E-Malt.com News article: Singapore: Case of Asia Pacific Breweries’ former ‘gambling’ executive not left to collect dust in archives

Bayerische Hypo-und Vereinsbank AG and SEB AB appealed a Singapore court ruling that Asia Pacific Breweries Ltd. wasn’t responsible for $57 million in loans taken out by a former executive to fund his gambling addiction, Bloomberg communicated on April, 27.

The banks asked Singapore’s Court of Appeal to dismiss an Aug. 31 ruling that they were “easy prey” to loans fraudulently obtained by Chia Teck Leng, the Singapore-based company’s former finance manager, in the brewer’s name.

Stockholm-based Skandinaviska Enskilda Banken, also known as SEB, and Munich-based HVB missed discrepancies in documents that “were staring bank officers in the face” and ignored normal procedures when dealing with Chia, Judge Belinda Ang said in August. Chia, described as an “inveterate gambler who unremittingly resorted to cheating and forgery” by Ang, was sentenced to 42 years in jail in 2004 for cheating and forgery.

Asia Pacific Breweries wants “to go scot-free when they unleashed this gambling monster on the banking community,” Sundaresh Menon, a lawyer for SEB, told the court. Putting a gambler in charge of finances was like “putting an alcoholic in charge of a brewery.”

Shirley Poo, a spokeswoman for the maker of Tiger Beer declined to comment as the appeal is being heard.

Chia defrauded four banks including Japan’s Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. of S$117 million ($85 million) by forging the signatures of Asia Pacific Breweries directors to get loans in the company’s name between 1999 and 2003. The Tokyo-based banks withdrew their case against Asia Pacific Breweries on the seventh day of the trial.

“The use which Chia made of his employer’s name in order to borrow with ease from the bank was just as much a fraud on APB as it was on the banks,” Ang wrote in her 232-page ruling.

In addition to the loans, Chia also embezzled S$53 million from the brewery, according to court filings.

Asia Pacific Breweries denied responsibility in the fraud and counter-sued SEB, Sweden’s third-largest bank by market value, for “dishonest assistance,” according to court filings. The brewery is a unit of Fraser & Neave Ltd., Singapore’s biggest beverage maker.

Drew & Napier LLC is representing Asia Pacific Breweries while Wong Partnership LLP represents HVB and Rajah & Tann LLP for SEB.

The case is Skandinaviska Enskilda Banken AB, Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd. & Another CA121/2009 and Bayerische Hypo-Und Vereinsbank Aktieengesellschaft v Asia Pacific Breweries (Singapore) Pte Ltd. & Another CA122/2009 in the Singapore High Court.


28 April, 2010