Indian court restrains S’porean directors in JV dispute involving Temasek-backed projects
PETALING JAYA: A commercial court in Bengaluru has issued an interim order restraining two Singaporean directors of an Indian joint venture company from entering into transactions without board approval.
The ex-parte order, handed down earlier this month, was made against brothers Kim Yong Tiam Yoon and Eugene Yong Kon Yoon in their capacity as directors of L&W Construction Private Ltd.
L&W is a 50:50 joint venture between Lee Kim Tah (Pte) Ltd and Woh Hup (Private) Ltd, two leading Singapore construction firms with projects in India linked to Temasek-backed developers CapitaLand and Mapletree.
Kim Yong is the chairman of Woh Hup, recently awarded a contract to build Las Vegas Sands’ new US$10.27 billion resort and entertainment complex in Singapore.
In 2005, he pleaded guilty in the Kuala Lumpur sessions court to abetting a listed company in the misapplication of RM26.5 million in public-issue proceeds, and was fined RM600,000.
In a statement, Lee Kim Tah said the injunction was issued in a lawsuit brought against the Yong brothers over alleged fiduciary duty breaches, and will remain in force until June 8, when the case returns to court for the defendants to respond.
The suit names L&W as the third defendant.
“I am of the considered opinion that the plaintiff (Lee Kim Tah) has made out a prima facie case for grant of ad-interim relief as sought without notice to defendants,” city civil and sessions judge Arjun S Mallur said when making the order, according to notes of the proceedings sighted by FMT.
He added that issuance of notice would defeat and delay the very purpose of the suit.
“During the course of running the company it is revealed that there are large scale irregularities, financial mismanagement and financial wrongdoing which have also been brought to light by way of reports filed by one Singapore law firm, one Indian law firm and also (an) independent audit firm.
“Defendants 1 and 2 even being fully aware of the said wrongdoings are drawing a cold fleet and in fact are trying to enter into new contracts totally disregarding and showing ignorance to manifest financial irregularities,” the judge said in his ruling.
In the suit, Lee Kim Tah accuses the brothers of wrongfully shielding an allegedly corrupt senior executive from accountability.
Court documents claim an independent governance audit was launched after CapitaLand informed L&W directors in 2023 that L&W employees had allegedly paid bribes to CapitaLand staff in connection with its Pune project.
According to the documents, the audit had also identified serious misconduct involving a senior executive in L&W.
“The findings were grave and unequivocal,” Lee Kim Tah’s memorandum of plaint claims.
It said that in 2023, a Singapore law firm had already recommended that L&W take legal action against the executive and his co-conspirators to recover Indian Rupees 33 Crore (approximately US$ 3.5 million), various improper payments and consequential losses, and for a disgorgement of profits.
However, the two directors allegedly failed to take prompt action despite the seriousness of the findings, Lee Kim Tah said in its suit.
المصدر: Free Malaysia Today