Tycoon Oei Hong Leong renews request for Raffles Education EGM, cites CAD complaint

Oei Hong Leong had sued Raffles Education founder Chew Hua Seng for allegedly reneging on his promise to get a buyer for his shares.
Oei Hong Leong had sued Raffles Education founder Chew Hua Seng for allegedly reneging on his promise to get a buyer for his shares.PHOTO: SHIN MIN DAILY NEWS

SINGAPORE (THE BUSINESS TIMES) - Raffles Education Corp has again received a notice of requisition from shareholders, this time including Indian edtech businessman Shantanu Prakash, alongside tycoon Oei Hong Leong, who previously called for extraordinary general meetings (EGMs) unsuccessfully.

The requisitioning shareholders asked that a special auditor be appointed to review the circumstances surrounding Raffles Education's joint venture with Mr Prakash's India-listed Educomp Solutions over concerns of wrongdoing, including alleged forgery and extortion.

Six of the seven resolutions they proposed in the notice, which was received on Monday (Aug 31), were the same as those listed in the Aug 17 notice sent by Mr Oei and his firm Oei Hong Leong Art Museum, said Raffles Education said in a filing on Tuesday.

Mr Oei and Mr Prakash want this auditor to also look into whether there were any "irregularities" committed by Raffles Education directors that gave rise to Mr Prakash's complaint with the Commercial Affairs Department (CAD) of the Singapore Police Force, relating to whether Raffles Education founder Chew Hua Seng, his spouse Doris Chew, his son Chew Han Wei and other directors had "colluded and conspired to fraudulently fabricate and forge documents towards extortion of Mr Prakash for land grabbing in India".

In addition, the requisitioning shareholders want the special auditor to review any compliance failure by Raffles Education's board regarding disclosure requirements, relating to whether the board was aware of any criminal investigations by the CAD or any authorities in relation to the above-mentioned "dealings", and whether it received any notices or queries from the CAD to assist with its investigations.

The special auditor should also review any corporate governance failures such as allegations of corruption, "including the circumstances leading to the appointment of Mr Chew and his family members to secure membership rights of Jai Radha Raman Education Society, a not-for-profit organisation in India, for their personal benefit", the shareholders wrote in the notice.

Mr Prakash is the chairman and chief executive officer of Educomp, whose website claims it is the largest education company in India and has introduced digital products and online solutions.

In September 2015, Raffles Education commenced arbitration proceedings against the India-listed edtech firm at the Singapore International Arbitration Centre.

The arbitration tribunal in April 2017 awarded Raffles Education damages of 16.32 crores (S$3.1 million) plus 5.33 per cent interest. The Singapore-listed company has initiated enforcement proceedings in India to recover these sums, and commenced a lawsuit in Singapore against Mr Prakash in relation to the arbitration award.

Meanwhile, the six other resolutions repeated in Monday's notice included requests to remove Mr Chew as chairman and CEO of Raffles Education, and to appoint an auditor to review the circumstances surrounding all loans from Mr Chew.

 
 
 

Mr Oei is also trying again to get the company to appoint an auditor to review the circumstances surrounding the handwritten "confidential agreement" dated Oct 16, 2017, signed by him and the CEO. The billionaire had relied on this handwritten note to sue Mr Chew for allegedly reneging on his promise to get a buyer for his shares. The High Court dismissed the lawsuit in February this year. The Court of Appeal this month also dismissed Mr Oei's appeal against the judgment.

In response to Mr Oei's Aug 17 requisition notice, Raffles Education said last week that it was not required to and would not convene an EGM for shareholders to vote on those proposed resolutions, as its board was advised that the request was without merit.

On Tuesday, the private education provider said it is taking legal advice on the contents of the latest notice from Mr Oei and Mr Prakash.

According to Monday's notice, Mr Oei, Oei Hong Leong Art Museum and Mr Prakash together hold more than 10 per cent of Raffles Education shares.

Shares of mainboard-listed Raffles Education were flat at 11 cents as at 9.44am on Tuesday, after the announcement was made.