20 June 2018
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Oei Hong Leong sues for alleged share loss

Straits Times
13 Jun 2018
K.C. Vijayan

Tycoon seeks $15m as Raffles Education boss allegedly failed to sell shares by agreed date

Businessman Oei Hong Leong has sued the chairman of Raffles Education Corporation, Mr Chew Hua Seng, for some $15 million in alleged losses for breaching an agreement to find a buyer for Mr Oei's shares in the company.

The amount he is claiming is the difference between the agreed 44 cents a share sale price and the 33 cents a share price when trading closed on Nov 15 last year, the agreed deadline in the alleged deal.

Mr Chew, who is also the chief executive officer, has rejected the claims, countering that the note both parties signed on Oct 16 last year to find a buyer was a "friendly agreement" that was not legally binding or to be used in court.

A High Court pre-trial conference was held yesterday with Senior Counsels Davinder Singh and Alvin Yeo acting for the plaintiffs and defendant respectively.

Mr Oei, together with Oei Hong Leong Art Museum Ltd (OHLAML), who is the second plaintiff, collectively hold more than 136 million shares in Raffles Education, or about 12.88 per cent of the issued share capital, which he wanted to sell.

Home-grown Raffles Education, which started here in 1990, now operates some 24 colleges and universities in 22 cities across 13 countries, according to its website.

A key event in the case is an Oct 16 meeting between the men, when Mr Oei offered to buy out Mr Chew's share of the company he had founded as Mr Oei was unhappy with its performance and thought it could do better.

Mr Oei claimed that Mr Chew had declined to sell his shares as Raffles was a family asset and instead offered to procure a buyer for all of Mr Oei's and OHLAML's shares by Nov 15 at 44 cents a share.

Mr Oei claimed that the two agreed that if Mr Chew did so, Mr Oei would withdraw his notice calling for an extraordinary general meeting to remove Mr Chew as chairman of the company.

The requisition notice to the Raffles board of directors was withdrawn on Nov 15.

Each man held a handwritten copy - signed by both of them - of the record of the Oct 16 meeting.

Mr Chew did find a potential buyer, but the draft sale pact would bust the Nov 15 deadline as it provided for the buyer to pay for the shares in 10 consecutive equal weekly instalments from Oct 30.

Mr Chew, in defence papers filed, said Mr Oei wanted to exit from Raffles if he could not buy Mr Chew's shares and Mr Chew had told him he would try to find a willing buyer. He said it would be difficult, given the desired price was higher than what was being traded then.

Mr Chew claimed he did find a potential buyer from China and informed Mr Oei on Oct 26, but Mr Oei changed his mind two days later and declined the deal, according to defence papers filed.

Mr Chew said that even if the Oct 16 note was a legally binding agreement, which he denies, he did in fact fulfil his obligation to find a buyer for the shares before Nov 15.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.