CEO joins family feud to sue mother over $200m in assets

CEO of EnGro, Mr Tan Cheng Gay.
CEO of EnGro, Mr Tan Cheng Gay.PHOTO: THE BUSINESS TIMES

He had no wish to sue mum but ended up in fray after he was listed as defendant

A company CEO declined to join siblings who sued their mother over assets believed to be worth more than $200 million, but was forced into the fray after his sister and mother named him as a defendant in the case.

Mr Tan Cheng Gay, 68, chairman and chief executive of public-listed cement company EnGro Corporation "had no desire to sue his own mother", noted Justice Vinodh Coomaraswamy, who added that the case was "sadly typical of many cases involving a family business where the patriarch's death was followed by a split in the family".

The judge's views prefaced his decision grounds earlier this month in the case in which Cheng Gay's three younger siblings sued their sister, Dr Tan Choo Suan, 71, and mother, Madam Ng Giok Oh, 94, for a declaration that the siblings were the owners in equity of certain assets.

Mother and daughter counter- sued, seeking a declaration that none of the assets sought belonged to the four siblings and, instead, the bulk held by the daughter belonged to the patriarch and fell to be given to charity under the joint will.

Cheng Gay was added as the fourth defendant to their countersuit. The judge noted that Cheng Gay spent his entire working life in EnGro and was "instrumental" in establishing and developing it.

The main action involved 2.54 million shares in Afro-Asia Shipping (AAS) in Choo Suan's name, 2.66 million in Madam Ng's name and 1.75 million in Afro-Asia International Enterprises (AAIE) in Choo Suan's name.

The orphaned and rags-to-riches patriarch Tan Kiam Toen left China in 1935 and worked his way up in this region, trading in commodities and venturing successfully.

He set up the family flagship AAS in 1961, which, four years later, bought a building renamed Afro- Asia Building in Robinson Road.

In 1968, he gave each of his five children 40 new shares in AAS. Upon his death at age 89 in 2008, the siblings each argued that they were absolute owner, while Choo Suan countered that they held the shares in trust for the patriarch and his estate. Between 1986 and 2008, a series of transfers occurred that led to Madam Ng and Choo Suan being the only two AAS shareholders.

Justice Vinodh found after the 60-day hearings that both Choo Suan and Madam Ng held shares in trust for the Tan family members in proportion to their beneficial interest in the Tan family's AAS shares.

He found that the patriarch had gifted the shares to the siblings and they had no intention of parting with them before they were transferred to Choo Suan and Madam Ng. Both were ordered to account for the dividends and interests on them. The judge also ruled that Choo Suan held the AAIE shares in trust for the Tan family members in proportion to their beneficial interest in the Tan family's shares in AAS.

But he held that the siblings had no interest in the 1.419 million EnGro shares owned by Choo Suan, who separately was also held to own the patriarch's Katong property.

The judge noted that the parents' wish had been that their descendants "should... live in harmony, and that no dispute or litigation should arise regarding (their) residuary estate. Mr Tan's wish was not to be", wrote Justice Vinodh.

Senior Counsel (SC) Lok Vi Ming and lawyer Melissa Thng represented Cheng Gay, while SC Lee Eng Beng defended Choo Suan. Four other sets of lawyers, including three SCs, represented the rest.

A version of this article appeared in the print edition of The Straits Times on December 19, 2015, with the headline 'EnGro CEO dragged into $200m family feud'. Print Edition | Subscribe