Expat poached clients from own employer

An expatriate executive who set up a rival company to siphon clients from his long-time employer could face a payout of millions of dollars after losing a High Court case.

Mr Antonius Martinus Mattheus Schonk worked for Enholco, a Singapore firm offering spare parts and consultancy services to the oil and gas industry, for 23 years.

He was sacked in August 2012 after his bosses discovered he had set up the rival firm, and had taken steps to lure away the business and customers of Enholco when he was still its employee.

Mr Schonk, 62, a Dutch national based in Singapore, was sued by Enholco, which alleged that he had breached his fiduciary duties to the firm and had acted in a manner conflicting with its interests.

Enholco sought $1.7 million for losses incurred from his breach of duty and damages of $2.8 million to $4.2 million for loss of profits. The damages to be paid by Mr Schonk will be determined later.

In its judgment released last week, the High Court rejected Mr Schonk's claim that the firm he set up was done with the knowledge and consent of his bosses as part of a deal.

Mr Schonk, defended by lawyer See Chern Yang, denied the company's claims and also alleged he had been wrongfully dismissed.

He argued that his company was set up to take over one division in Enholco known as Unit 2, and there was a verbal deal in 2001 made with Enholco's managing director, Mr Haank Gerhard, 70, that he would take over all the business and assets of Unit 2.

In exchange, Mr Schonk would relieve Enholco of the costs of operating Unit 2.

Enholco, represented by lawyers Lau Teik Soon and K. Chandra Sekaran, countered that since 2001, Mr Schonk had never once claimed that Enholco had ceded, sold or transferred Unit 2 to him.

Justice Choo Han Teck found "telling" evidence which showed that Mr Schonk's explanation was a "late idea" in the legal proceedings.

The judge noted that although Mr Schonk was in charge of Unit 2, he kept Mr Gerhard fully informed of the business and monthly expenses of Unit 2, which clearly contradicted his claim that the unit belonged to him.

"However one looks at the evidence, (the Unit 2 agreement) is devoid of clear detail and unsupported by the conduct of the parties over the years," said Justice Choo.

He found that Mr Schonk not only started a rival firm but also took steps to lure away business while still working for Enholco.

"I find that throughout the years... Mr Schonk was the party whose conduct was surreptitious and not straightforward.

"I am also sceptical about his explanations as to why he deleted records from the company's computers. It was a deliberate act designed to comprehensively remove any trace of evidence against Mr Schonk," he said.

vijayan@sph.com.sg

This article was first published on February 14, 2015.
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