Soh had just $300K at takeover time
By CHEW XIANG
19 May 2010
Businessman Anthony Soh launched a $117 million takeover of Jade Technologies in 2008 with less than $300,000 in cash in hand, the High Court heard this week.
He also admitted he flouted securities laws by quietly selling more than 50 million Jade shares during the offer period without reporting the sales.
The botched takeover for Catalist-listed Jade cost Dr. Soh a censure from the Securities Industry Council (SIC) and led to a lawsuit from his financial adviser OCBC. The suit was first heard last month and was adjourned to this week.
Dr. Soh is also being investigated by the Commercial Affairs Department after the bank reported a forged bank guarantee had been used in an attempt to secure funding for the bid.
Under cross-examination yesterday by Senior Counsel Lee Eng Beng of Rajah & Tann, Dr. Soh said that in March 2008 – after the offer for Jade at 22.5 cents a share had been announced – he transferred about 50 million Jade shares to the account of Faitheagle, an investment fund he controlled.
He said he then sold most of the shares piecemeal throughout the month to repay Julie Hendy, the widow of an investor in Faitheagle, as she was sick and her children would not provide for her. Her recently deceased husband had lost money in Faitheagle, so Dr. Soh said he wanted to put that right by compensating her.
But he said he did not disclose the dealings as he wanted to report them at one go at the end of the month. Also, ‘if I had announced this, then people would not have accepted’ his offer to buy Jade shares, he told the court. ‘The mistake was made because I was too compassionate, too careless. I should have sold one of my properties instead . . . I had 3-4 properties at the time.’
Mr. Lee said the reason Dr. Soh was selling the shares was to cash out of Jade while the share price was propped up by his own offer. Otherwise, selling shares of a company – often at a price below his own offered price of 22.5 cents – didn’t make sense, Mr. Lee said, arguing that Dr. Soh had to raise cash to meet margin calls and was in severe financial straits.
Dr. Soh denied this, but this week bank statements were produced showing he then had just US$150,000 in a UBS account, plus perhaps just over S$50,000 in other accounts with OCBC and Barclays. Dr. Soh said he had millions of dollars of shares parked in various accounts and could ‘easily’ have obtained an overdraft on those shares.
The bank is claiming that Dr. Soh’s takeover was not genuine, and so caused it loss when the takeover collapsed in April 2008. OCBC has also been censured by the SIC.
Dr. Soh is counter-claiming that he suffered loss because OCBC did not properly fulfil its duties as financial adviser. He is represented by Senior Counsel Michael Khoo.
The case, being heard before Justice Lai Siu Chiu, is expected to wrap up today in the High Court.