Man wins back $636k after suing fellow firm director for taking his dividends, director’s fees

SINGAPORE - A business relationship of over thirty years came to a bitter end in a lawsuit, as one man accused the other of pocketing over $600,000 of his money.

The plaintiff, Mr Deniyal Kamis, brought a case against Mr Niew Bock Leng and the two companies where they were shareholders and directors, Mapo Engineering and Mapo Marine.

After a two-year legal battle, Mr Deniyal eventually clawed back about $636,608 in dividends and director’s fees that Mr Niew had taken for himself.

In a judgment released on July 4, Justice Philip Jeyaretnam ruled that Mr Niew’s acts were “commercially unfair”.

In addition to giving Mr Deniyal the fees due to him, the judge also ordered Mr Niew to buy out Mr Deniyal’s shares in the two companies for a sum yet to be determined.

Justice Jeyaretnam said both men started out with the understanding that Mr Deniyal would be rewarded for his service.

“Somewhere along the line, perhaps because he believed he was solely responsible for the companies’ success, Mr Niew took for himself dividends and director’s fees that rightfully belonged to Mr Deniyal.”

The two men had known each other since the 1980s, when both were involved in other businesses in the maritime industry.

Mr Niew set up Mapo Engineering in 2003 and Mapo Marine in 2006, and appointed Mr Deniyal as a fellow director of the two companies.

Practically, Mr Niew headed and controlled the companies, while Mr Deniyal was a senior operations manager who mainly supervised work at Keppel Yard.

Back then, Mr Niew gifted Mr Deniyal shares out of goodwill, and because he regarded the latter as a valuable employee that he wanted to reward and retain for the long term.

Mr Niew owned a majority stake in each firm with 80 per cent of Mapo Engineering’s shares and 60 per cent of Mapo Marine’s shares, while Mr Deniyal owned 10 per cent and 30 per cent of the respective companies’ shares.

According to Mr Deniyal, they fell out in mid-2019 after he confronted Mr Niew about perceived irregularities in the companies’ management, and also demanded to know why he was not given his director’s remuneration.

After an argument about disclosing financial documents, Mr Deniyal refused to report to work. He was fired in Feburary 2020.

In April 2021, Mr Deniyal brought the case to court. He said Mr Niew had run the company in an oppressive manner that disregarded his interests as a minority shareholder.

One of the issues he raised was that he never received dividends or director’s fees.

He wanted Mr Niew to purchase his shares at fair value without discount, and an account of any fees owed to him.

But Mr Niew said Mr Deniyal wanted to get an “unjustified windfall” by forcing him to buy the shares.

He said the dividends and director’s fees were credited to Mr Deniyal, but the money was used to set off more than $600,000 in loans that the latter had purportedly taken from him and the companies.

Mr Deniyal also took issue over Mr Niew putting himself on the payroll of Mapo Engineering and Mapo Marine and increasing his own monthly salary from $14,000 to $50,000 shortly after firing him.

Mr Deniyal believes this move was to diminish the funds of the two companies that he held stakes in.

To this, Mr Niew said he was fully entitled to decide his own salary as the majority shareholder and director of both companies.

Justice Jeyaretnam said Mr Niew did not prove that he had loaned money to Mr Deniyal. Even if he did lend the money, he had no evidence that the latter consented to his dividends and director’s fees being used to set off the loans.

By placing himself on the payroll of the two companies after firing Mr Deniyal, the judge said, Mr Niew had shown “complete disregard for Mr Deniyal’s interest as a shareholder”.

Said Justice Jeyaretnam: “Mr Niew was the dynamo in the engine that powered the companies; Mr Deniyal, however, was still a trusted cog vital to the companies’ success.”

Mr Deniyal’s shares will be valued at a later date.

He was represented by Mr Walter Silvester and Mr Alexander Walter from Silvester Legal.

Mr Wayne Ong of Wayne Ong Law Practice represented the two companies in the suit, while Mr Niew’s lawyers were Ms Poonaam Bai Ramakrishnan Gnanasekaran and Mr Bernard Yang of Eldan Law.

Correction note: In an earlier version of this article, we referred to Mr Niew’s lawyer as Mr Poonaam Bai Ramakrishnan Gnanasekaran. The correct salutation should be Ms and not Mr. We are sorry for the error.