Chew Soo Ho JC:

BRIEF FACTS

[1]I have delivered my oral judgment of this case on 9 June 2011 and I now append below my full decision.

[2]Sometime in September 1994, a meeting was held at Mutiara Hotel, Penang between the defendant and the plaintiff's chairman and director, Tan Sri Dato' Paduka William Chek Lin Kwai (Wiliam Chek) in the presence of two others where defendant had given various representations and assurances to William Chek to be a shareholder of Pindar International Ltd, a proposed company to be incorporated in the British Virgin Islands (Pindar) for the purpose of property development in Chengdu, China. Basing on those representations and assurances including a personal undertaking by the defendant that the plaintiff's financial contributions which represents the share equity in Pindar to be incorporated, would be realised together with the share of profits upon the completion of the proposed property development in China, the plaintiff paid a sum of USD565,000 for the 25% share equity in Pindar which was duly incorporated on 27 September 1994. The defendant held 32.5% of share equity in Pindar and is its chairman and managing director. William Chek of the plaintiff was made a director of Pindar. The remaining 42.5% of the share equity were taken up by the defendant's relatives.

[3]Sometime in October 1994, Pindar had entered into a joint venture with Minyuan Realty Development Office, Chengdu, China to undertake property development in Chengdu. As a result of the joint venture, a company known as Chengdu Youlian Real Estate Development Co Ltd China (Chengdu Youlian) was formed in China with Pindar holding 80% of the share equity while Minyuan Realty Development Office held the remaining 20%, for the property development in Chengdu, China. The defendant was also the managing director and legal representative of Chengdu Youlian

[4]On 28 August 1995, a shareholders' meeting of Pindar was held in Singapore attended by the defendant, William Chek on behalf of the plaintiff, shareholders Sim Seng Quee and Tay Seow Joo. It was agreed that the initial capital of Pindar of USD2,260,000 was to be paid progressively to ChengduYoulian as Pindar's share of investment and a sum of USD1,000,000 shall be raised by Pindar as a loan to Chengdu Youlian for the property development. By a shareholders' loan agreement dated 2 January 1996, all shareholders agreed to advance the USD1,000,000 proportionate to their respective shareholdings. Between 29 May 1996 and 16 October 1997, the plaintiff had remitted a total sum of USD247,000 to the personal bank account of the defendant and the bank account of Pindar in China, being the plaintiff's loan contribution. However, the plaintiff was not advised or being given any confirmation by the defendant whether he and his relatives had accordingly made the loan contributions pursuant to the shareholders' loan agreement.

[5]On 2 August 2000, the plaintiff's chairman and director, William Chek was unanimously removed as director of Pindar with immediate effect in a shareholders' meeting without the knowledge and consent of the plaintiff.

[6]The plaintiff came to know through its lawyer in China that the property development undertaken by Chengdu Youlian in Chengdu, China had been completed sometime towards the end of 2004. However, the plaintiff had not been given any report from Pindar or from the defendant on the progress of the property development undertaken through Chengdu Youlian and the financial affairs or statements despite requests having been made vide letters and personal visits. The plaintiff also came to know that the defendant had caused no less than 70 units of shoplots developed through Chengdu Youlian to be registered in the names of his children and relatives.

[7]Sometime in May 2006, the plaintiff had lodged a claim at the Chengdu Middle Class People's Court for the recovery of the said loan of USD247,000. As a consequences of this claim, Pindar had entered into a repayment agreemen