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Singapore Law Watch
3 days ago
- Business
- Singapore Law Watch
Ex-IPP director Goh Jin Hian wins appeal, court says firm failed to prove his breach caused losses
Ex-IPP director Goh Jin Hian wins appeal, court says firm failed to prove his breach caused losses Source: Straits Times Article Date: 06 Jun 2025 Author: Grace Leong The court concluded that this was a case of 'a deep-seated fraud'. The Appellate Division of the High Court has found Goh Jin Hian, a former director of insolvent marine fuel supplier Inter-Pacific Petroleum (IPP), is not liable to pay US$146 million (S$187.9 million) plus interest in compensation for losses suffered by the firm. In overturning a lower court ruling that found Goh was not entitled to relief from liability, the Appellate Division wrote: 'While we agree with the (High Court) judge that Dr Goh had breached the care duty by reason of his ignorance of the cargo trading business, IPP has failed to show... that the breach caused the loss in question.' Goh, the son of former prime minister Goh Chok Tong, served as a director of IPP from June 28, 2011 to Aug 12, 2019. The court clarified that 'it cannot be part of a director's duty of supervision and oversight to pick up fraud unless there are telltale warning signs'. A 63-page ruling delivered on June 5 by Justice Kannan Ramesh, a judge of the Appellate Division, stated: 'A director may be a sentinel, but he is not a forensics investigator or a sleuth, unless there are signs that would put him on inquiry.' The other two judges presiding were justices Tay Yong Kwang and Woo Bih Li. 'It does not follow that where a director has fallen asleep at the wheel, any or all losses occasioned to the company during the slumber should be vested on the director. Where the director has breached the duty of care, skill and diligence, the burden is on the company to prove that the breach has caused the loss suffered by the company,' the court ruled. Senior Counsel Thio Shen Yi of TSMP Law Corporation, who represented Goh, noted that the latest decision is an important clarification on the law of the duties of directors. 'Dr Goh has always maintained that his conduct caused no avoidable loss to IPP, and we believe he has been vindicated. This is an important decision that has practical implications for all directors,' said Mr Thio, who acted for Goh with Ms Nanthini Vijayakumar, a partner of TSMP Law. Deloitte & Touche, IPP's judicial managers turned liquidators, had sued Goh to recover US$156 million in losses, accusing him of 'sleepwalking through his time as a director', and failing to discover and stop drawdowns in trade financing between June and July 2019 to fund alleged non-existent or sham transactions. IPP alleged that Goh failed to act reasonably in the face of three 'red flags' – an audit confirmation request signed by Goh specifying receivables allegedly owed by Mercuria Energy Trading to IPP, the suspension of IPP's bunker craft operator licence, and three confirmations of indebtedness signed by Goh and sent to Maybank. High Court Justice Aedit Abdullah had found that Goh was not entitled to relief from liability because of 'the egregiousness of his breaches of duty, chief among which was his ignorance as to IPP's cargo trading business' – a 'vehicle of fraud' that had 'disastrous consequences' for the company. 'It was through his combination of misfeasance and nonfeasance, in failing to even be aware of IPP's cargo trading business, that the fraudsters were able to use IPP's cargo trading business as a vehicle of fraud in the first place,' Justice Aedit said in his grounds of decision in July 2024. Goh had appealed against the ruling in February 2024 that found him liable for breach of director's duties and statutory duties and losses suffered by IPP. In allowing Goh's appeal, the Appellate Division found that the three purported red flags IPP relied on 'were not in fact red flags that would have put Goh on a train of inquiry leading to the fraud in the cargo trading business being uncovered, and the loss thereby averted'. The court concluded that this was a case of 'a deep-seated fraud'. Although Goh was not aware of the cargo trading business, the court ruled that 'it does not follow that if Goh had been aware of the cargo trading business, he would have discovered the fraud and thereby put a stop to it'. The court ruled: 'There is no suggestion by IPP there were any, apart from the 'red flags', which we have concluded were not in fact red flags. Further, there was no allegation that the auditor and IPP's financial manager alerted Goh of any issues with the accounts, or that the monthly management accounts and financial statements suggested anything untoward. 'Thus, there is nothing to the point that if Goh had been aware of the cargo trading business, he would have exercised oversight in a manner which would have picked up the fraud and averted the loss.' Mr Thio said: 'Directors owe fiduciary obligations and duties of care to a company, but the Appeals Court has crucially recognised the practical and commercial limits to their ability to scrutinise for and detect fraud, especially deep-seated fraud. This acknowledges the complex commercial realities that directors often operate in.' Mr Terence Quek, chief executive of the Singapore Institute of Directors, noted that the High Court's decision 'was alarming to the general director community as it suggested that directors of all stripes can be held personally liable for losses caused by fraud committed by other directors'. 'That is likely to have caused concern to many executive and non-executive directors in MNC (multinational corporation) subsidiaries (and) family-owned companies,' he said. 'This decision provides much welcome clarity on the true scope of directors' duties in a private company. The ruling recognises that while directors must exercise care and diligence, they cannot be held personally liable for every act of misconduct – particularly when committed by others under difficult-to-detect circumstances,' he added. 'But the judgment is also sobering, as it recognised that Goh did breach his director duties.' Source: The Straits Times © SPH Media Limited. Permission required for reproduction. Goh Jin Hian v Inter-Pacific Petroleum Pte Ltd (in liquidation) [2025] SGHC(A) 7 Print
Business Times
4 days ago
- Business
- Business Times
Court partially allows Goh Jin Hian's appeal, finds he did not breach duty by not probing IPP's red flags
[SINGAPORE] The Appellate Division of the High Court has partially allowed an appeal by Goh Jin Hian against having to pay damages for breaching his duty of care as a then-director of the insolvent marine fuel supplier, Inter-Pacific Petroleum (IPP). The ruling on Thursday (Jun 5) said that Goh had breached his duty of care as a result of not being aware of IPP's cargo trading business – not because he had failed to open a probe into red flags surrounding the company. The justices presiding were Tay Yong Kwang, Woo Bih Li and Kannan Ramesh. Goh was also found not to have breached his duty to act in the best interests of IPP's creditors regarding drawdowns on bank facilities in relation to fraudulent cargo trades. This follows his being found liable in February 2024 for breaching of his director's duties, statutory duties and the losses suffered by the firm, which came to US$146 million plus interest. The liquidators of IPP had sued Dr Goh, the son of former prime minister Goh Chok Tong, to recover US$156 million in losses, accusing him of 'sleepwalking through his time as a director' and failing to discover and stop the drawdowns in trade financing between June 2019 and July 2019, said to have been funding non-existent or sham transactions. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In his grounds of decision released last July, High Court Justice Aedit Abdullah said Dr Goh had not taken 'reasonable steps', such as by making the necessary inquiries, when red flags surrounding the company arose. Goh was also unaware of the existence of IPP's cargo trading business, despite being a director of the company, and therefore did not know this business was a fraudulent scheme perpetrated by IPP, said the justice. Following the appeal, the judgement has been set aside, and Dr Goh no longer has to pay damages to IPP. While the Appellate Division agreed with the previous judgement that Goh had breached his duty of care by being unaware of IPP's cargo trading business, it found that the three red flags raised in the previous judgement were not 'red flags that would have put Dr Goh on a train of inquiry leading to the fraud in the cargo trading business being uncovered'. One such red flag was an audit confirmation request relating to amounts of receivables due to IPP from customer Mercuria Energy Trading, which Goh signed and was sent to Mercuria on Feb 7, 2018. The sum due was US$132 million. While Justice Aedit said Goh should have made inquiries upon receiving the audit confirmation request, the Appellate Division said the fact that this sum was requested by Mercuria was 'not, in and of itself, enough to put him on inquiry'. This was because Mercuria was a big company and that the size of the receivable could have been explained by IPP's sizeable trading volume, amounting to about US$1 billion, with it. Two other issues that IPP's liquidators had called red flags – the suspension of IPP's bunker craft operator licence in June 2019 and three confirmations of indebtedness signed by Dr Goh in July 2019 – were also found not to be red flags by the Court of Appeal. In the case of the suspension, 'even if Dr Goh had made the inquiries... it is unclear if he would have uncovered fraud in the cargo trading business, even if he had learned that IPP was carrying on such business'. The judges were not persuaded that the suspension of the licence was a red flag. As for the confirmation of indebtedness, there was no assertion in the confirmations that the debts were for the cargo trading business, and they were thus not considered red flags. The Appellate Division therefore departed from Justice Aedit's finding that Dr Goh breached the care duty regarding the red flags. It also disagreed with Justice Aedit that Dr Goh did not breach his duty to act in the best interests of the respondent's creditors on the drawdowns for fraudulent cargo trades made on IPP's bank facilities. It found that IPP bears the legal burden of proving that the fraud would have been detected, and that the resulting loss would have been averted had Dr Goh known that IPP was undertaking the cargo trading business, but failed to discharge this burden. Dr Goh was represented by TSMP Law Corporation, led by joint managing partner Thio Shen Yi; IPP's liquidators were represented by LVM Law Chambers, led by managing director Lok Vi Ming. After the appeal, Thio said the decision has practical implications for all directors, as the Court of Appeal has clarified that it 'cannot be part of a director's duty of supervision and oversight to pick up fraud unless there are tell-tale warning signs'. 'Directors owe fiduciary obligations and the duty of care to the company, but the Appeals Court has crucially recognised the practical and commercial limits to their ability to scrutinise for and detect fraud, especially deep-seated fraud,' he added.
Bloomberg
01-06-2025
- General
- Bloomberg
Bangladesh Islamist Party Set For Comeback as Court Removes Ban
Bangladesh's top court has reinstated the registration of Jamaat-e-Islami, paving the way for the country's largest Islamist party to participate in the next election. The Appellate Division of the Supreme Court nullified a 2013 verdict that had revoked Jamaat's registration, Mohammad Shishir Manir, a lawyer representing Jamaat-e-Islami, told reporters in Dhaka on Sunday.
NDTV
27-05-2025
- Politics
- NDTV
Bangladesh Islamist Leader On Death Row For 1971 War Crimes Acquitted
Dhaka: Bangladesh's Supreme Court on Tuesday acquitted a senior Jamaat-e-Islami leader, overturning his death sentence by the International Crimes Tribunal (ICT) in a war crimes case related to the 1971 Liberation War against Pakistan. ATM Azharul Islam was acquitted by the Appellate Division of the top court. "The full seven-member bench chaired by Chief Justice Syed Refaat Ahmed, delivered the verdict, ordering acquittal of Mr ATM Azharul Islam," a state counsel said. He said the court also directed the prison authorities to release Islam from jail immediately if he was not arrested in other cases. There was no higher court in Bangladesh or any international forum to reverse the top court verdict, the counsel added. According to state and defence counsels, the top court observed that the death sentence was handed down without any proper assessment of evidence, leading to an "unjust verdict". The 73-year-old leader of the Islamic party, which was opposed to Bangladesh's independence from Pakistan in 1971, was arrested over charges of committing crimes against humanity during the War. Bangladesh's International Crimes Tribunal sentenced him to death for multiple charges, including genocide, murder, and rape. The Appellate Division upheld the verdict after an appeal hearing on October 23, 2019, prompting Islam to file a petition seeking to review the judgment before the same court on July 19, 2020, presenting 14 legal arguments. Professor Muhammad Yunus's interim government Law Adviser Asif Nazrul welcomed the acquittal calling it the outcome of last year's student-led movement that ousted prime minister Sheikh Hasina's Awami League regime on August 5. "The credit for creating the scope for establishing this justice goes to the July-August mass movement leadership," Nazrul said in a social media post. However, hours after the announcement, left-leaning students at the premier Dhaka University (DU) and northwestern Rajshahi University (DU) took to the streets. Several left-leaning student groups at DU staged a protest march against the acquittal, accusing the interim government of facilitating Islam's exoneration. "We condemn the interim administration's attempt to rewrite history after 54 years with such assertions," Bangladesh Students' Union General Secretary Shimul Kumbhakar told the rally. Kumbhakar added: "If the interim government continues releasing Razakars and Al-Badr members (armed collaborators of Pakistani Army in 1971) and fully absolving them of their crimes, it (interim government) will face the same downfall as the fascist (deposed premier) Hasina's regime." Revolutionary Student Unity General Secretary Jabir Ahmed Jubel said, "We witnessed someone who was sentenced to death on three separate counts now being cleared of all charges". According to media reports and witnesses, violence sparked in the RU campus as left-leaning student groups brought out a torch march. It was confronted by activists of Islamic Chhatra Shibir-- said to be the student front of Jamaat. Democratic Student Alliance, a grouping of left-leaning organisations in RU alleged that around 200 Shibir activists attacked their torch march, wounding over a dozen of their supporters on the campus, known to be a Shibir stronghold. Shibir too claimed that some of their activists were injured in the attack. In 2009, Bangladesh initiated a legal process to try key collaborators of Pakistani forces in 1971 on charges of crimes against humanity. Following trials, six top Jamaat-e-Islami leaders and one senior figure from former prime minister Khaleda Zia's Bangladesh Nationalist Party were executed after the Supreme Court's Appellate Division upheld their convictions. Hasina and several members of her cabinet and party are being exposed to trial in the same tribunal—originally established to prosecute 1971 war crimes—on similar charges of crimes against humanity for their alleged actions during last year's crackdown on the uprising. Islam's lawyer Shishir Monir said he was "fortunate" because the five other senior political leaders had already been hanged while he "got justice since he is alive". Jamaat-e-Islami had never revisited its role since 1971, but in a rare and unexpected move, its incumbent chief Shafiqur Rahman on Tuesday offered an apology "to anyone who might be hurt by the party at any time." Addressing a press conference in Dhaka, Rahman said Jamaat activists were humans "after all" and "to err is human". "As a party, we do not claim to be above mistakes. If any (of our) party activists, party workers or the party itself has caused harm or hurt anyone, anywhere, we unconditionally apologise. Please forgive us," he said.
The Print
27-05-2025
- Politics
- The Print
Bangladesh SC acquits Jamaat leader on death row for 1971 war crimes
'The full seven-member bench chaired by Chief Justice Syed Refaat Ahmed, delivered the verdict, ordering acquittal of Mr ATM Azharul Islam,' a state counsel said. ATM Azharul Islam was acquitted by the Appellate Division of the apex court. Dhaka, May 27 (PTI) Bangladesh's Supreme Court on Tuesday acquitted a senior Jamaat-e-Islami leader, overturning his death sentence by the International Crimes Tribunal (ICT) in a war crimes case related to the 1971 Liberation War against Pakistan. He said the court also directed the prison authorities to release Islam from jail immediately if he was not arrested in other cases. There was no higher court in Bangladesh or any international forum to reverse the apex court verdict, the counsel added. The 73-year-old leader of the Islamic party, which was opposed to Bangladesh's independence from Pakistan in 1971, was arrested over charges of committing crimes against humanity during the War. Bangladesh's International Crimes Tribunal sentenced him to death for multiple charges, including genocide, murder, and rape. The Appellate Division upheld the verdict after an appeal hearing on October 23, 2019, prompting Islam to file a petition seeking to review the judgment before the same court on July 19, 2020, presenting 14 legal arguments. Professor Muhammad Yunus's interim government Law Adviser Asif Nazrul welcomed the acquittal calling it the outcome of last year's student-led movement that ousted prime minister Sheikh Hasina's Awami League regime on August 5. 'The credit for creating the scope for establishing this justice goes to the July-August mass movement leadership,' Nazrul said in a social media post. In 2009, Bangladesh initiated a legal process to try key collaborators of Pakistani forces in 1971 on charges of crimes against humanity. Following trials, six top Jamaat-e-Islami leaders and one senior figure from former prime minister Khaleda Zia's Bangladesh Nationalist Party were executed after the Supreme Court's Appellate Division upheld their convictions. Hasina and several members of her cabinet and party are being exposed to trial in the same tribunal—originally established to prosecute 1971 war crimes—on similar charges of crimes against humanity for their alleged actions during last year's crackdown on the uprising. Islam's lawyer Shishir Monir said he was 'fortunate' because the five other senior political leaders had already been hanged while he 'got justice since he is alive'. PTI AR GRS GRS GRS This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
