Tycoon Ong Beng Seng and wife sued by latter’s siblings over alleged share swap agreement

Tycoon Ong Beng Seng (left) and his wife Christina are embroiled in a high-stakes legal battle with the latter's brother Peter Fu Chong Cheng and sister Juanita over hundreds of millions of dollars of assets.
Tycoon Ong Beng Seng (left) and his wife Christina are embroiled in a high-stakes legal battle with the latter's brother Peter Fu Chong Cheng and sister Juanita over hundreds of millions of dollars of assets.PHOTOS: ST FILE

Ong Beng Seng and wife being sued by latter's siblings over alleged share swap agreement

Tycoon Ong Beng Seng and his wife Christina are embroiled in a high-stakes legal battle with the latter's brother Peter Fu Chong Cheng and sister Juanita over hundreds of millions of dollars of assets after talks to effect a "parting of ways" collapsed.

The case centres on the Fu siblings wanting the Ongs to honour an alleged share swap agreement reached in May 2014.

This would involve the two Fu siblings transferring their stake of 83.4 million shares, or 16.3 per cent, of Hotel Properties (HPL) to the Ongs.

The Ongs, in turn, would transfer their 40 per cent stake, totalling about two million shares, in Kuo International to them.

The share swap would allow the Fus to exit HPL and Mr Ong to get out of Kuo, resulting in a parting of ways between the Fus and the Ongs.

The Ongs, in their defence papers, maintained there was no legally binding agreement. They also said that the deal would be unfair to Mr Ong as the Kuo shares they would transfer are worth about $500 million more than the HPL shares they would receive.

The parties involved are among Singapore's wealthiest families.

Mr Ong, 70, is managing director of Singapore Exchange-listed property giant HPL. He and his 69-year-old wife are estimated by Forbes to have a net worth of US$1.8 billion (S$2.4 billion).

Mr Ong, whose firm HPL owns the Four Seasons and Hilton hotels here, is known for bringing the Formula One Grand Prix to Singapore.

Mrs Ong founded the Club 21 fashion group and is credited with introducing Asia to haute couture brands such as Prada, Bulgari and Giorgio Armani.

Dubbed the Queen of Bond Street in the 1990s by the British press, she is also behind the exclusive luxury hotel resort chain Como.

The couple are being sued by her siblings, Mr Fu, 65, and Ms Fu, 61.

Mr Fu's estimated net worth of US$625 million comes mostly from oil trading and investment holding firm Kuo International, set up by his late father, Mr Peter Fu Yun Siak.

Kuo International was founded in 1963 by Mr Peter Fu Yun Siak as a general commodities trader. It expanded into oil trading in 1976.

Mr Ong married Mrs Ong in 1972 and, in February 1978, became Kuo International's managing director. According to the Ongs, it was Mr Ong and his father-in-law who started and grew the business in Kuo International.

Within two years, the Kuo group of companies had funds of $45 million available for the acquisition of Hilton Hotel. In 1980, HPL was incorporated for this purpose.

Mr Ong's defence mentioned a letter written by Mr Peter Fu Yun Siak to his wife and children shortly before he died in 2005, describing Mr Ong as a "loyal, trustworthy and capable" business partner who came into the Fu family as a "dynamic young man and has flourished beyond imagination".

According to the Fu siblings, Mr Ong began managing HPL in 1981 and left the Singapore office of the Kuo Group. The Fu court papers said it was the younger Mr Fu's stewardship that made Kuo a successful player in the regional oil business.

However, court documents point to growing discord.

The Fu siblings said that by the mid-1980s, their father began having concerns about potential conflicts between Mr Ong's duties as HPL managing director and his personal interests.

These concerns began when Mr Ong bought two buildings in Raffles Place - Shell House and Change Alley - privately, without involving HPL.

But the Ongs said it was Mr Fu who, in the mid-1980s, objected to investments that Mr Ong initiated for the Kuo group of companies. They said Mr Ong and Mr Peter Fu Yun Siak partnered in several deals, including the acquisition of the former Natsteel, in their private capacity.

Most recently, in April 2014, Mr Ong launched a takeover of HPL, allegedly without any prior notice to Mr Fu and Ms Fu, the siblings said.

Mr Ong's move was seen as an "absolute betrayal of the legacy of the late Mr Fu, who had made Mr Ong a 40 per cent shareholder in the Kuo Group and, through that, HPL", the suit said.

After the takeover was announced, the Fu siblings claimed Mr Ong had indicated at a meeting on May 4, 2014, that he "felt trapped in Kuo, could not afford to have the allegations about how he ran HPL pursued, and was willing to disentangle 'on any terms' and 'without the need for any valuation' that Peter and Juanita may set".

Mr Fu then proposed the share swap arrangement.

The Ongs said the HPL takeover was launched as a "defensive measure precipitated by aggressive attempts by Peter to control and manipulate the Fu siblings' stake in HPL".

They also insisted that Mr Ong was "amenable to the idea of a share swap". But they added that he also wanted a "comprehensive settlement of 'everything', that is,... the unwinding and distribution of the parties' major business interests and assets in Singapore and abroad".

But after negotiations broke down, Mr Ong applied this year to wind up an investment company of the Kuo Group.

He said the actions by the Fu siblings had deprived him of annual dividends that had been declared over the years.

The winding-up move by Mr Ong prompted the Fu siblings to file a lawsuit and apply for an injunction in May this year to block his efforts to liquidate the company.

A version of this article appeared in the print edition of The Straits Times on July 04, 2016, with the headline 'Battle with tycoon over 'parting of ways''. Print Edition | Subscribe