Oei Hong Leong v Ban Song Long David and Others

• Judge: Tay Yong Kwang J
• Judgment Date: 10 November 2004
• Neutral Citation: [2004] SGHC 253
• Citation: [2004] SGHC 253
• Defendant Counsel: Tan Chee Meng, Doris Chia and Chang Man Phing (Harry Elias Partnership),Davinder Singh SC, Hri Kumar, Adrian Tan, Cheryl Tan and Chelsia Wong (Drew and Napier LLC)
• Published date: 22 November 2004
• Plaintiff Counsel: Michael Khoo SC, Josephine Low and Andy Chiok (Michael Khoo and Partners)
• Date: 10 November 2004
• Docket Number: Suit No 670 of 2003
• Court: High Court (Singapore)
• Subject Matter: Whether comments made by first defendant amounting to company director defending board of directors against attack,Whether comments made true in substance and fact in their natural and ordinary meaning,Whether making and publication of comments actuated by malice,Whether comments made regarding matter of public interest,Malice,Context in which comments appearing suggesting plaintiff being unreasonable and unfair,Justification,Comments published in newspaper article,Whether successful defence of fair comment by maker of comments extending to publisher and writer of article,Whether first defendant having interest or duty to make such communication to public and whether public having corresponding interest to receive it,Whether comments defamatory in themselves or by virtue of their context,Qualified privilege,Whether comments an expression of maker's honest opinion of plaintiff's conduct,Defamatory statements,Tort,First defendant making various comments regarding plaintiff,Whether comments based on facts,Fair comment,Defamation,Whether publisher and writer of article protected under doctrine of derivative privilege

10 November 2004

Tay Yong Kwang J:

1 In this action, the plaintiff, a prominent businessman, seeks damages for libel in respect of an article published in the print and on-line editions of The Business Times (“BT”) of 4 June 2003.

2 The first defendant (“David Ban”) is a director with an indirect financial interest in the second defendant, 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 he has acted at all material times as one of four nominees of 98 Holdings on the board of directors of NatSteel.

3 At the material time, 98 Holdings was a consortium comprising Excel Partners Pte Ltd (“Excel”), Tazwell Pte Limited (“Tazwell”) and two private equity funds, Standard Chartered Private Equity Limited and Vallance Resources Limited. Excel was and is the company of a prominent Malaysian businessman, Datuk Ong Beng Seng (“Datuk Ong”) and his relatives, including David Ban. Excel held 50% of the shareholding in 98 Holdings (later increased to 54%).

4 The third defendant, Singapore Press Holdings Limited (“SPH”), is the publisher of the BT, an influential newspaper in Singapore with a wide readership among the business and financial community here and in the region. SPH used to be the employer of the fourth defendant (“Catherine Ong”) who was a senior journalist at the material time. She wrote the BT article in question.

The plaintiff’s case

5 The plaintiff’s claim against the defendants is for damages suffered as a result of the publication of certain alleged defamatory words attributed to David Ban in the BT article of 4 June 2003. The alleged defamatory 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 reproduced 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 had 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 (in italics) the alleged defamatory words. There was no dispute that the words attributed to David Ban were spoken by him.

6 The plaintiff had opposed the resolution proposed by NatSteel that payment of a cash dividend to shareholders, which had previously been recommended by the board of directors of NatSteel unconditionally, be dependent on approval of the resolution to amend NatSteel’s Memorandum and Articles of Association (“M&A”) to provide for a scrip dividend scheme. The plaintiff averred that the alleged defamatory words in their natural and ordinary meaning meant and were understood to mean that, in making his opposition, he:

(a) was acting in an unreasonable, malicious and/or perverse manner without considering the interests of the majority shareholders;

(b) intended to disadvantage the other shareholders of NatSteel without good reason, cause or justification;

(c) was using his opposition to the resolutions to wreak oppression on the other shareholders of NatSteel, including the majority shareholders of the company; and

(d) should be held responsible to the other shareholders of NatSteel if the proposed resolutions were not passed.

7 It was the plaintiff’s case that Catherine Ong falsely and maliciously caused the words in question to be published and that David Ban, 98 Holdings and SPH falsely caused the same words concerning the plaintiff to be written and published. The plaintiff alleged that the statements made by David Ban were timed and intended to cause him maximum damage and embarrassment in the eyes of the influential readership of the BT which included the minority shareholders of NatSteel who were due to attend the adjourned extraordinary general meeting (“EGM”) on 4 June 2003. He alleged that David Ban was both speaking in his own capacity as well as in the capacity of spokesman for 98 Holdings. The plaintiff also alleged that SPH must bear responsibility for Catherine Ong’s acts and that SPH had readily provided her with the opportunity to defame him. He also asserted that this was not the first time that SPH and Catherine Ong had libelled him during the battle for control of NatSteel but they had the grace to publish an apology on the previous occasions.

8 The plaintiff claimed that the words in issue caused him considerable distress and injured his dignity, character and reputation. On 5 June 2003, his former solicitors, M/s Rajah & Tann, sent letters to David Ban and to SPH demanding that they retract the allegedly defamatory statements made in the BT article of 4 June 2003, apologise and pay him damages and legal costs. On 23 June 2003, his solicitors sent similar letters of demand to 98 Holdings and to Catherine Ong. The demands were rejected by all the defendants.

9 I now set out the history of the so-called NatSteel takeover saga that led to the BT article of 4 June 2003. NatSteel is a Singapore-incorporated company listed on the Singapore Exchange (“SGX”). 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 takeover battles in Singapore.

10 For the past 20 years, NatSteel was under the management and leadership of Ang Kong Hua (“Ang”) who, until 1 January 2002, was also Chairman of the Securities Industry Council (“SIC”). Crown Central Assets Limited was a company owned and controlled by Ang and another senior executive of NatSteel. On 3 June 2002, Ang, through Crown Central Assets Limited, made an offer to acquire all of NatSteel’s businesses, undertakings and assets, together with its investments in all its subsidiaries other than its investments in NatSteel Brasil and NatSteel Broadway, free from all bank borrowings, as at 31 December 2001. This will be referred to as the management buy-out offer (“the MBO”). The value of NatSteel Brasil and NatSteel Broadway, which were being sold, would have brought in some $586.6m for NatSteel. This represented cash available for distribution to shareholders at $1.55 per NatSteel share. The MBO was for $294m which would have allowed a distribution of $1.84 per share to be made. In August 2002, the MBO was increased to $350m, enabling a cash distribution of $1.91 per share to be made.

11 At that time, Temasek Holdings Pte Ltd (“Temasek”) held 7.9% of NatSteel’s equity. On 24 September 2002, Temasek announced in the BT that the MBO was not a “done deal” as far as it was concerned, that it remained open to considering any other bids and would make a final decision after all offers and information were made available to NatSteel’s shareholders. As a result of this announcement, the plaintiff approached Mdm Ho Ching of Temasek to speak to her about the MBO and to seek Temasek’s blessing should he decide to make a general...