SINGAPORE - Catalist-listed doormaker KLW Holdings said on Thursday (Nov 26) that it has withdrawn an earlier legal bid to recover a S$7 million payment from Mr Michael Chan Ewe Teik.
But a day before, it had filed a separate writ of summons and statement of claim against Mr Chan and his company, Straitsworld Advisory, in the High Court.
KLW is demanding the repayment of the $7 million paid to Mr Chan as part of three term sheets which the company says were transactions made by its former managing director without the board's authorisation.
KLW said the board is acting on advice from its newly appointed legal advisors, Drew & Napier. The board has been told that it is unlikely that they will succeed in obtaining summary judgement against Mr Chan for the $7 million under the terms of the term sheet, as the time for payment came after Nov 21, 2015.
KLW was advised to withdraw the present action and to file a fresh claim after Nov 21, 2015, for the monies to be repaid.
KLW has been thrust into the spotlight recently after two of its former key executives - Mr Lee Boon Teck and Ms Jaslin Gaw Kuan Ching - came under Commercial Affairs Department's (CAD) probe for possible breaches of commercial law.
Mr Lee who was the former managing director, has since taken on a consultancy role in the firm. Ms Gaw, who was previously the firm's financial controller, currently heads the operations and human resource department.
It has been previously reported that Mr Lee, who founded KLW, had entered into certain unauthorised transactions for the company. KLW in May announced that the company had paid $16.2 million of commitment fees without directors' knowledge as part of term sheets agreed to by Mr Lee. Only $9 million has been recovered so far.
Mr Chan is counterclaiming $3.45 million that he alleges KLW owes him from agreements between him and the company through Mr Lee.
KLW said that it is assisting CAD's investigations into possible offence(s) under the Securities and Futures Act (Chapter 289 of Singapore).