Tycoon had $10b worth of contracts and knew the risks, bank says
By
Lee Su Shyan, Assistant Money Editor
Let the evidence unfold
'It is not unexpected that Citibank has denied Mr Oei's claims. What we need to do is to let the case come to court and let the evidence unfold.'
Lawyer Quek Mong Hua of Lee & Lee, who is representing Mr Oei Hong Leong (left)
BUSINESSMAN Oei Hong Leong had investment contracts totalling US$6.9 billion (S$10 billion) with banking giant Citigroup in February last year, the bank has revealed.
One of Singapore's wealthiest men and a Citigroup client of three decades, he claims he lost $1 billion through the bank's negligence and is suing the bank.
Vigorous defence
'As stated previously, we intend to defend the action vigorously.'
BUSINESSMAN Oei Hong Leong is suing Citigroup's private banking arm in the High Court alleging negligence and misrepresentation.
He claims that the bank repeatedly gave him an inaccurate picture of his trading exposure, which initially caused him to take on more positions than he would have otherwise done.
But, in defence documents filed at the High Court late on Thursday, the bank said he is an experienced, sophisticated investor who knew the risks of trading.
It denied that it was negligent in its dealings with him or that it gave inaccurate or misleading information.
Mr Oei has alleged misrepresentation and inaccurate information from the private banking arm of Citibank. This led him to have to close his trading positions at the height of the market volatility late last year, putting him badly into the red.
Citigroup's defence is the latest step in what some lawyers say could be a test case of the scope of private banks' responsibilities to clients.
One key element of the case involves the events leading up to massive foreign exchange losses that Mr Oei suffered.
In Mr Oei's dealings with the bank, he was provided with 'margin shortfall' figures. This is the sum he would need to top up, given a souring of investments.
According to Mr Oei, on Oct 22 last year, his margin shortfall was US$80 million. On Oct 27, it had jumped to US$90 million, and was more than US$200 million on Oct 28, but was down to US$28 million on Oct 29. He was later told that on Oct 27, the margin shortfall could have been as much as US$348 million.
Mr Oei claims the figures did not reflect the true market movements. He alleges the bank temporarily suffered a 'meltdown' in the accounting systems which tracked such shortfalls.
Read the full story in Saturday's edition of The Straits Times.
