Shareholder sued by Stamford Land Corporation justifies his statements against the company

844
Photo: YouTube screengrab
 

Defense submissions for Mano Sabnani, who is being sued by Stamford Land, were submitted to the High Court by his lawyers on Sunday, September 30. In them, Mr. Sabnani insists that the comments he made against the company were ‘fair’ and completely justifiable.

Stamford Land Corporation is suing Mr. Sabnani for airing complaints about the company at two of Stamford Land’s annual general meetings, in a Facebook post, as well as in a letter to The Business Times.

Mr. Sabnani is a minority shareholder in the company which owns 60,000 shares with Stamford Land since 2012. According to his legal team, he has “qualified privilege” to ask the management during the annual general meetings about the high salaries of its top officers as well as its low dividend payouts.

Shareholders in Singapore have been alarmed at the lawsuit, which is exceedingly unusual. Tan Boon Gin, Singapore Exchange Regulation chief executive said that parties should not take “an overly legalistic approach.”

Mr Tan also said, “Generally, we encourage a free and frank discussion between the board and shareholders at AGMs … We encourage all parties to focus on the issues and not personalities.”

According to Zhuo Jiaxiang and Abraham Vergis of Providence Law Asia, who represent Mr. Sabnani, what he said was “fair comment.”

A longtime investor, Mr. Sabnani “had a legitimate duty and/or interest to communicate” when the company announced that the dividends would decrease drastically from 3 cents per share in 2015 to .5 cents per share in 2016.

According to Messrs Vergis and Zhuo, Mr. Sabnani as making “a reasonable inference based on fact.”

The investor compared it to what had happened to offshore and marine group Swiber Holdings, which had halted paying dividends in 2012 and had ended up in liquidation.

Mr. Sabnani’s lawyers wrote, “The defendant’s comment was that a sudden and drastic dividend cut would send a negative signal to the market and be interpreted as such by an ordinary and fair-minded person.”

According to the legal team, it was Mr. Sabnani’s “legitimate duty” to inquire at the company’s general meeting on July 27, 2018, to inquire why the salary of executive chairman is S$5 million, an amount equivalent to three times the total of what the top 5 chief executives of Stamford Land are making.

And since he actually asked questions, what Mr. Sabnani said “cannot be construed as assertions of fact.”

Mr. Ow had complained that Mr. Sabnani had participated in trying to create a riot and that his comments were actually complaints.

Mr. Sabnani had posted on Facebook how unwelcome and unworthy he felt at the meeting, having been “strong-armed by the cavalier and condescending attitude of Mr Ow — just for asking a few questions,” in a Facebook post entitled “Abhorrent board behavior at Stamford Land AGM.”

He later took this post down at the bequest of the lawyers for Stamford Land, though his own legal team said he could have kept it.

His legal team said this showed Mr. Sabnani’s goodwill.

He did write, however, to the Business Times on July 31, about his feelings toward how he was treated in the meeting. About this, his lawyers said, “The (Business Times) article was a fair and accurate report of the proceedings at a general meeting by a public-listed company in Singapore.”

The lawyers for Stamford Land are Luo Ling Ling and Nandakumar Renganathan of RHTLaw Taylor Wessing.

Ms. Luo and Mr. Renganathan say that Mr. Sabnani had accused Mr. Ow and lead independent director Vaile Mark Anthony James, who is a former Australian deputy prime minister, of having run the company to the ground.

They also say that Mr. Sabnani has accused Mr. Ow of dishonesty and corruption, and that he was“deliberately depressing” the share price of the company via a low dividend payout to privatize it. And, according to Ms. Luo and Mr. Renganathan, Stamford Land has been accused by Mr. Sabnani of exploiting shareholders and purposefully declaring lower dividends for them, while simultaneously paying its directors more than they should.

“By way of innuendo” Mr Sabnani supposedly implied “that Mr Ow oppressed the minority shareholders of Stamford Land. Furthermore, the lawyer say that company’s directors are also being accused by Mr. Sabnani of not having behaved with necessary diligence.