Chua Chim Kang (left) and Lee Kuan Fung are being sued by a businessman seeking repayment of a S$990,000 interest-free loan. - ST PHOTOS: AZMI ATHNI
SINGAPORE (The Straits Times/ANN): Two media professionals, Chua Chim Kang and Lee Kuan Fung, are being sued by a businessman seeking repayment of a S$990,000 (RM3.3 million) interest-free loan he had given the pair in 2017.
Businessman Ren Xin Wu, a Canadian national who is originally from China, said the sum was for a company called Homing Holdings that was set up to promote the use of Mandarin in Singapore.
Chua was a journalist at Chinese daily Lianhe Zaobao and had served as chief editor of the now-defunct Lianhe Wanbao.
He is now head and chief editor of Chinese news and current affairs at Mediacorp.
Lee was a former associate editor of bilingual news site omy, and headed the Chinese media digital strategy department at the former Singapore Press Holdings (SPH).
She is now a freelancer.
In his suit, Ren accused Lee of mismanaging Homing, and accused Chua and Lee of breaching an agreement to repay the loan.
In a separate but related lawsuit, Lee is accused of breaching her fiduciary duties by allegedly siphoning $40,000 from Homing after “orchestrating” a questionable transaction with another firm named Goldciti.
The two High Court suits are being heard together in a trial that started on Nov 12.
Ren was introduced to Chua in September 2015, the businessman’s lawyer, Jasmin Kang, said in her opening statement.
According to Ren, in August 2016, Chua mentioned that Lee was a very capable former colleague who had, together with him, planned a business venture.
Ren started negotiations with the pair to explore a joint venture based on Lee’s plan to set up a business to teach Mandarin, said Kang.
As he does not live in Singapore, Ren appointed a representative, Huang Ming Jing, to oversee his investment in the venture.
On June 2, 2017, Lee incorporated Homing Holdings in Singapore. She was appointed as a director of the company.
On July 26, 2017, Chua, Lee and Ren signed an agreement, under which Ren gave a S$1 million cheque to Lee.
The sum comprised S$10,000 as his investment in exchange for 35 per cent of the share capital of the company, and an interest-free loan of S$990,000 as working capital.
The agreement stated that Chua’s 35 per cent stake would be held by Lee.
Lee also agreed to manage the company and to “invest intellectual property into the company” in exchange for the remaining 30 per cent of the share capital.
Ren said the loan was due on July 27, 2020, but the pair failed to pay up even though Chua stated on Aug 3, 2020, that he would mortgage his house to repay the loan.
In September 2020, Ren, through his then lawyers, served legal demands on the pair.
On Sept 30, 2020, Homing entered into a purported agreement with Goldciti, a management consultancy firm. It paid out $40,000 to Goldciti under this agreement.
On Dec 14, 2020, Ren applied for Homing to be wound up. The application was granted by the High Court on Jan 22, 2021.
The company’s liquidators were granted powers to take legal action against Goldciti and Ms Lee.
On Sept 9, 2022, the company filed a lawsuit against Goldciti and Ms Lee, seeking the return of the S$40,000.
On July 24, 2023, Ren sued Chua and Lee for breaching the agreement to repay the S$990,000 loan.
What the defendants say
In his opening statement, Salem Ibrahim, who acts for the defendants, said that when Ren was persuading the pair to start a business with him, Chua did not want to be involved in the day-to-day management.
But Ren insisted that Chua be given a 35 per cent stake, said Salem.
He said Ren wanted Lee to leave SPH and manage the venture full-time, so she did.
The defendants said revenues dived in 2020 as a result of the Covid-19 pandemic, and Mr Ren wanted the S$990,000 to be returned to him.
By then, Homing was insolvent on the books.
Salem said Lee was given legal advice that it would not be right for Homing to meet Ren’s demands as other creditors were waiting to be paid.
The lawyer added that Ren brought pressure on the defendants by issuing two sets of legal demands on them, followed by a demand on Homing.
He said Lee suffered the stress and humiliation of having had the contents of a lawyer’s letter being pasted on the wall next to the door of her home.
Lee subsequently complained to the Law Society of Singapore, and the lawyer concerned was sanctioned, he said.
According to Lee, confronted with the legal demands, she turned to Goldciti for professional services.
The management consultancy firm prepared a 17-page report providing alternative financial solutions.
However, Ren’s lawyer argued that the purported agreement with Goldciti was nothing more than a sham to siphon money from Homing.
Kang disputed the authenticity of the report and questioned the decision to spend S$40,000 on a consulting agreement when Homing was insolvent.
She also described Lee’s complaint to the Law Society as a red herring because the lawyer in question had only been given a warning for unthinkingly posting the demand without first placing it into an envelope.
The trial resumes on Nov 14. - The Straits Times/ANN
