Two media veterans sued over $990,000 loan given to their business to promote Mandarin

Two media professionals, Mr Chua Chim Kang and Ms Lee Kuan Fung, are being sued by a businessman seeking repayment of a $990,000 interest-free loan he had given the pair in 2017.

Businessman Ren Xin Wu, a Canadian national who is originally from China, said the sum was for a company called Homing Holdings that was set up to promote the use of Mandarin in Singapore.

Mr Chua was a journalist at Chinese daily Lianhe Zaobao and had served as chief editor of the now-defunct Lianhe Wanbao.

He is now head and chief editor of Chinese news and current affairs at Mediacorp.

Ms Lee was a former associate editor of bilingual news site omy, and headed the Chinese media digital strategy department at the former Singapore Press Holdings (SPH).

She is now a freelancer.

In his suit, Mr Ren accused Ms Lee of mismanaging Homing, and accused Mr Chua and Ms Lee of breaching an agreement to repay the loan.

In a separate but related lawsuit, Ms Lee is accused of breaching her fiduciary duties by allegedly siphoning $40,000 from Homing after “orchestrating” a questionable transaction with another firm named Goldciti.

The two High Court suits are being heard together in a trial that started on Nov 12.

Mr Ren was introduced to Mr Chua in September 2015, the businessman’s lawyer, Ms Jasmin Kang, said in her opening statement.

According to Mr Ren, in August 2016, Mr Chua mentioned that Ms Lee was a very capable former colleague who had, together with him, planned a business venture.

Mr Ren started negotiations with the pair to explore a joint venture based on Ms Lee’s plan to set up a business to teach Mandarin, said Ms Kang.

As he does not live in Singapore, Mr Ren appointed a representative, Ms Huang Ming Jing, to oversee his investment in the venture.

On June 2, 2017, Ms Lee incorporated Homing Holdings in Singapore. She was appointed as a director of the company.

On July 26, 2017, Mr Chua, Ms Lee and Mr Ren signed an agreement, under which Mr Ren gave a $1 million cheque to Ms Lee.

The sum comprised $10,000 as his investment in exchange for 35 per cent of the share capital of the company, and an interest-free loan of $990,000 as working capital.

The agreement stated that Mr Chua’s 35 per cent stake would be held by Ms Lee.

Ms Lee also agreed to manage the company and to “invest intellectual property into the company” in exchange for the remaining 30 per cent of the share capital. 

Mr Ren said the loan was due on July 27, 2020, but the pair failed to pay up even though Mr Chua stated on Aug 3, 2020, that he would mortgage his house to repay the loan.

In September 2020, Mr Ren, through his then lawyers, served legal demands on the pair.

On Sept 30, 2020, Homing entered into a purported agreement with Goldciti, a management consultancy firm. It paid out $40,000 to Goldciti under this agreement.

On Dec 14, 2020, Mr Ren applied for Homing to be wound up. The application was granted by the High Court on Jan 22, 2021.

The company’s liquidators were granted powers to take legal action against Goldciti and Ms Lee.

On Sept 9, 2022, the company filed a lawsuit against Goldciti and Ms Lee, seeking the return of the $40,000.

On July 24, 2023, Mr Ren sued Mr Chua and Ms Lee for breaching the agreement to repay the $990,000 loan.

What the defendants say

In his opening statement, Mr Salem Ibrahim, who acts for the defendants, said that when Mr Ren was persuading the pair to start a business with him, Mr Chua did not want to be involved in the day-to-day management.

But Mr Ren insisted that Mr Chua be given a 35 per cent stake, said Mr Salem. 

He said Mr Ren wanted Ms Lee to leave SPH and manage the venture full-time, so she did.

The defendants said revenues dived in 2020 as a result of the Covid-19 pandemic, and Mr Ren wanted the $990,000 to be returned to him.

By then, Homing was insolvent on the books.

Mr Salem said Ms Lee was given legal advice that it would not be right for Homing to meet Mr Ren’s demands as other creditors were waiting to be paid.

The lawyer added that Mr Ren brought pressure on the defendants by issuing two sets of legal demands on them, followed by a demand on Homing.

He said Ms Lee suffered the stress and humiliation of having had the contents of a lawyer’s letter being pasted on the wall next to the door of her home.

Ms Lee subsequently complained to the Law Society of Singapore, and the lawyer concerned was sanctioned, he said.

According to Ms Lee, confronted with the legal demands, she turned to Goldciti for professional services.

The management consultancy firm prepared a 17-page report providing alternative financial solutions.

However, Mr Ren’s lawyer argued that the purported agreement with Goldciti was nothing more than a sham to siphon money from Homing.

Ms Kang disputed the authenticity of the report and questioned the decision to spend $40,000 on a consulting agreement when Homing was insolvent.

She also described Ms Lee’s complaint to the Law Society as a red herring because the lawyer in question had only been given a warning for unthinkingly posting the demand without first placing it into an envelope.

The trial resumes on Nov 14.

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

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