UOB Venture Investments Ltd v Tong Garden Holdings Pte Ltd and Others

CourtHigh Court (Singapore)
JudgeG P Selvam J
Judgment Date10 November 2000
Neutral Citation[2000] SGHC 228
Citation[2000] SGHC 228
Subject MatterShares,s 70(3) Companies Act (Cap 50),Remedies of preference shareholder,Joint and several liability of directors to redeem,Companies,Whether lack of profits to redeem valid excuse,Redeemable preference shares,Contractual obligation of company to redeem,Redemption at shareholder's discretion
Docket NumberSuit No 84 of 2000 (Registrar's
Plaintiff CounselNg Hwee Chong (Rodyk & Davidson)
Defendant CounselTan Cheng Yew (Tan Cheng Yew & Partners)
Published date19 September 2003
Date10 November 2000

: The march of events

The plaintiffs are a company incorporated in Singapore. Their business, as the name suggests, is venture capital investment.

They brought this action against four defendants. The first defendants, Tong Garden Holdings Pte Ltd (`the company defendants` or `the first defendants`) are a company incorporated in Singapore. They are a holding company of several subsidiaries engaged in the business of nut processing and packaging.

The second, third and fourth defendants were at all material times directors of the first defendants. By name they are Ong Leong Chuan, Ong Teck Chuan and Ong Heng Chuan. The second defendant ceased to be a director in November 1999. The second, third and fourth defendants were also at all material times shareholders of Tong Guan Food Products Pte Ltd (`TGFP`), a shareholder of the company defendants. The expression `director defendants` in this judgment shall refer to these three individual defendants.

By an investment agreement dated 12 December 1995 (`the Investment Agreement`) entered into between the plaintiffs, the four defendants and TGFP, the plaintiffs agreed to invest a sum of $3,500,000 in the company defendants by subscribing for redeemable convertible preference shares (`the preference shares`) in the capital of the company defendants. That amount was comprised of 1,000,000 redeemable convertible preference shares of the par value of $0.01 each (yielding $10,000) and a premium of $3,490,000.

Clause 6 of the investment agreement provided that the preference shares shall be redeemed at the investors` absolute discretion upon certain contingencies. One of them was the company defendants` non-listing on the Stock Exchange of Singapore Limited (`the SES`) by 31 December 1998. This dateline could be extended, inter alia, to 30 June 1999 provided that the investors were satisfied with certain circumstances.

It was also provided in the investment agreement that on the happening of an event of default the investors (ie the plaintiffs) had the absolute discretion by written notice to the company defendants and/or TGFP to require the company defendants to redeem the preference shares held by the investors. The event of default was the non-listing of the company defendants.

The completion of the redemption was to take place within six months from the date of the written notice issued by the investors to the company defendants or TGFP.

The price of the redemption of the preference shares arising from the event of default was the sum of $3,500,000 plus interest calculated with effect from 5 December 1995, or such other date as the parties may agree up to the date of redemption at the rate of 10% per annum on a yearly rests basis and compounded annually less any dividends paid to the investors. If the company defendants failed to redeem the preference shares on or before the stipulated completion date the investors were entitled, inter alia, to demand the payment of the redemption price payable from the director defendants. The director defendants jointly and severally covenanted in the investment agreement to pay the redemption price to the plaintiffs in exchange for the preference share certificates.

The company defendants were not listed as stipulated. In the result the plaintiffs issued a written notice dated 26 August 1999 to the company defendants for the redemption of the preference shares. They paid $1,000,0000 in November 1999 and $260,000 in March 2000. The company defendants failed to pay the balance of the redemption price and the interest on it within six months of the plaintiffs` notice, that is by 25 February 2000.

On 3 March 2000 the plaintiffs demanded payment of the redemption price due to them inclusive of the 10% per annum contractual interest rate. The defendants failed to comply with the demand.

The action

In the result the plaintiffs issued the writ in this action. They claimed against the company defendants a declaration that the first defendants were in...

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3 cases
  • Ng Geok Eng v Public Prosecutor
    • Singapore
    • High Court (Singapore)
    • 21 December 2006
    ......(R) 400; [1989] SLR 448 (refd) UOB Venture Investments Ltd v Tong Garden Holdings Pte Ltd ......
  • Arah Cipta Sdn. Bhd. (Company No : 228686-V) v Piala Gagasan (M) Sdn. Bhd. (Company No : 492251-D), 27-10-2010
    • Malaysia
    • High Court (Malaysia)
    • 27 October 2010
    ...of preferential shares to support its contention. The cases relied in UOB Venture Investments Ltd v Tong Garden Holdings Pte Ltd [2000] 3 SLR(R) 585, paras 19-21, at Australia Pty Ltd v Normandy Resources NL (1989) 1 ACSR 1, at 21; Mutual Life and Citizens Assurance Co Ltd v Mosgiel Ltd [19......
  • Salim Investments Pte Ltd v Sutrasegi Sdn. Bhd., 22-10-2015
    • Malaysia
    • High Court (Malaysia)
    • 22 October 2015
    ...First Defendant’s contention, the Plaintiff relied on the Singapore case of UOB Venture Investments Ltd v. Tong Garden Holdings Pte Ltd [2001] 1 SLR 362 wherein GP Selvam J said following at p. 367-368: “Under the contract the obligation to redeem on notice is absolute. When first defendant......

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