(SINGAPORE) THE legal spat between Eng Wah Organisation's patriach and a former Nominated Member of Parliament (NMP) has returned to the High Court.
Cinema magnate Goh Eng Wah, 85, is suing former NMP Robert Chua and four others for more than $1 million in alleged payout shortfalls from a firm they once jointly owned.
The case had been part-heard in November when Mr Goh and his daughter, Eng Wah's managing director Goh Min Yen, took the stand. It has since resumed in the High Court, with witnesses for the defendants - including Mr Chua - being scrutinised by Senior Counsel Davinder Singh of Drew & Napier, who now represents Mr Goh.
Mr Goh is suing Mr Chua, Mr Chua's brothers - Philip and Charlie Chua - Daikin Airconditioning Singapore and its Japanese parent Daikin Industries for allegedly not paying him the full share of Daikin Singapore's profits due to him. Mr Goh claimed that they owe him $1.09 million.
The case traces its roots all the way back to 1972, when the cinema tycoon set up Daikin Airconditioning Singapore with Chua Joon Nam, Mr Robert Chua's late father. Daikin Airconditioning Singapore became the sole agent for Daikin air-conditioners here.
In 1981, Japan-based Daikin Industries took a majority stake in the company, and the parties involved entered into a shareholders incentive scheme which provided for a certain portion of the company's net profits - 15 per cent for the first $1 million and 7.5 per cent thereafter - to be distributed to them.
The agreement would confer a fixed one-third share of the profits on Mr Goh, another one-third share to Mr Chua Joon Nam, with the last one-third being allocated among local directors as Mr Chua Joon Nam saw fit.
Mr Goh said that he received his share of the profit incentives until 1991, two years after Mr Chua Joon Nam passed away in 1989. He claimed that he was gradually allocated less than his share of the profit incentives from 1991 when Mr Robert Chua took over his father's role as the company's executive chairman and also the role of disbursing the profits under the incentive scheme.
Mr Goh said that he found out about the alleged discrepancy in 2002, when Daikin Industries took steps to buy out the shares of the Chuas and tried to remove them as directors. The Chuas filed an action for oppression against Daikin Industries and Daikin Airconditioning Singapore - and eventually received $7 million as compensation for their loss of office when the case was settled.
When Mr Goh made inquiries about this settlement, he discovered documents which showed that he was allocated less than his rightful entitlement, while the three Chua brothers were receiving more and more each year.
Initially represented by lawyers from Cheo, Yeoh & Associates, Mr Goh is now being represented by Mr Singh, Senior Counsel Hri Kumar and Shobna Chandran from Drew & Napier. Daikin Industries and Daikin Airconditioning Singapore, the first two defendants, have said that they left it to the Chuas to take care of the profit allocation.
Mr Robert Chua and his brothers claimed that Mr Goh was only a beneficiary of the incentive scheme, and not a party to it, and had no rights or entitlement under the agreement.
Mr Robert Chua also claimed that he had informed Mr Goh, sometime in 1990 or 1991, that the incentive scheme had been modified such that profits were allocated according to each party's contribution. Mr Chua contended that as Mr Goh was no longer contributing in the 1990s, he was allocated less and less.
But in his cross-examination of Mr Robert Chua last week, Mr Singh put it to him that that was not the position he adopted when he took action against the Daikin companies in 2002. Then, Mr Robert Chua had said that Mr Goh, the Chuas and the two Daikin companies were all parties to the incentive scheme - which was different from his argument now that only the Daikin companies were parties to the incentive scheme.
'When you were sued by (Mr Goh), you decided to avoid liability and create this fiction that there was this separate agreement between (Daikin Industries and Daikin Airconditioning Singapore) . . . you had to find a way to re-craft your position in the hope that nobody would pick it up,' Mr Singh said.
Mr Goh maintained that he was a party to the incentive scheme, as Daikin Industries had come up with the profit-sharing agreement as a 'sweetener' for Mr Goh to agree to allow the Japanese firm to take a majority stake. But Mr Goh had not bothered to meticulously check the allocation of profits as he saw Mr Chua Joon Nam as an 'old friend' with whom he had a 'relationship of trust'.
Mr Singh also argued that Mr Robert Chua's contention that the incentive scheme had been varied was inconsistent with his position that the incentive agreement was all along based on contribution. Also, when pressed by Mr Singh, Mr Robert Chua was unable to say exactly when the scheme was changed.
Mr Robert Chua was also unable to explain the basis on which he re-allocated his father's share after his death among himself and his brothers. Mr Singh suggested that he was not only taking Mr Goh's share but also that of his father's to line his pockets and that of his brother Philip and later Charlie, at the expense of Mr Goh.
The trial continues today with Mr Philip Chua on the stand. He will be cross-examined by Drew & Napier's Mr Kumar.
The Chuas are represented by Thio Ying Ying of Kelvin Chia Partnership. Daikin Industries is represented by Anna Oei of Tan, Oei & Oei LLC, while Daikin Airconditioning Singapore is represented by Sean Lim of Hin Tat Augustine & Partners.
This article was first published in The Business Times on May 12, 2008
