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SINGAPORE: Court sides with APB over commercial fraud case

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Asia Pacific Breweries has successfully defended itself against a lawsuit from two European banks with regards to a commercial fraud case involving a former employee.

In 2004, Chia Teck Leng confessed to cheating a group of banks, which included Germany's Bayerische Hypo-und Vereinsbank (HVB) and Sweden's Skandinaviska Enskilda Banken (SEB), out of S$117m (US$79m) between 1999 and 2003.

As the finance manager of APB, Leng allegedly submitted to the banks false documents with forged signatures of top executives and used the money borrowed from the banks in casinos around the world.

In the lawsuit, the banks claim that, since Leng was acting as finance manager of  APB's Singapore unit when he borrowed funds, the company is bound by the terms of the loans to repay the money.

However, in a statement released this week, APB said that a court had rejected all of the five claims made by SEB and HVB against the brewer.

"The Court found it was SEB and HVB that made themselves 'easy prey', by disregarding their own manuals and normal banking procedures and ignoring the discrepancies and irregularities in the documents that were staring the bank officers in the face'", an APB statement said.

The Court also ordered SEB and HVB to pay the company its legal costs for defending the actions.

Two other banks that were defrauded, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation, withdrew their claims with costs payable to the company at the start of the trial.

The court dismissed SEB's and HVB's case amounting to approximately US$27m and US$32m respectively, save for ruling that APB has to return to SEB a sum of S$347,671.23 that was transferred from SEB to the company's account.

"The company is pleased that the court has ruled substantially in its favour. The rulings vindicate the company's stand that it was itself a victim of fraud," APB said.

"The court found that the company knew nothing about - and is not responsible for - the loans fraudulently obtained by Chia Teck Leng from various banks. Chia Teck Leng had obtained the unauthorised loans for his own benefit by submitting forged documents to the banks. In carrying out the fraud, Chia had acted alone."

For the full APB statement on the ruling, click here


Sectors: Beer & cider

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