Businessman loses $15m award after judgment reversed
SINGAPORE - An Indonesian businessman who was awarded US$12 million (S$15.1 million) in the High Court last year will get nothing after the Court of Appeal reversed the judgment last week.
Instead, it found that a critical document guaranteeing Mr Tjong Very Sumito the money from the sale of coal-mining concessions was "more likely than not" fabricated by him.
The apex court, comprising Chief Justice Sundaresh Menon and Judges of Appeal Chao Hick Tin and V. K. Rajah, also described the circumstances surrounding the 2006 deal between him, Singapore-based company Antig Investments and two offshore shell entities as "murky".
"As is often the case with such questionable transactions, when business relationships sour and disputes arise, the unravelling of the transactions presents considerable legal difficulties," wrote Justice Rajah, noting how long the High Court judgment was. That judgment was 190-pages long.
The case involved the sale of coal-mining concessions in East Kalimantan, Indonesia, which Mr Tjong purchased for US$1.2 million, to Antig for US$18 million.
In the agreement, US$6 million was paid to Mr Tjong directly.
The remaining US$12 million was to be paid to two offshore companies - Aventi Holdings and Overseas Alliance Financial - in the British Virgin Islands to help Mr Tjong save on tax.
He later changed his mind and told Antig to pay the US$12 million directly to him as well.
He presented the court with a document bearing the signature of Antig's then-managing director Richard Chan, guaranteeing that this would be done.
But Antig went on to pay the offshore companies instead, resulting in Mr Tjong taking the matter to court here, claiming he never received the money. In July last year, the High Court found Mr Chan liable for the US$12 million.
But during the appeal, Mr Chan's lawyers - Senior Counsel Ang Cheng Hock and Mr Nicholas Narayanan - argued that the guarantee document had been faked by Mr Tjong.
The court agreed, saying Mr Tjong could have done it by "superimposing the signature and the text".
It called the businessman as "unsatisfactory a witness as Mr Chan, if not more", highlighting three instances of "patent inconsistencies in his evidence" in its 106-page judgment released on Monday.
The court also said it was "unable to see the commercial logic or reason which could have prompted Mr Chan into signing the guarantee".
It pointed out Mr Chan, an employee, did not gain directly from the deal.
After throwing out the fake guarantee, the court relied on the original agreement between Mr Tjong and Antig.
The court found the US$12 million was never meant to be paid directly to Mr Tjong and two of his partners.
The court also cleared Mr Chan of misrepresentation in relation to two other deals involving Mr Tjong.
Get a copy of The Straits Times or go to straitstimes.com for more stories.