Ex-director at Lee Kim Tah-Woh Hup JV sued amid allegations former CapitaLand staff took bribes in India
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The breach of duties relate to CapitaLand's project in India, as well as other transactions, said court documents seen by The Business Times.
PHOTO: ST FILE
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SINGAPORE - A lawsuit filed by construction player Lee Kim Tah (LKT) against one of its former directors for alleged breach of duties has surfaced allegations that several former employees of CapitaLand in India had received corrupt payments in relation to work on a project there.
The breach of duties relates to CapitaLand’s project in India and other transactions, according to court documents seen by The Business Times.
CapitaLand said it investigated the matter when it came to light in 2023, and went to the police.
“Given the ongoing investigation, we are unable to comment further on the case,” it said, stressing that it is “fully committed to conducting business with the highest ethical standards and integrity, and has a zero-tolerance policy towards unethical conduct”.
The former LKT employee being sued, Mr Edmund Cheah Tiang Ann, was a director with the company from 2005 to 2023, during which time he oversaw its investments. He was also in charge of L&W Construction, which provided construction services to property projects in India, and CapitaLand was one of its clients.
L&W is a subsidiary of a joint venture between LKT and Woh Hup, also a construction player.
In the suit, LKT accused Mr Cheah of allowing the subsidiary L&W to enter into “dubious transactions” under his watch.
The accusations against him chiefly involve L&W’s former managing director Asaithambi Manickam who, LKT has alleged, paid bribes to government officials and to employees of clients.
It is said that in 2023, representatives from CapitaLand Group told Mr Cheah and Mr Manickam that “certain issues” had cropped up with L&W’s projects, which involve both LKT and Woh Hup.
CapitaLand representatives also purportedly told Mr Cheah and other Woh Hup directors that some of CapitaLand’s senior staff members had received payments from L&W in relation to a project in Pune, India.
In LKT’s statement of claim, Mr Manickam is said to have approved the hiring of Harchan Consultants – of which his wife is allegedly the sole shareholder and a director – as a recruitment firm.
“Harchan exploited L&W by earning recruitment commission on various senior personnel hires, who were then subsequently dismissed,” said LKT’s lawyers in the statement.
L&W entered into “unfavourable agreements” with vendors controlled by the relatives of Mr Manickam, who is also said to have awarded inflated contracts to benefit himself and his family.
As well, Mr Manickam has been accused of committing “fraudulent activities and serious misconduct” during his time at L&W, with the alleged fraud exceeding 20 billion Indian rupees (S$295 million).
These allegations were surfaced by whistleblowers, comprising L&W’s clients and current and former employees.
LKT is alleging that Mr Cheah “sanctioned, acquiesced or was otherwise complicit” in L&W’s entry into these transactions, which it said “detrimentally affected LKT’s investment”, putting him in breach of his fiduciary duties and duties of fidelity owed to the company.
On Sept 30, 2023, Mr Cheah resigned from LKT, but was allegedly re-hired by Woh Hup’s chairman Yong Tiam Yoon to be his personal adviser in the joint venture company – despite LKT’s repeated objections, the statement of claim said.
Cheah’s defence
In his defence, Mr Cheah denied all the claims made against him.
Responding, he said he acted under the direction of Mr Lee Soon Teck and Mr Edwin Lee – both since deceased – who ran LKT. After their deaths, he reported to Mr Edwin Lee’s children Mark and Nicole Lee.
Mr Cheah added that his role was not limited to L&W or India, but extended to other group investments, such as in Britain and Indonesia.
And as far as it related to L&W, Mr Cheah claimed that LKT would take the lead on the subsidiary’s financial affairs; Woh Hup led the construction and related building business.
Mr Cheah thus understood his role as that of monitoring the bids for construction projects, and to assess whether the works would over-run their budgets.
He also alleged that he initially visited India monthly to carry out his duties, spending at least 10 days for each trip. But from around 2017, he was asked by Lee Soon Teck and Edwin Lee to focus more on the investments in Britain and Indonesia.
Mr Cheah stressed that he does not reside in India, nor did he have oversight over all of L&W’s operational matters.
Further, it was Woh Hup who appointed Mr Manickam to the L&W board, Mr Cheah alleged.
Mr Manickam’s appointment as L&W managing director was also supported by Mr Lee Soon Teck and Mr Edwin Lee.
Therefore, he claimed that if any “dubious” transactions occurred, they were without his knowledge and consent. THE BUSINESS TIMES
