Woman to return $12m she siphoned from firm she owns with ex-husband: Apex court

SINGAPORE - Over the years, a businessman who owns a realty firm with his wife made loans totalling $12.564 million to the company to help pay off its bank loans.

After getting millions in a divorce settlement, the wife reclassified these loans in the firm's ledger as amounts owed to her, instead of to her husband, Mr Ng Tang Hock, 63.

Madam Wendy Chew Kar Lay, 52, subsequently withdrew this sum from the company, Teelek Realty, for her own use.

Mr Ng sued Madam Chew, contending that her actions relating to the company, including the withdrawal of the $12.564 million, constituted oppression under the Companies Act.

On Thursday (July 22), the Court of Appeal upheld a lower court ruling that Madam Chew has to return the $12.564 million she misappropriated.

The apex court rejected Madam Chew's claim in her appeal that Mr Ng had agreed to transfer the loans to her.

"It is difficult to think of a more direct example of an injury to shareholders than reducing their value in a company by draining it of $12.564 million," said the judgment, written by Justice Judith Prakash.

The court found that Madam Chew, who used to be an accounts assistant working for Mr Ng before they got married, had conducted Teelek's affairs in a way that was oppressive to him.

"What we see is a picture of systemic abuse by Madam Chew," said the court, which also comprised Chief Justice Sundaresh Menon and Justice Andrew Phang.

Apart from misappropriation, Madam Chew flouted the company's articles by transferring one share in the company to each of their two children and withheld information about the company's finances from Mr Ng.

Mr Ng, who is in the shipping business, started a relationship with Madam Chew in 1990, shortly after the death of his first wife.

The couple wed in 1995 after having two children.

In 1996, the spouses started Teelek as an investment holding company, with each holding 50 per cent of the shares.

Mr Ng claimed that Madam Chew had an affair in 2006, but she denied this.

In 2011, the couple started talking about divorce and the division of matrimonial assets.

In September that year, they arrived at an agreement as to the division of their assets.

Mr Ng transferred his shares in a company called Mingsen to Madam Chew.

Mingsen held fixed deposits of US$22.58 million ($30.72 million) and 44.8 million yuan ($9.41 million) with one bank, and US$13.5 million with another bank.

Mr Ng also gave Madam Chew sole control of a bank account in London which held more than £1.3 million ($2.43 million).

In October 2011, Madam Chew reclassified Mr Ng's loan to Teelek.

The following month, she filed for divorce, which was finalised in August 2012.

That month, Mr Ng resigned as a director of Teelek and his daughter Shirlyn took his place. His son Eugene became a director in 2014.

Mr Ng had also sued his two children, who are in their late 20s, but the apex court found no evidence that either of them had actively participated in the oppressive acts.

The apex court granted Mr Ng's request for a buyout, which included a special audit into the accounts and affairs of Teelek.

Mr Ng, who was represented by lawyers from Damodara Ong, will buy all of Madam Chew's shares in the company. She was represented by Rajah & Tann.

Teelek, which has about $10 million in cash, owns six commercial properties, five of which are occupied and generate profit.