Petroships Investment Pte Ltd v Wealthplus Pte Ltd and others and another matter
Jurisdiction | Singapore |
Judge | Sundaresh Menon CJ |
Judgment Date | 21 March 2016 |
Neutral Citation | [2016] SGCA 17 |
Plaintiff Counsel | Tan Kok Peng, Ho Mingjie Kevin, Grace Loke and Xiao Hongyu (Braddell Brothers LLP) |
Docket Number | Civil Appeal No 113 of 2014 and Summons No 293 of 2015 |
Date | 21 March 2016 |
Hearing Date | 25 November 2015 |
Subject Matter | Companies,Members,Derivative action |
Year | 2016 |
Citation | [2016] SGCA 17 |
Defendant Counsel | Mulani Prakash P and Carmen Chen (M & A Law Corporation,Rethnam Chandra Mohan, Khelvin Xu Cunhan and Tan Ruo Yu (Rajah & Tann Singapore LLP) |
Court | Court of Appeal (Singapore) |
Published date | 25 March 2016 |
Case law is the lifeblood of the common law system in general and the Singapore legal system in particular. This is not surprising as case law is, in fact, a foundational building block in the genius of the common law and equity as we know it. Case law is often also an integral part of the process of statutory interpretation. It is, however, important to note that case law is not important for its own sake. It must be
The appellant was Petroships Investments Pte Ltd (“Petroships”), which was a minority shareholder in Wealthplus Pte Ltd (“Wealthplus”). Wealthplus was the first respondent. Its shareholders (and their shareholdings) were:
The ultimate parent company of Megacity and KBBCE was Koh Brothers Group Limited (“Koh Bros Group”), which was the second respondent. Listed in 1994, Koh Bros Group describes itself as a well-established construction, property development and specialist engineering solutions provider. It offers construction services with various subsidiaries, joint ventures and associated companies in Asia, including China.
Early in 1998, Koh Bros Group founder, Koh Tiat Meng, invited Alan Chan, who controlled Petroships, to invest in a project to exploit certain land use rights in China. These rights, to develop five plots of land in Shantou, China, were initially held by KBBCE. Alan Chan agreed. Wealthplus was created as the investment vehicle for the project and held the land use rights through certain subsidiaries. Initially, Megacity and Petroships were the only two shareholders of Wealthplus. In 2011, Megacity transferred a portion of its 90% shareholding to KBBCE such that the former held 49% and the latter held 41% shareholding.
The terms of the joint investment between Petroships and Megacity were set out in a joint venture agreement dated 8 June 1998. It was stipulated that Wealthplus’ paid-up capital would be $1m, with Megacity contributing 90% and Petroships the remaining 10% (in proportion to their shareholdings at that particular point in time). Wealthplus would also reimburse KBBCE for the cost of the land use rights, up to the amount of $27.7m. The shareholders would finance the first tranche of the reimbursement with an $11m loan to Wealthplus. As the contributions to the loan were in accordance with the shareholders’ respective shareholdings, Petroships extended a loan of $1.1m to Wealthplus.
From July 1998 to September 2009, Wealthplus had three directors on its board. Petroships nominated Alan Chan. Megacity nominated Koh Teak Huat (Koh Tiat Meng’s brother) and Koh Keng Siang (Koh Tiat Meng’s son). Besides being Wealthplus directors, Koh Teak Huat and Koh Keng Siang were also directors in other companies within the Koh Bros Group.
Sale of land use rightsThe project to exploit the land use rights in China did not come to pass. In August 2007, Wealthplus caused the rights to be sold with Petroships’ consent. Wealthplus’ subsidiaries collectively received $19.4m in sale proceeds. From 2008, Petroships started agitating for its share of the profits of the investment, the recovery of its capital and the repayment of its $1.1m loan to Wealthplus. Disagreements arose between Alan Chan on one side, and Koh Teak Huat and Koh Keng Siang on the other. This led Alan Chan to resign from his Wealthplus directorship in September 2009.
Series of suits The disagreements spawned a series of successive suits that Petroships commenced against Megacity, Wealthplus and Koh Bros Group in different combinations. All were struck out. They are summarised as follows:
Preceding the last-mentioned suit (
Wealthplus’ solicitors replied to the aforementioned letter and stated that Wealthplus was the more appropriate party to address these queries. Wealthplus told Alan Chan that its directors would be pleased to answer his queries at its coming annual general meeting, which took place on 22 November 2011. At the meeting, the explanations offered were as follows:
Dissatisfied with this response, Petroships commenced Suit 867/2011 three days after the 2011 AGM. On 26 March 2012, the suit was struck out for being frivolous and vexatious; the assistant registrar found that Petroships had failed to adduce any evidence of a contractual relationship with Koh Bros Group. On 10 May 2012, Petroships’ appeal to...
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