Low Tuck Kwong, the founder of Indonesian coal producer PT Bayan Resources (BYAN), told a Singapore court he had been defamed in letters to the regulator and stock exchange in Jakarta by his former friend Sukamto Sia.
The letters, one month before Bayan’s 2008 initial share sale, claiming Low reneged on an agreement over the ownership of the company, were revenge for the freezing of Sia’s assets, Low’s lawyer said at the start of a scheduled 13-day hearing in Singapore’s High Court yesterday.
Low is seeking about S$300 million ($242 million) from Sia, an Indonesia-born investor who claims he gave Low S$3 million in 1995 to set up the coal mining operations. Sia stands by his claim in the letters to the regulators and the IPO underwriters that Low promised him half of the business in return, his lawyer told the court yesterday. Sia countersued for a 50 percent share of Bayan.
Both Low and Sia, who were in court yesterday, declined to comment on their dispute.
Low has a 51 percent stake in Bayan, which raised 4.83 trillion rupiah ($510 million) in an initial share sale in August 2008. Bayan shares rose 0.5 percent to 11,250 rupiah on the Jakarta stock exchange yesterday, giving it a market value of 37.5 trillion rupiah. Low holds about $2 billion of publicly traded assets, including Bayan, according to data compiled and calculated by Bloomberg.
The two men used to go on gambling trips together, Low’s lawyer Davinder Singh told the court, citing Sia’s submissions. Their friendship, which began in the 1980s, soured after Sia failed to pay Low and others HK$240 million ($31 million) in 1997 and Sia was sued and had his assets frozen by a Hong Kong court, Singh said.
There was never an agreement as claimed by Sia, Singh said. To allow Bayan’s IPO to go ahead, Low gave up selling 375 million of his shares in the coal producer, losing the opportunity to use the sale proceeds to reinvest during the financial crisis precipitated by Lehman Brothers Holdings Inc.’s collapse, the lawyer said.
Sia denied that Low had suffered a loss due to his letters, Sia’s lawyer Giam Chin Toon said.
Sia, who was jailed for fraud by a Honolulu court in 2002, was an “overly savvy and disreputable businessman who has been imprisoned for bank and bankruptcy fraud and has operated under different names,” Singh told the court.
“I won’t try and defend that,” Sia said of his fraud conviction. “What can I say, it’s in the past.”
The case is Low Tuck Kwong v Sukamto Sia. S703/2008. Singapore High Court.
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