Asia Pacific Breweries case concluded?

The case of Asia Pacific Breweries (well known for its Tiger Beer) and the massive fraud of their Finance Manager Chia Teck Leng may have come to a close.

Chia had defrauded 5 banks with Singapore branches of over $100 million by using the name of his employer to obtain loans. His employer was unaware of his activities. He was sentenced to a record 42 years jail. Of the 5 victim banks, 4 sued but 2 dropped out halfway. Finally, only Skandinaviska Enskilda Banken from Sweden and Germany's Bayerische Hypo-und Vereinsbank (HVB) continued with their claims.

Their arguments in court were based on the actual authority or the apparent authority of Chia to obtain finance for his employer, and negligence on the part of his employer. In a lengthy judgment, High Court judge Belinda Ang rejected all arguments of the banks and dismissed their claim. The court found that the banks had not followed proper procedures which would have led to the fraud being detected at an earlier date. As expected, the banks were ordered to pay the costs of the legal proceedings.

At a later date, the judge's decision will be summarised on this blog. In the meantime, the story may not have ended as an appeal appears to have been filed. It is rare for a judge to issue a written judgment if there is no appeal in a particular case.

Chia Teck Leng, APB and the banks 1

As previously mentioned, Chia Teck Leng, hold the record for the longest prison sentence for commercial crime and for the biggest losses caused by fraud.

The facts show that he approached various foreign banks operating in Singapore, in his capacity as finance manager of major brewer, Asia Pacific Breweries, (APB) for loans totalling $117 million for his employer. He managed to divert the loans into accounts controlled by him.These loans were never approved by the board of directors of APB and the board denied all knowledge of them.

4 of the 5 banks started lawsuits against APB in the Singapore High Court. These were -

Germany's Bayerische Hypo-und Vereinsbank (HVB) and Sweden's Skandinaviska Enskilda Banken (SEB) and Japanese banks Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation.

SEB is seeking US$25 million, a lawyer for the Scandinavian bank said. Mizuho was seeking US$8 million and Sumitomo Mitsui S$10.3 million. HVB, a unit of Unicredit, is claiming US$32 million. It is believed that their claims were based on arguments relating to estoppel, agency and apparent authority.

The Japanese banks discontinued their claims at the start of the trial. The claims by the other banks have not been decided by the court.