SINGAPORE - Fashion retailer Tina Tan-Leo, 55, appeared in the High Court on Tuesday (Jan 26) to defend a $7 million lawsuit brought by the liquidators of one of the companies under her Link group for alleged breach of fiduciary duties.
Mrs Tan-Leo is the sole owner of three luxury fashion companies: Link Boutique, Alldressedup International and Living the Link.
In May 2010, she took steps to wind up Living the Link, a luxury fashion and lifestyle shop, which was not profitable and became insolvent by end 2008, a little under two years after it was set up.
But liquidators Chia Soo Hien and Leow Quek Shiong found that while Living the Link was insolvent, Mrs Tan-Leo had transferred cash and assets from it to Link Boutique and Alldressedup.
Among other things, inventory with a book value totalling $2.6 million was moved to Alldressedup and Link Boutique on Dec 31, 2008. Cash payments of $3.87 million were also made to Link Boutique throughout 2008.
And between May 2008 and July 2009, Living the Link paid about $98,000 for the personal expenses of Mrs Tan-Leo and her husband Lionel.
In June 2012, the pair filed a lawsuit against her, Link Boutique and Alldressedup, alleging that she had breached her duties to Living the Link with these transfers.
The liquidators sought to set aside the transactions "tainted by undue preferences and undervalues", said their lawyer, Mr Suresh Nair, in his opening statement on Tuesday (Jan 26).
He contended that Mrs Tan-Leo had "stripped" Living the Link of all its assets to avoid liability as she had provided personal guarantees for its banking facilities.
"The evidence will show that when times got bad, Tina Tan decided to forsake her duties as director of LTL to mitigate her own personal losses, and she chose to saddle LTL with expenses it ought not to have borne," said Mr Nair.
The defendants, represented by Mr Alvin Tan, do not deny the transfers of cash and assets.
They contend that the transfers were justified. Living the Link was merely holding the inventory on consignment; Link Boutique and Alldressedup had paid for the inventory so they were entitled to have it back.
As for the cash payments, the defendants say that Link Boutique and Alldressedup had paid various expenses and made cash advances to Living the Link and so were entitled to be reimbursed.
Mrs Tan-Leo denies breaching her duties to Living the Link; she contends that she had acted honestly and reasonably.
The trial, scheduled to be heard over 11 days, continues.