Firm being sued for terminating tie-up claims former business partner gave ‘kickbacks’

A construction firm being sued by its former business partner for terminating their collaboration claims it was compelled to do so because the latter, a training provider, had engaged in “illegal” conduct by giving kickbacks to others.

The allegation arose in a civil case between Global Training Services and Poh Wah Scaffolding & Engineering, which opened in the High Court on July 30.

Poh Wah has submitted as evidence two audio recordings in which Global’s director, Mr Ben Chong Zheng Yean, purportedly admitted to giving “kickbacks”. But Global denies that there was any illegal conduct.

The training company contends that the word was used colloquially and interchangeably to mean discounts, cashbacks and rebates for the purposes of promotions and marketing.

The two companies had earlier entered into an oral agreement to operate a training centre for migrant workers.

They are now suing each other after Poh Wah, which has the licence from the Building and Construction Authority to conduct the courses, terminated the business operations.

Global, which is represented by Mr Thomas Lei of Lawrence Chua Practice, is claiming about $2.1 million from Poh Wah for unpaid service training fees and damages.

Poh Wah, which is represented by Mr Jenson Lee of JL Law Chambers, is claiming about $1.6 million from Global for unpaid commissions and damages.

The two companies disagree on when the agreement was made – Global says it was in December 2015, while Poh Wah says it was in March 2017.

Each side also has differing positions regarding the terms of the agreement.

Global’s position is that it paid Poh Wah a fixed commission of $60 per worker, while Poh Wah contends that the allocation of profits per worker was 60 per cent to Global and 40 per cent to Poh Wah.

According to Global, the business ran for some six years before it was terminated by Poh Wah in July 2022 without reasonable notice.

Global said Poh Wah refused to make payment of substantial training fees, demanded that Global cease operations, and stopped allowing the training company access to its bank account.

Global alleged that Poh Wah’s conduct arose as a result of marital disputes between the construction firm’s director, Mr Kerwin Ng Long Fa, and his wife Alice Chong. Ms Chong is a shareholder of the training provider and sister of Mr Ben Chong.

But Poh Wah alleged that during a meeting in June 2022, Mr Chong told Mr Ng that Global had a lot of expenses, including “kickbacks” of between $300,000 and $400,000 to third-party companies or workers to induce them to sign up for the courses.

During a subsequent meeting in July 2022, Mr Chong said he gave kickbacks in cash and “NTUC vouchers”.

Poh Wah said that following Mr Chong’s admissions, the company was compelled to terminate the business collaboration as it had no intention of colluding with Global in its “illegal acts”, considering the possible legal sanctions and termination of its licence to run the training centre.

But Global argued that there was no report or complaint made by Poh Wah.

The training company added that its marketing efforts did not entitle Poh Wah to terminate the ongoing business operations.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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