Singapore — Two sons of former Singapore president Ong Teng Cheong are settling a dispute in court over shareholdings in their family business Ong&Ong Holdings.
Ong Tze Guan, 55, sued his younger brother Ong Tze Boon, 53 as well as six other shareholders and the company itself over his stake in the business, alleging minority opposition, according to a Jul 1 report by The Straits Times citing Chinese newspaper Lianhe Zaobao.
Mr Tze Guan claimed that his 28.45 per cent stake in Ong&Ong Holdings could have been worth S$5.41 million but was undervalued after being removed as a director from nine companies between Jun 2018 and Jan 2019.
The shares were acquired by the seven defendants for S$1.65 million in Sept 2020, based on the company auditor’s valuation, reported The Business Times.
Before the share transfer, Mr Tze Boon had a 70.43 per cent in the company. His stake increased to 90.28 per cent after the acquisition.
The other six defendants hold a stake between 0.12 per cent and 4.96 per cent each.
However, Mr Tze Guan, in his lawsuit, asked for the transfer of his shares to be rescinded.
He is also seeking a High Court declaration that his shares be purchased at a price agreed upon or fixed by a court-appointed independent expert.
Regarding the undervaluation of his shares, Mr Tze Guan, who is represented by Daniel Koh of Eldan Law, asked the court to take into account his brother’s “oppressive conduct” during the valuation process.
Mr Tze Guan cited examples of the alleged oppressive behaviour, such as removing his directorship within the group, which denied his access to company documents and financial information.
He noted that his removal came after he questioned certain transactions within the company.
His brother, however, refuted all the claims and countersued Mr Tze Guan for loan recovery and defamation.
Mr Tze Boon highlighted that his brother, who studied civil and structural engineering, was never actively involved in the related aspect of the family business. He added that Mr Tze Guan did not have an accurate understanding of the company’s activities and structure.
As for the valuation of his brother’s shares, Mr Tze Boon explained that it had been company practice since 2010 that new share allotments would be given to shareholders at a price of net tangible assets and the average of three years of after-tax profits, reported BT.
He noted how this setup pushed new working shareholders to generate annual profits for three consecutive years, thus growing the value of the group as a whole.
Meanwhile, Mr Tze Guan’s involvement in the family business has “solely been a personal financial interest and nothing more,” said his brother.
Mr Tze Boon is also seeking the repayment of an outstanding personal loan of S$700,000 including the interest, which he had given his brother in 2002 and 2003.
It was reported that Mr Tze Guan has only repaid S$219,983.56.
The civil case is currently at the pre-trial conference stage. /TISG
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