CEF v Goh: Breach of Warranty, Misrepresentation & Conspiracy in Seng Hup Shares Acquisition
In 2001, the Singapore High Court heard claims and counterclaims arising from Ricky Goh Chin Soon's (RG) purchase of shares in Seng Hup Corporation Bhd. CEF (Capital Markets) Ltd and CEF (Singapore) Ltd (CEF) sued RG, Danny Goh Teck Beng (DG), Grandlink Group Pte Ltd, and City Square Development Pte Ltd for repayment of a US$25 million loan. RG and City Square sued Dato Sng Chee Hua for breaches of warranties, misrepresentations, and conspiracy to defraud in the acquisition of Seng Hup shares. RG also counterclaimed against Flora Ong, Leong Siew Loon, and CEF for similar allegations. The court gave judgment against DG and dismissed the claims by RG and City Square.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment against Danny Goh Teck Beng; claims by Ricky Goh Chin Soon and City Square Development Pte Ltd dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case involving claims of breach of warranty, misrepresentation, and conspiracy related to the acquisition of Seng Hup shares.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Goh Chin Soon | Defendant, Appellant | Individual | Claims Dismissed | Lost | |
| Goh Teck Beng | Defendant | Individual | Judgment Entered | Lost | |
| CEF (Capital Markets) Ltd | Plaintiff, Respondent | Corporation | Counterclaims Dismissed | Won | |
| CEF (Singapore) Ltd | Plaintiff, Respondent | Corporation | Counterclaims Dismissed | Won | |
| Grandlink Group Pte Ltd | Defendant | Corporation | Claims Dismissed | Lost | |
| City Square Development Pte Ltd | Defendant, Appellant | Corporation | Claims Dismissed | Lost | |
| Sng Chee Hua | Defendant, Respondent | Individual | Claims Dismissed | Won | |
| Flora Ong | Plaintiff, Respondent | Individual | Counterclaim Dismissed | Won | |
| Leong Siew Loon | Respondent | Individual | Counterclaims Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| S Rajendran | Judge | Yes |
4. Counsels
4. Facts
- Ricky Goh Chin Soon (RG) discussed purchasing 8 million shares in Seng Hup Corporation Bhd with Dato Sng Chee Hua.
- Flora Ong acted as the broker for both RG and Sng.
- CEF (Capital Markets) Ltd expressed interest in financing the purchase of Seng Hup shares.
- The purchase of 8 million shares was to be effected in two tranches.
- City Square Development Ltd was used to effect the purchase of the first tranche.
- Formal documentation for the loan was signed on 26 July 1997.
- City Square failed to keep up with some of the payments to CEF.
- RG turned to Andrew Quek to finance the purchase of the second tranche of shares.
- RG appointed his nominees to the Board of Seng Hup after obtaining control of the company.
- Seng Hup appointed M/s Arthur Andersen to conduct a position audit on Seng Hup.
- RG claimed he was misled by Flora, Sng, Leong and CEF into buying the Seng Hup shares.
- CEF sued RG, DG, Grandlink Group Pte Ltd and City Square for the return of the US$25 million loan.
- RG and City Square sued Sng for breaches of warranties, misrepresentations and conspiracy to defraud.
5. Formal Citations
- CEF (Capital Markets) Ltd and Another v Goh Chin Soon and Others, Suit 849/1998, Suit 24/1998, Suit 822/1999, [2001] SGHC 342
6. Timeline
| Date | Event |
|---|---|
| Ricky Goh Chin Soon entered into discussions with Dato Sng Chee Hua for the purchase of 8 million shares in Seng Hup Corporation Bhd. | |
| Ricky Goh Chin Soon confirmed to Flora Ong that he was prepared to pay RM12 per share for Seng Hup shares. | |
| Crossing of the first tranche of Seng Hup shares took place. | |
| CEF issued a letter to Lum Chang Securities Pte Ltd undertaking to make full payment for the shares by 27 June 1997. | |
| Formal documentation for the loan was signed by the parties. | |
| CEF made a formal written demand for outstanding fees of US$328,938.20. | |
| CEF drew attention to cl 17 of the Facility Agreement and cautioned City Square that failure to pay outstanding fees was an event of default. | |
| CEF informed City Square that it was cancelling all its commitments to City Square. | |
| Ricky Goh obtained control of the second tranche of Seng Hup shares. | |
| Arthur Andersen produced a position report on the financial affairs of Seng Hup as at 30 September 1997 (AA Report). | |
| Flora Ong sued Ricky Goh Chin Soon for her 2% commission in Suit No. 24/98. | |
| Grandlink Group Pte Ltd issued a cheque for US$256,713.19 in favour of CEF which was dishonoured. | |
| Interest on US$25 million amounted to US$1,200,463.19. | |
| CEF sued Ricky Goh Chin Soon, Danny Goh Teck Beng, Grandlink Group Pte Ltd and City Square in Suit No. 849/98. | |
| Ricky Goh Chin Soon and City Square sued Sng Chee Hua in Suit No. 822/99. | |
| Seng Hup was placed under Dhanaharta. | |
| Consent was produced, signed by Ricky Goh Chin Soon as CEO and Director of Seng Hup. | |
| Ricky Goh Chin Soon admitted that he had purchased the second tranche in the name of Andrew. | |
| Ricky Goh Chin Soon, City Square and Grandlink admitted the claims made by CEF and judgment was entered against them. | |
| Ricky Goh Chin Soon consented to judgment being entered against him for the sum of RM888,000. | |
| Decision Date |
7. Legal Issues
- Breach of Warranty
- Outcome: The court found insufficient credible evidence to conclude that Sng had breached any of the terms in the letter of warranty.
- Category: Substantive
- Misrepresentation
- Outcome: The court was not satisfied that the alleged representations had been made or that RG had relied on them in deciding to buy the Seng Hup shares.
- Category: Substantive
- Conspiracy to Defraud
- Outcome: The court found the allegation of conspiracy against CEF, Leong, Flora, and Sng to be without merit.
- Category: Substantive
- Negligence
- Outcome: The court found that Leong did not give any negligent advice to RG relating to RGs commercial decision to buy the Seng Hup shares.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Return of Loan
- Compensation for Losses
9. Cause of Actions
- Breach of Contract
- Fraudulent Misrepresentation
- Negligence
- Breach of Warranty
- Conspiracy
10. Practice Areas
- Commercial Litigation
- Banking and Finance
- Corporate Law
11. Industries
- Finance
- Investment
- Lighting
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Teo Geok Fong v Lim Eng Hock | High Court | Yes | [1996] 3 SLR 431 | Singapore | Cited for the principle that the mere fact that the credit of a witness has been impeached does not necessarily mean that all his evidence will be disregarded. |
| Caparo Industries plc v Dickman & Ors | House of Lords | Yes | [1990] 2 AC 605 | England and Wales | Cited regarding the imposition of a duty of care. |
| Hedley Byrne & Co Ltd v Heller & Pnrs Ltd | House of Lords | Yes | [1964] AC 465 | England and Wales | Cited for principles relating to negligent misstatement and duty of care. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Seng Hup Corporation Bhd
- Letter of Warranty
- Due Diligence
- Tranche
- Facility Agreement
- AA Report
- Commission
- Misrepresentation
- Conspiracy
- Negligence
- Front-End Fee
- Agency Fee
- Dhanaharta
15.2 Keywords
- Seng Hup
- shares
- acquisition
- breach of warranty
- misrepresentation
- conspiracy
- negligence
- loan
- commission
- CEF
- Goh Chin Soon
- Flora Ong
- Leong Siew Loon
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Banking and Finance | 70 |
| Contract Law | 60 |
| Company Law | 50 |
| Fraud and Deceit | 40 |
| Misrepresentation | 40 |
| Commercial Disputes | 30 |
| Securities Trading | 30 |
16. Subjects
- Contract Law
- Securities Law
- Banking Law
- Finance Law
- Civil Litigation