Court dismisses SBI Offshore ex-CEO's claims of reputational loss against PwC

Singapore

A FORMER SBI Offshore executive who alleged that PricewaterhouseCoopers Advisory Services (PwC) had caused him reputational loss in its special audit of transactions he was involved in has lost his suit.

David Tan Woo Thian, the founder and former chief executive of SBI Offshore until 2016, had his claims dismissed by a High Court judge last Wednesday, according to the minute sheet seen by The Business Times.

In July 2016, SBI engaged PwC to review a series of transactions pertaining to SBI's acquisition and subsequent disposal of shares in Jiangyin Neptune Marine Appliance (NPT), a Chinese lifeboat manufacturer.

PwC found that two sets of NPT acquisition agreements and disposal agreements existed, with conflicting sale and purchase prices. SBI's prospectus reflected the acquisition cost of US$1.75 million, whereas a separate document lodged with the PRC authorities showed a consideration of US$350,000.

Mr Tan, together with another former CEO Jonathan Hui Choon Ho, had allegedly signed both sets of agreements on the company's behalf. PwC's findings were summarised in a report dated Sept 6, 2016 that was issued to SBI's board and shareholders.

Mr Tan alleged that PwC acted negligently in investigating the transactions and in presenting its findings in the report, causing him to lose influence in SBI.

Justice See Kee Oon dismissed the claims, saying that PwC's report drew fair and defensible conclusions. "The report correctly surfaced the discrepancies and inconsistencies in the acquisition and disposal documentation relating to the NPT transactions, and correctly drew attention to the possibility of breaches of Chinese tax laws and Singapore securities law," he said.

Mr Tan's assertions were unsupported and entirely speculative, the judge added. "The plaintiff's real grievance appears to be personal. The present action appears to be driven by his dissatisfaction over many things. Among these are the defendant's perceived prejudice against him and its ostensible failure to hold John Chan to account in spite of the allegations raised by Jonathan Hui via email.

"This constitutes part of the plaintiff's 'conspiracy' theory that the defendant sought to ensure that John Chan was absolved of blame and had set out to 'fix' the plaintiff instead. I am unable to see any proper basis for this theory. In any event, it is not part of the plaintiff's pleaded case."

John Chan Lai Thong was another former CEO of SBI Offshore who left in August 2017.

Back in 2016, Mr Tan, SBI's largest shareholder, had joined forces with Mr Hui to requisition an extraordinary general meeting in a failed bid to force out Mr Chan.

SBI's board had called on shareholders to vote against the removal of Mr Chan, arguing that there was nothing adverse in the findings by PwC with respect to several allegations that were levelled against him.

The Court will hear the parties' submissions on costs later this month. Mr Tan was represented by Vijay & Co. PwC was represented by Rajah & Tann.