Oei Hong Leong sues Raffles Education over proposed stake purchase
Mr Oei is seeking a declaration that the plaintiffs are entitled to inspect certain originals or be provided with certain documents set out in paragraph 2.1 of REC's Sept 8 circular.
Raffles Education Corp (REC) substantial shareholder Oei Hong Leong has sued the company in relation to its plan to raise its stake in a Chinese property firm.
Mr Oei, who owns 13.05 per cent of REC, and his firm Oei Hong Leong Art Museum have commenced an originating summons in the High Court of Singapore, the mainboard-listed private education provider said late on Wednesday night. Mr Oei is seeking a declaration that the plaintiffs are entitled to inspect certain originals or be provided with certain documents set out in paragraph 2.1 of REC's Sept 8 circular.
The circular was for the proposed acquisition of a 35.9 per cent interest in REC's joint venture (JV) Langfang Hezhong Real Estate Development for 254 million yuan (S$49.2 million) in cash. An REC subsidiary held a 34.1 per cent interest in the Chinese property firm as at July 16, while Langfang Heying Real Estate Development owned the remaining 65.9 per cent. The circular references documents that were not available for inspection before an extraordinary general meeting (EGM) on Wednesday.
REC on Tuesday said that a summary of the relevant terms of those agreements was already disclosed in the circular, and that their material terms were disclosed in its previous announcements. The plaintiffs are also seeking an injunction against the company from proceeding with any further acts in relation to the stake purchase. They had earlier commenced a summons for interim injunctions to stop the EGM, but this was dismissed by the court.
Shareholders, at the EGM, approved the proposed acquisition with votes of 78.6 per cent for and 21.4 per cent voting against.
REC said it intends to defend Mr Oei and his firm's originating summons "vigorously". It added that it was advised that the originating summons is without merit and groundless, particularly given the court's dismissal of the summons for interim injunctions.
Mr Oei's latest litigation comes after he sued REC founder Chew Hua Seng for allegedly reneging on a promise to secure a buyer for Mr Oei's REC shares at 44 Singapore cents apiece, based on a handwritten "confidential agreement" dated Oct 16, 2017, signed by the two men.
The High Court dismissed the lawsuit against Mr Chew in February. In August, the Court of Appeal dismissed Mr Oei's appeal against the judgment.
Mr Oei had separately made several unsuccessful attempts to call for an EGM in a bid to, among other things, oust Mr Chew as chief executive and chairman.
Shares of REC fell 0.5 Singapore cent or 3.9 per cent to close at 12.5 cents on Thursday.
Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.