A former private banker who was paid a visit at his Chancery Lane home by debt collectors hired by a former client, has been held by the High Court to be liable for the $6.5 million in investments he had guaranteed the businessman.
Mr Karl Liew, who is the son of founding president and former chief executive officer of CapitaLand Group, Mr Liew Mun Leong, was sued by the businessman, Mr Alan Zhou, for breaching the personal guarantees.
The court also found Mr Liew liable for deceit in making false representations to Mr Zhou about the investments, which were in China.
In finding Mr Liew liable, Judicial Commissioner Audrey Lim said in judgment grounds last week that Mr Liew stood to gain by his fees and Mr Zhou had "relied on Liew's representations as Liew was his fund manager who had sourced for and recommended the investment products to Zhou".
Mr Liew had challenged the enforceability of the investment pacts and personal guarantees.
As he had been made a bankrupt last year, Mr Liew was not sanctioned by the Official Assignee (OA) to defend the suit against him and was instead subpoenaed to testify in court by Mr Zhou's lawyer Eugene Quah from RHTLaw Taylor Wessing.
Bankrupts must obtain permission from the OA to contest suits.
A court default judgment had already been entered against a second defendant, Realm Capital (RCL), a British Virgin Islands company Mr Liew had set up to spearhead investments into China.
A default judgment was found for the $6.5 million sought, comprising the $6 million principal sum and interest, as the company did not enter an appearance.
Mr Liew claimed Mr Zhou had breached the agreements by not paying the investment funds to RCL but a third party, Ms Chen Jie, a Chinese national who was the contact point for the investment recipients in China.
The judge rejected Mr Liew's claim that Mr Zhou had transferred the investment funds without his approval, finding that "Liew was aware of the transactions and money transfers... as he was copied" on the relevant correspondences.
Judicial Commissioner Lim also disbelieved Mr Liew's claim that he had personally paid Mr Zhou $500,000 to help Ms Chen repay the monies, saying she was on the run. "Overall, I find Liew to be a dishonest and evasive witness, whose evidence was riddled with inconsistencies," said Judicial Commissioner Lim.
She ruled that as the agreements were valid and enforceable against RCL and RCL had defaulted on them, Liew was liable for them.
It is understood that even if he is discharged from bankruptcy, it will not release him from this debt, since it involved deceit.
In September 2015, Mr Zhou hired debt collectors, who went to Mr Liew's home seeking to recover the money. The five debt collectors were subsequently dealt with in court for their aggressive behaviour and insulting words.
Mr Zhou had also sued for damages against the firm System Impact (SIPL), Ms Mah Mei Sin and Mr Gobindram Harjani, claiming they had wrongfully retained monies, among other things.
Under the investment pacts, Mr Zhou was required to transfer the funds to the account of SIPL and at times to Ms Mah.
Ms Mah and SIPL had allegedly transferred the investment funds to Mr Gobindram, as a further intermediary in remitting funds.
Mr Gobindram, defended by lawyer Lim Kim Hong, was cleared of the claim. Ms Mah was found liable for $247,689 and jointly with SIPL for another $1 million.