SINGAPORE - Two businessmen started a company making aircraft engine parts but fell out with each other and eventually agreed to go their separate ways, with the majority shareholder buying out the minority shareholder.
But there was a gulf of millions of dollars between how much each felt the shares were worth.
Mr Abhilash Kunchian Krishnan, who owned 13.91 per cent of JCS-Vanetec, wanted to sell his stake at between $4.96 million and $9.48 million.
Mr Jason Yeo, who held the remaining 86.09 per cent of the company, valued Mr Abhilash's shares at just over $15,200.
Months before their dispute went to trial, Mr Yeo offered Mr Abhilash $18,300 for the shares, but was snubbed.
On Wednesday (Feb 15), the High Court came down on the side of Mr Yeo, accepting the valuation of his expert witness that Mr Abhilash's shares were worth only $15,242.83.
The case turned on the valuation method to be used.
Mr Abhilash's expert witness had valued his stake based on three intangible assets - the company's contract with a Chinese aircraft engine manufacturer, the company's vendor certification with various aircraft engine manufacturers and the company's patent application for a specialised industrial process.
Mr Yeo, who was represented by Mr Suresh Divyanathan of Oon & Bazul, argued that these assets had no proven value.
Justice Valerie Thean agreed, saying that Mr Abhilash had failed to show that these intangible assets could be sources of future revenue.
The judge noted that the contract was for a prototype only and there was no certainty of any future sales. She accepted Mr Yeo's testimony that vendor certification did not necessarily lead to sales. The judge noted that the patent was pending and she could not put a value on it without expert evidence.
She ordered the buy-out to take place in 21 days and ordered Mr Abhilash to pay Mr Yeo's legal costs of $99,000 plus expenses. Mr Abhilash's lawyer, Mr Liew Teck Huat of Niru & Co, told the court that his client wishes to appeal.
According to court documents, Mr Abhilash and Mr Yeo met in 2003 and started the company a year later. In 2015, Mr Yeo, an engineer and entrepreneur who owns many engineering companies in the region, got a Chinese company interested in purchasing JCS-Vanetec.
The deal fell through because Mr Yeo and Mr Abhilash could not agree, and their relationship soured.
Mr Yeo called for an extraordinary general meeting to remove Mr Abhilash as a director. In response, Mr Abhilash filed a lawsuit for Mr Yeo to buy over his shares and tried to stop the EGM.
Mr Abhilash claimed Mr Yeo had caused the company to enter into "questionable transactions" and tried to prevent him from inspecting the company's accounting records.
Mr Yeo denied the allegations. He said he frequently injected funds into the company to keep it afloat, while Mr Abhilash invested very little and never played an active role.
When the trial started last year, Mr Abhilash dropped his claim of minority oppression while Mr Yeo agreed to buy him out "at fair market value".