Telemedia Pacific Group Ltd and another v Yuanta Asset Management International Ltd and another
| Jurisdiction | Singapore |
| Judge | Patricia Bergin IJ |
| Judgment Date | 30 June 2016 |
| Neutral Citation | [2016] SGHC(I) 3 |
| Date | 30 June 2016 |
| Docket Number | Suit No 2 of 2015 |
| Published date | 23 June 2018 |
| Plaintiff Counsel | Paul Tan, Yam Wern-Jhien, Josephine Chee, Wong Shi Yun and Pradeep Nair (Rajah & Tann Singapore LLP) |
| Defendant Counsel | Hee Theng Fong, Toh Wei Yi, Nicklaus Tan and Jaclyn Leong (Harry Elias Partnership LLP) |
| Hearing Date | 22 April 2016,29 February 2016,25 February 2016,22 February 2016,26 February 2016,23 February 2016,24 February 2016 |
| Court | International Commercial Court (Singapore) |
| Subject Matter | Contract,Remedies,Conspiracy,Equitable compensation,Equity,Conversion,When arising,Breach,Fiduciary relationships,Tort,Duties |
These proceedings were transferred into the Singapore International Commercial Court, by consent, on 15 April 2015. They arise from the breakdown of a commercial joint venture relationship between international parties, the agreements in respect of which were executed in Shenzhen in the People’s Republic of China (“PRC”) and in Hong Kong Special Administrative Region (“Hong Kong SAR”) in November 2010.
The first plaintiff, Telemedia Pacific Group Limited (“TPG”), registered in the British Virgin Islands (“BVI”), operates a satellite communications business in Hong Kong. The second plaintiff, Mr Hady Hartanto (to whom I will refer as “the plaintiff”) is a director of TPG and a citizen of Hong Kong SAR. The first defendant, Yuanta Asset Management International Limited (“Yuanta”), is also registered in the BVI. The second defendant, Mr Yeh Mao-Yuan (known as “Jack Yeh”) (to whom I will refer as “the defendant”) is the sole director of Yuanta, resides in China and travels on a Dominican passport.
The joint venture was to carry out securities and other diverse investments through a special purpose vehicle, another BVI registered company, Asia Energy Management Ltd (“AEM”), using funds from loan facilities secured by shares in Next Generation Satellite Communications Limited (“NexGen”) (formerly known as Ban Joo & Company Limited (“Ban Joo”)), a company listed on the Singapore Exchange (“SGX”). Although some of the communications and discussions involve reference to shares in Ban Joo, I will refer to the shares as “NexGen” shares.
In summary the plaintiffs claim that in breach of contract and in breach of their fiduciary obligations, the defendants disposed of a large number of the NexGen shares that were to be pledged as security for the loans obtained for joint venture investments. The defendants deny these claims and counterclaim that the plaintiffs unilaterally dissipated the joint venture loan funds for their personal use.
The plaintiffs also claim that the defendants wrongfully and with intent to injure them by unlawful means, conspired and combined together to defraud the plaintiffs and to conceal the fraud and the proceeds of the fraud from them. The plaintiffs claim that the defendants concealed the disposal and/or sale of 60m NexGen shares in August 2011 and 225m shares in October 2011, the proceeds of which it is alleged the defendant took for his personal use.
The plaintiff and the defendant have been involved in previous litigation in relation to some of the joint venture transactions (“the Earlier Proceedings”). The plaintiff sued Crédit Agricole (Suisse) SA (now known as CA Indosuez (Switzerland) SA) (“Credit Agricole), with which the parties held accounts, for allegedly acting without authority in October 2011 in transferring 225m NexGen shares out of TPG’s account with Crédit Agricole into Yuanta’s account (or that of its subsidiary) with Crédit Agricole. Crédit Agricole joined the defendant as third party. The plaintiff’s claims were dismissed as were Crédit Agricole’s claims against the defendant:
Although they have been able to agree on a chronology of events the parties are at issue on many aspects of their relationships. In the circumstances it is necessary to refer in some detail to the background that has led the parties to this Court.
BackgroundIn August 2008 TPG acquired 51% of the shares in NexGen. At the same time, TPG acquired a number of warrants entitling it to buy NexGen shares for S$0.03 per share. The plaintiff also became the Executive Deputy Chairman of NexGen at about the time of the transaction.
From 2008 the plaintiff was a 75% shareholder in TPG and his business partner at the time, Mr Hardi Koesnadi, held the remaining 25% of the shares through his company, Telemedia Pacific International Inc (“TPI”). In August or September 2010 the plaintiff and Mr Koesnadi decided to part ways and, as a result, TPI’s 900m NexGen shares were available for purchase.
Initial discussions between the plaintiff and the defendantHaving met only socially in either 2003 or 2005, the plaintiff and the defendant met again in 2010. Although the parties are at issue as to the location of the meetings they are agreed that in meetings during the period July to October 2010 they discussed their respective businesses and potential investment opportunities. The plaintiff claimed that the defendant introduced himself as being from a company with the Chinese name for “Yuanta Financial Holdings”, which the plaintiff understood was a large and reputable Taiwanese securities house. The defendant denied that he introduced himself in this manner.
The plaintiff claimed that in one of their discussions in July or August 2010 the defendant tried to convince him to invest in Scorpio East Holdings Limited (“Scorpio East”), a company involved in film production and distribution. The defendant denied this and claimed that it was the plaintiff who was interested in investing in Scorpio East. The plaintiff’s affidavit evidence is that at subsequent meetings with the defendant in August to September 2010 they decided to jointly acquire up to a 30% stake in Scorpio East. The defendant claimed that although he was initially “in the loop” about investing in Scorpio East, he did not receive the final terms and conditions about the transaction and later learned that the plaintiff had gone ahead on his own. It will be necessary to return to the Scorpio East investment in more detail later because the parties are at issue as to whether it was a joint venture investment (as the plaintiffs claim) or a personal investment of the plaintiff, through TPG (as the defendants claim).
The plaintiff claimed that at one of the meetings in July or August 2010 when he informed the defendant of TPG’s recent acquisition of NexGen, the defendant expressed keen interest to collaborate with him and claimed that he was involved with several large Taiwanese funds which he could persuade to invest in NexGen.
The plaintiff claimed that during these discussions he and the defendant agreed that Mr Koesnadi’s/TPI’s 900m NexGen shares would be purchased by Yuanta for S$0.05 each (S$45m in total) and that when the value of the shares increased, Yuanta would then on-sell the shares to three Taiwanese funds. The defendant denied this agreement and claimed that it was initially intended that the NexGen shares would be transferred to Yuanta, for the purposes of securing third party loans and would be held on behalf of Yuanta by the three funds. The defendant claimed that each fund would hold less than 5% of the total share capital of NexGen “in order to avoid having to make an announcement” on the SGX “for a change in substantial shareholding”.
In a meeting in October 2010 the plaintiff and the defendant agreed to undertake the joint investment project of making investments through the joint venture company (later to become AEM) utilising loan funds secured with NexGen shares. The defendant claimed that because NexGen was on the “watch-list” of the SGX and banks were “not keen” to accept its shares as security for financing, it was agreed that TPG would provide the NexGen shares to Yuanta to pledge as security for loans in Yuanta’s name because the defendant and Yuanta enjoyed a good credit rating and reputation. It was also agreed that Yuanta would then provide the loan funds to the joint venture company.
The plaintiff claimed that it was agreed that TPG would transfer NexGen shares to a “Yuanta Trust Account” to be pledged as collateral to Crédit Agricole, and Yuanta would receive loans from Crédit Agricole amounting to 50% to 55% of the market value of the shares. The defendant’s evidence was that the loan moneys were to be obtained from a third party lender, not from Crédit Agricole. The defendant denied that Yuanta’s account with Crédit Agricole was a “trust account” and claimed it was an account that was opened “well before” his relationship with the plaintiff and TPG.
The plaintiff’s affidavit evidence was that during their discussions he and the defendant agreed to a joint arrangement in which: (1) TPG would give 300m warrants in NexGen to AEM (consisting of 225m from the plaintiff and 75m from Mr Koesnadi); (2) the funds to exercise the warrants would be sourced from a further loan from Crédit Agricole, secured by the shares to be received upon exercising the warrants; (3) Yuanta would buy 900m shares in NexGen from TPG, funded by an advance from AEM’s loan moneys to Yuanta, which would be repaid when the shares were on-sold to the three Taiwanese investor funds; and (4) AEM would acquire a 29% stake in Scorpio East (valued at S$4.5 – S$5m).
The plaintiff meets Mr GohMr Goh Teck Wee (known as Brian Goh) was employed by Credit Agricole as a director, Private Banking, between August 2010 and March 2012. Mr Goh met the defendant in 2006 when he became his relationship manager at ABN AMRO. When Mr Goh moved to Credit Agricole in August 2010 the defendant became a client of Credit Agricole.
It was in about October 2010 that the defendant introduced the plaintiff to Mr Goh. The plaintiff claimed that at this meeting the defendant explained their plans to make joint investments through a joint venture company and for it to secure credit facilities from Crédit Agricole in its name for the purpose of such joint investments. The plaintiff claimed that he and the defendant informed Mr Goh that they were looking to secure credit facilities to the tune of about S$100m to fund the joint venture activities and that TPG and Yuanta would each pledge an equal amount of NexGen shares as security. The plaintiff claimed that Mr Goh subsequently advised that it would be difficult for the joint venture vehicle to secure credit facilities of such a large...
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