SINGAPORE : While the man at the centre of it all is behind bars serving his lengthy 42-year sentence, his erstwhile employer will be slugging it out in court in the coming months.
Asia Pacific Breweries (Singapore) is readying its defence against the first lawsuit to be filed in the wake of the $117-million fraud committed by its former finance manager Chia Teck Leng.
Advertisement
On Tuesday, European bank Bayerische Hypo-und Vereinsbank AG (HVB) filed a claim in the High Court to recover US$30 million ($51 million) that it lost in Singapore's largest case of commercial fraud.
The court case is still some time away, but already the two parties have crossed swords in public.
"HVB has a curious way of conducting legal proceedings. Instead of serving the Court papers on the other party, it has decided to announce its proceedings even before notifying us that it has commenced action," said APB company secretary Anthony Cheong in a media release.
"Instead of allowing the Court to decide the case on its merits, HVB appears anxious to make its case through the media."
Earlier in the day, the bank had sent a release to the media detailing its claim against the local brewer. HVB said that APB had appointed Chia, "with a history of gambling and more than $1 million in gambling debt", to the most senior position of financial responsibility.
"APB appears to have failed to detect and prevent numerous acts of fraud committed over more than four years by Chia in his capacity as finance manager, including acts of fraud against APB itself," the release added.
In response, APB denied that it knew of Chia's gambling history when they employed him and said it would deal with various other allegations made in HVB's press release at the appropriate time in court.
Said Mr Cheong: "It appears that the media statement is nothing more than an attempt by HVB to deflect attention from lapses in its own internal controls. It is HVB that has failed to detect and prevent acts of fraud by Chia. This will become apparent at the trial."
The brouhaha over Chia comes more than five months after he was found guilty of six charges of forgery and eight charges of cheating in a scam that involved four banks: HVB, Fuji Bank, Sakura Bank and Skandinaviska Enskilda Banken.
Chia had faked documents and forged his bosses' signatures to get the banks to extend credit purportedly for the company but which went into accounts he created for himself. He then used the money for his high-rolling habits at casinos around the world.
HVB is the biggest creditor among the four banks. Shortly after Chia was sentenced, it took legal action to gain access to APB documents, "which were, in the main, the Pricewater-houseCoopers investigative report ordered by APB last September", HVB managing director Peter Vassiliou told Today.
The report, which noted that APB had not lost any money, gave details of the brewer's internal controls and processes.
Although the application was initially successful, an appeal by APB reversed the decision last month.
"It is interesting that HVB has now sued without the benefit of those documents which they said they needed to assess their claims against APB," said Mr Cheong yesterday.
But Mr Vassiliou, who is also HVB's head of risk management in Asia, said the documents would be produced during the course of normal proceedings and was confident that his bank had a good case.
"APB is bound by the terms of the HVB Loan Agreement because it was entered into by Chia in his capacity as finance manager acting on behalf of APB," he said.
Mr Vassiliou, who told the news wires that Singapore's reputation as a safe financial hub for international investors would be "tarnished" if APB did not return the money Chia stole, disagreed that the bank was trying to sway the case its way.
"Even the judge in Chia's criminal case said that it had damaged Singapore's reputation as an honest and efficient hub," he said.
He added that the bank would pursue all legal avenues to recover the money, both as a matter of principle and because of the huge amount involved.
HVB is represented by Wong Partnership, while APB's lawyers are Senior Counsel Davinder Singh and Hri Kumar of Drew & Napier, whom it has instructed to "vigorously defend the claim". - TODAY
Crazy and very funny case