwide injunction (“the Mareva order”). It was a relatively standard order. It restrained the defendants from dealing with their assets, except within permitted limits. It required them to disclose their worldwide assets by affidavit. The defendants were required by the terms of the order to, inter alia:

Disclosure of Information

… inform the Plaintiffs in writing at once of all [their] assets whether in or outside Singapore and whether owned legally or beneficially by [them] and whether in [their] own name or not and whether solely or jointly owned, giving the value, location and details of all such assets.

…

Exceptions to the Order

(1) Provided that the terms of this order which appear under the heading “Disclosure of Information” have first been fully complied with to the satisfaction of the Plaintiffs, this order does not prohibit each of the Defendants, insofar as they are natural persons, from spending a reasonable amount a week towards his ordinary living expenses, and in respect of all the Defendants, a reasonable sum on legal advice and representation. But before spending any money the Defendants must inform the Plaintiffs’ solicitors where the money is to come from.

(2) This order does not prohibit each of the Defendants from dealing with or disposing of any of its assets in the ordinary and proper course of business. Each of the Defendants shall account to the Plaintiffs weekly for any assets so disposed of and for the amount of money spent in this regard.

6 There is some history to the plaintiffs’ application to cross-examine the defendants. The defendants filed the first set of affidavits of assets after I had refused their application made on 6 February 2004 to suspend disclosure of assets until after the determination of their application to set aside the ex parte Mareva order, including the striking out of the action. The majority defendants and D12 also sought, in the alternative, a stay of the proceedings on grounds of forum non conveniens. The plaintiffs’ application to cross-examine the defendants on the affidavits of assets was filed on 1 March 2004. The defendants’ reply affidavits, some of which, inter alia, disclosed additional assets or furnished details of assets already disclosed, were filed after the conclusion of the inter partes hearing.

7 The defendants did not succeed at the inter partes hearing and appealed against my decision made on 5 March 2004. I refused to stay the hearing of the application to cross-examine the defendants pending the determination of the defendants’ appeal to the Court of Appeal against the whole of my decision; so did Chao Hick Tin JA, who heard the defendants’ application for an expedited appeal on 10 March 2004 and further arguments on 17 March 2004. Chao JA also directed D1 to D8 and D11 to D15 to file their defence by 26 March 2004. Apart from these two directions, the proceedings were stayed pending determination of the appeal.

Affidavits of assets

8 The plaintiffs complained that the defendants had not complied with the Mareva order as the lists of assets furnished were incomplete. The plaintiffs’ comments on the affidavits of assets are summarised below.

D1, D2 and D3

9 D1 disclosed assets worth S$3.4m. This was made up of two properties in Indonesia, cars in Singapore and Indonesia, as well as bank accounts in Indonesia and Singapore. The balances in the bank accounts were negligible in sharp contrast to D1’s reputation as a “timber king”. No income-generating assets were revealed.

10 D2 is a director of Oriental Timber Corporation (“OTC”), which used to operate significant logging activities in Liberia on behalf of the Djajanti Group. D2 disclosed his 10% interests in the shares of OTC, indirect interests in Natura Holdings (D14) and approximately S$80,000 in cash deposits.

11 D2 gave no value or other details of his 10% shareholding in OTC and indirect interests in D14, which he had initially denied owning in his first affidavit dated 6 February 2004.

12 D3’s first affidavit of assets disclosed only approximately S$142,505 worth of assets, excluding shares. He disclosed three motor vehicles. He disclosed no real property. In his reply affidavit, he disclosed his shares in various companies in the Djajanti Group, but only gave the par value of those shares as opposed to their value on a simple net asset basis. D3’s assets were lesser in value than what D1 had disclosed. Of the S$142,505 worth of assets, excluding shares, only S$104,505 was in cash deposits. No other income-generating assets, apart from the shares in companies in the Djajanti Group, were disclosed.

13 The affidavits of assets of the two sons were equally unremarkable. The bank balances disclosed were negligible. The value of the overseas assets was trivial. The plaintiffs were not convinced by what was disclosed. Mr Singh commented that the people concerned are from a wealthy family in Indonesia headed by a “timber king”. D3, by his own admission at para 2 of his affidavit filed on 6 February 2004, was the major shareholder in the Djajanti Group and in effective control of the Group and related companies. D1 had supposedly transferred his wealth to his sons, D2 and D3. According to D1, since then, “whenever I need any money, [D2] and [D3] oblige me.” If D1 had told the truth, then D2 and D3 had not disclosed fully the assets owned by them in their sole names or jointly with others or held by others as nominees. Conversely, if D2 and D3 were to be believed on their respective affidavits of assets, then D1 had lied. So either D1 was lying or D2 and D3 was lying , or all of them were lying.

D4, D5 and D6

14 D4 was an old friend and business partner of D1 and was one of the founding members of PT Bintuni Minaraya Tbk (“BMR”). D4 disclosed that his total assets worldwide amounted to S$39,901. This was comprised of cash in Bank Danamon of Rp140,000,000 (S$26,601) and a 1997 Toyota car with registration no B7788-ZZ with an estimated value of approximately Rp70,000,000 (S$13,300). He disclosed a pension from the Djajanti Group, but gave no other details.

15 The plaintiffs had uncovered other assets like a green 1996 Mercedes 300 GE Jeep with registration no B2411 WO and a white Mercedes 230 Automatic with registration no B2709 ZB. In D4’s reply affidavit, D4 added to his list of assets shares in the Djajanti Group and provided the par value of the shares. No other income-generating assets were disclosed.

16 D5 is another of D1’s sons. The grand total of his assets worldwide was stated as S$4,894. He disclosed the existence of a bank account at BCA Jakarta, but gave no other details. In his reply affidavit, D5 disclosed another bank account with Bank Mandiri with a balance of Rp25,828,890.28 as at 10 March 2004.

17 D6 disclosed a property in Jakarta and shares in various companies. No other details were provided as to value of the property and the shares.

D7

18 Johnson Sihombing (“Sihombing”) affirmed the affidavit of assets on behalf of D7. D7’s list of assets of US$107,385,854 comprised of cash and bank balances, fixed assets and investments. In his reply affidavit, he acknowledged that the list was not up to date. It was a list that he was comfortable with and willing to furnish before consulting his legal counsel on Indonesian corporate law. In short, it was the best list he could furnish at short notice.

19 The plaintiffs found Sihombing’s excuse untenable as he was already aware of what was required from his experience of the BMR proceedings. Siswanto (D6) filed a list of assets on 22 November 2001 on behalf of...