SINGAPORE - The founder of an education centre chain took a housewife to a geomancer in January last year, and he told her that she was suited to invest in education-related businesses.
A day later, Ms Xia Zhengyan, a Singapore permanent resident, signed an agreement to invest $1.5 million in Singaporean Geng Changqing’s Apple Plus School chain.
The geomancer also allegedly told Ms Xia that the success of her investment would depend solely on Ms Geng, and that Ms Xia should not interfere in the running of the business.
Ms Xia is now suing Ms Geng for allegedly misrepresenting the value of the Apple Plus brand.
The case is scheduled to be heard in the High Court on Nov 19.
In her statement of claim filed in April, Ms Xia, who is represented by Chia Wong LLP, said she got to know Ms Geng through a franchising exhibition at Marina Bay Sands in September 2011.
Ms Geng had founded Apple Plus School International in 2009, operating franchises of education centres offering enrichment classes for children under the name of Apple Plus School.
Ms Xia said she was given a report on the school which said it was collaborating with seven kindergartens, and had expansion plans in countries like Australia, China, and the Philippines.
The chain’s website lists 18 branches in Singapore and two in Malaysia.
Ms Xia claimed that she was told by Ms Geng that representatives from Vietnam and Indonesia had signed agreements to expand the Apple Plus group of schools in their countries.
She added that Ms Geng then persuaded her to buy over half of her shares in the group for $1.5 million.
In February last year, Ms Xia started going daily to the Apple Plus School branch in Serangoon.
She said she was assigned menial clerical tasks by Ms Geng and did not have any say in managing the schools.
In June last year, when Ms Geng transferred shares in Apple Plus School International to Ms Xia, she said she was shocked to learn that the paid-up capital of the company was just $50,000.
In November last year, Ms Geng contacted her to say she was unable to carry on with the business, and asked her to buy over all her shares, Ms Xia claimed.
Ms Xia claimed it was later that month that she realised Ms Geng had been misrepresenting to her the value of the schools through non-existent expansion plans.
In her defence, Ms Geng denied any misrepresentations, through her lawyers from Rajah and Tann LLP.
She also denied the representations alleged by Ms Xia during the meeting with the geomancer, which she said occurred in November 2011.
Ms Geng confirmed telling Ms Xia that she was in the midst of negotiating with Indonesian parties to open Apple Plus Schools there, that she had expansion plans in Australia, China and the Philippines, and was even in talks with representatives from Dubai.
Ms Xia was involved in these expansion plans and activities, she claimed.
Ms Geng said Ms Xia drew a monthly salary of $10,000 while with the company, conducted interviews to hire employees and managed the firm’s financial accounts.
She said it was Ms Xia who had told her in November last year that she no longer wanted to deal with the company’s affairs and wanted to sell her shares.
Ms Geng said they then agreed that Ms Xia would sell her shares to Ms Geng for $850,000, but Ms Xia has yet to carry out the agreement.
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