General Division of the High Court · Decided 19 October 2026

Discovery Key Investments Ltd v Fullerton Capital Ltd and another (Yeo Wee Guan and others, third parties)

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[2026] SGHC 218Case no. Suit No 435 of 2019

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Audrey Lim J:
Parties and background
[1] In HC/S 435/2019 (“Suit 435”), the claimant (“DKI”) is an investment holding company incorporated in the British Virgin Islands (“BVI”). The first defendant is Fullerton Capital Limited, a company also incorporated in the BVI (“FCL(BVI)”). At the material times, there were at least four entities with the name “Fullerton Capital Limited” or “FCL”, ie, FCL(BVI), an entity incorporated in the United Kingdom (“FCL(UK)”), an entity in Hong Kong first incorporated as FCM International Ltd (“FCL(HK)”), and an entity in the Cayman Islands (“FCL(Cayman)”). The second defendant (“Raymond”) was at all material times the controlling mind and will of the FCL entities, as well as of Qilin World Capital Limited (“Qilin”) and Carrington Capital Limited (“Carrington”). Where the parties or documents do not refer to a specific FCL entity, I will refer to that entity as “FCL”.
[2] The first third party (“Julius”) had introduced DKI and FCL to each other to explore potential loan arrangements. The second third party (“UOBKH”) is a brokerage firm which DKI and FCL(BVI) held brokerage accounts with (respectively, “DKI A/c” and “FCL(BVI) A/c”). The third third party (“Morgan”) was the Managing Partner of Qilin and FCL(BVI).
[3] The dispute arose from a non-recourse loan between DKI and FCL(BVI) under which DKI provided 7.2m shares (“Shares”) that it held in the Stars Group Inc (“TSG”) as collateral for the loan (“Loan Transaction”). The transaction was documented in three main agreements with FCL, which turned out to be FCL(BVI). The first was the Stock Secured Financing Agreement of 10 August 2017 (“SFA”), the principal agreement between FCL as lender and DKI as borrower, which governed the terms of the loan. The second was the Control Agreement of 10 August 2017 (“Control Agreement”), an ancillary agreement between DKI and FCL governing control of the Shares. The third was the Custody Agreement signed by Tang Hao (DKI’s director) and Raymond (on FCL’s behalf) (“Custody Agreement”). The purport of the Control and Custody Agreements was to ensure that once the Shares were placed in the DKI A/c, they would immediately come under the control of “FCL”.
[4] Essentially, DKI claims it was misled into believing that it had entered into the SFA and Loan Transaction with FCL(UK), when in fact the FCL that executed the SFA (and other documents) was FCL(BVI).
Claimant’s case
[5] Ricky, DKI’s representative, attested as follows.
[6] In early 2017, Tang Hao authorised Ricky to seek financing for DKI to be secured by its shares in TSG. He informed Ricky that the shares were meant to be a long-term investment and were not meant to be sold, they were only to be leveraged to raise capital for further investments, and any financing arrangement had to be entered into with a regulated entity. Ricky’s initial attempts to obtain financing from global institutions and banks failed. In July 2017, Ricky came to know Julius (who was employed by SIMCOE Asia Group Inc or “SIMCOE”). Julius proposed private lenders such as SIMCOE, Qilin and Carrington. However, Ricky did not find the terms offered by these entities to be satisfactory. Particularly, he informed Julius that DKI wished to transact with a regulated entity, which SIMCOE, Qilin and Carrington were not.
Identity Representation
[7] On around 1 August 2017, Julius informed Ricky that Raymond and Morgan had another entity, “Fullerton Capital Limited”, that could be a potential lender to DKI. Ricky emphasised to Julius that DKI wanted a lending entity that was “more proper”. After speaking to Morgan, Julius informed Ricky that FCL was regulated by the United Kingdom Financial Conduct Authority (“FCA UK”) and that FCL was controlled by Raymond. Based on Julius’s representation, DKI thus believed that FCL referred to FCL(UK) – an entity incorporated in the United Kingdom (“UK”) and regulated by the FCA UK. This formed the basis of the “Identity Representation”.
[8] When Julius informed Ricky that FCL was a regulated entity based in the UK and maintained a website, Ricky conducted a check on the Financial Services register (“FS Register”) on the FCA UK website, which showed FCL was registered with the FCA UK. He also visited the FCL website with the domain name of www.fullertoncapital.com (“FCL Website”). The FCL Website stated that FCL was “an Appointed Representative of Met Facilities LLP (“MET”) … which is authorised and regulated by the [FCA UK]” and reflected FCL’s address as an address in the UK.
[9] After Ricky indicated DKI’s interest in transacting with FCL (which he believed to be FCL(UK), regulated by the FCA UK), on about 4 August 2017, Julius emailed a draft term sheet dated 3 August 2017 (“3/8/17 Term Sheet”) for the Loan Transaction. The 3/8/17 Term Sheet displayed a logo of FCL, which was the same logo displayed on the FCL Website.
[10] DKI thus claims the Identity Representation was reinforced by the FCL Website, FS Register, and the identical FCL logo found on the 3/8/17 Term Sheet and the FCL Website.
Financing Representation
[11] Next, DKI claims the defendants made the “Financing Representation”, ie, that they and/or Morgan further represented through Julius to Ricky that FCL had sufficient independent finances to disburse the intended loan to DKI and would not sell the pledged Shares to disburse the loan.
[12] Prior to executing the SFA, Ricky informed Julius that it was important to DKI that the loan be funded on a “delivery versus payment” or “DVP” basis, ie, the loan moneys would be released by the lender to DKI simultaneously with the delivery of the pledged security/collateral by DKI to the lender. This necessarily meant the lender had its own independent resources to disburse the loan and would not have to sell the pledged security/collateral to do so. Julius understood the meaning and importance of a loan being funded on a DVP basis and he represented to Ricky that the loan would be funded on such a basis.
[13] The Financing Representation was repeated in the 3/8/17 Term Sheet, which stated the TSG shares would be “pledged to the Lender as security” and the “Lender shall not, at any time, short sell the securities of [TSG]”. It was also reflected in the draft SFA (and the eventual signed SFA) in cl 2(f) which provided for a “simultaneous exchange” of the loan amount and the shares.
Execution of the SFA and discovery of FCL’s identity
[14] Relying on the Identity and Financing Representations (collectively, “Representations”), DKI executed the SFA and Control Agreement with FCL (which it understood to be FCL(UK)) on 10 August 2017. Under the SFA, DKI would pledge the 7.2m Shares, then worth around CAD 130m, for the loan to be disbursed. Pursuant to cl 2(d) of the SFA, there was a 12-month prepayment lockout period (“Lockout Period”). Unbeknownst to DKI, the entity that was the counterparty in the SFA and Control Agreement was FCL(BVI).
[15] On around 23 August 2017, DKI transferred the Shares to the DKI A/c, in which the Shares were to be held pursuant to the SFA and Control Agreement. However, no loan amount was disbursed to DKI then, and Ricky thus followed up with Julius in around end-August to enquire about the delay in the loan disbursement.
[16] Again, unbeknownst to DKI, on 30 August 2017, just seven days later, the defendants caused the Shares to be transferred from the DKI A/c to the FCL(BVI) A/c. This was made possible because (and it is undisputed that) Tang Hao and Raymond had pre-signed an undated Share Transfer Instruction form (“STI”) each respectively for DKI and FCL. The forms were sent by FCL to UOBKH on around 24 August 2017. It was undisputed that pursuant to the DKI STI, DKI instructed UOBKH to accept shares into the DKI A/c, and pursuant to the FCL STI, FCL(BVI) instructed UOBKH to receive the shares from the DKI A/c into the FCL(BVI) A/c.
[17] It was undisputed that FCL subsequently issued to DKI Closing Statements on 24 August, 30 August and 20 September 2017 (“1st Closing Statement”, “2nd Closing Statement” and “Final Closing Statement” respectively). The Final Closing Statement, issued as a consolidated statement for the 7.2m Shares, superseded the earlier Closing Statements which reflected the 7.2m Shares in two tranches. Particularly, that Statement stated the “Net Loan Amount Funded” to be CAD 103,075,156.80 (“Loan Amount”) and the Spot Price being CAD 21.78 per share (or over CAD 156m for 7.2m Shares).
[18] It was undisputed that: (a) FCL(BVI) sold all 7.2m Shares between 5 and 8 September 2017 for CAD 134,184,201.38 (“Sale Proceeds”); and (b) after the Shares were sold, DKI received the Loan Amount in six tranches between 8 and 22 September 2017. Raymond attested that the Loan Amount was disbursed from the Sale Proceeds of the Shares. Ricky attested that DKI did not, at that time, know the Shares were sold to raise the Loan Amount to disburse to DKI. Thus, FCL(BVI) had breached the term under the SFA that there would be a simultaneous exchange of the Loan Amount for the Shares. Ricky claimed the remainder of the Sale Proceeds was pocketed by the defendants, Morgan and Julius.
[19] As DKI was kept in the dark about the falsities of the Representations, it then serviced its repayment obligations under the SFA, based on a schedule setting out 13 interest payments to FCL from 29 September 2017 until 1 September 2020. It is undisputed that between September 2017 and December 2018, DKI made the first six interest payments totalling CAD 4,116,420 by telegraphic transfer to FCL’s bank account.
[20] By May 2018, the price of TSG shares had increased substantially, and the value of the Shares had risen to approximately CAD 327 million. Ricky thus emailed Morgan to enquire whether DKI could make an early repayment of the loan and redeem the Shares. Although Morgan assured Ricky over a phone call that he and Raymond would respond with a proposal, no such proposal ever came. At that time, Ricky was not in a hurry to insist on receiving an immediate proposal as the Lockout Period had not expired.
[21] Between November 2018 and February 2019, Ricky sent multiple emails to Morgan to follow up on DKI’s request to repay the loan and redeem the Shares, all of which went unanswered. Repeated attempts to contact persons from FCL thereafter also yielded no result. Meanwhile the FCL Website had been shut down on 26 February 2019.
[22] DKI became suspicious when it lost all contact with FCL. Ricky thus contacted UOBKH on 27 February 2019 to check on the status of the Shares. He was informed that they had been transferred to the UOBKH account of FCL, being an “offshore entity”, from as early as 30 August 2017 (when the Loan Amount had not been disbursed to DKI). One Lewis Ho, DKI’s representative, made further inquiries with UOBKH and was informed on 28 February 2019 that FCL was an “offshore company – Virgin Islands (British)”. These discoveries pertaining to FCL’s identity came as a complete shock to DKI and revealed for the first time the falsity of the Identity Representation.
Termination of SFA and commencement of Suit 435
[23] Immediately thereafter, on 28 February 2019, DKI’s then-solicitors in Hong Kong (“HWB”) wrote to FCL, to enquire on the whereabouts of the Shares and whether FCL had disposed of them. DKI was then unaware that the Shares had been sold by FCL(BVI) in September 2017. In that letter, DKI stated that it could pay the next interest instalment due on 1 March 2019 (“1/3/19 Instalment”) but was withholding payment due to its concern that FCL had disposed of the Shares and that it intended to repay the loan subject to FCL returning the Shares to DKI.
[24] On 4 March 2019, DKI received an unsigned Notice of Default from FCL (“4/3/19 Default Notice”) stating that the SFA would be terminated if the 1/3/19 Instalment was not paid. Subsequent correspondence ensued between HWB and JLC Advisors LLP (“JLC”), FCL’s then lawyers. On 14 March 2019, JLC informed HWB that FCL had elected to terminate the SFA on account of DKI’s failure to pay the 1/3/19 Instalment. On 20 March 2019, DKI’s then Singapore lawyers, Oon & Bazul LLP (“O&B”) responded to say that FCL’s purported termination of the SFA was a repudiatory breach of the SFA, and that DKI thus elected to terminate the SFA as a result of FCL’s breach.
[25] On 26 April 2019, DKI commenced Suit 435. It claims fraudulent misrepresentation against the defendants, or alternatively under s 2 of the Misrepresentation Act (Cap 390, 1994 Rev Ed) (“Misrepresentation Act”) against FCL(BVI), pertaining to the Representations; and for wrongful termination or breach of the SFA against FCL(BVI). DKI further claims conspiracy (by lawful and unlawful means) against the defendants, essentially to cheat DKI and deprive it of its Shares by selling them and using the Sale Proceeds to fund the disbursement of the Loan Amount to DKI. On 6 May 2019, the court granted a worldwide freezing order against the defendants and Morgan. In the course of discovery in Suit 435, DKI discovered that FCL(BVI) had sold the Shares before disbursing the Loan Amount to DKI.
FCL(BVI)’s change of name and dissolution
[26] It was undisputed that in November 2018, FCL(UK)’s name was changed to Fullerton Asset Management Limited. In around March or April 2022, Raymond procured the dissolution of FCL(BVI) while Suit 435 was ongoing and the freezing order remained in force, and concealed this from DKI. When DKI discovered this in July 2022, it commenced proceedings in the BVI to restore FCL(BVI) to the BVI Register of Companies. This application was granted in October 2022. FCL(BVI) is currently in liquidation.
FCL(BVI)’s pleaded case
[27] In its Defence, FCL(BVI) denies it was wholly owned or managed by Raymond, claiming instead that it was managed by Morgan, who also at all times managed the Loan Transaction. Essentially, FCL(BVI) denies it made the Representations (via Julius) and claims that DKI knew FCL(BVI) would sell the Shares to raise funds to advance the loan to DKI. It also claims that Julius was never authorised to make any representations on its behalf, but that he was instead DKI’s agent. Essentially, FCL(BVI) denies DKI’s claims against it.
[28] Upon recognition of FCL(BVI)’s British Virgin Islands liquidation as a foreign main proceeding on 8 April 2024 (in Re Fullerton Capital Ltd (in liquidation) [2024] SGHC 155), the continuation of proceedings concerning FCL(BVI) was automatically stayed under Article 20 of the UNCITRAL Model Law on Cross-Border Insolvency. On 24 November 2025, the court granted a carve-out for DKI to pursue Suit 435 against FCL(BVI), subject to the undertaking that FCL(BVI) and its liquidators “be bound by any judgments, orders, and findings concerning [FCL(BVI)’s] liability to [DKI]”. The carve-out expressly permits DKI’s claims against FCL(BVI). FCL(BVI) was not given permission to pursue any claim although it had initially filed a third party claim (jointly with Raymond) against Julius. FCL(BVI) took no part in the trial of Suit 435, and its liquidators undertook to be bound by the court’s findings.
Raymond’s version of events
[29] I set out Raymond’s version of events briefly here.
[30] Raymond did not control FCL(BVI) and was merely its director. FCL(BVI) was managed by Morgan. The Loan Transaction was Morgan’s transaction, negotiated and managed by Morgan independently. Morgan made all the decisions on transactions brought in by him (including the Loan Transaction), and only informed Raymond after agreeing with external parties. Raymond’s role for Morgan’s transactions was limited to giving instructions to FCL(BVI)’s bank and stockbroker according to Morgan’s instructions.
[31] Raymond denies the Representations were made. He claims Julius was never authorised to act or make the Representations on his behalf; DKI’s preference to transact with a regulated entity was never conveyed by Julius to him; and Morgan had informed Julius that the potential lending entity was a non-regulated entity. Raymond did not instruct Morgan or Julius to make the Representations and he had no knowledge of any Representations made by them to Ricky. Raymond also did not prepare the draft SFA nor instruct anyone to send the draft SFA to DKI.
[32] DKI would have known from the SFA (particularly cl 2(f)) that FCL(BVI) would sell the Shares to raise funds to advance the loan to DKI. When the Shares were transferred from the DKI A/c to the FCL(BVI) A/c on 30 August 2017, DKI did not wait for simultaneous exchange of Shares for the Loan Amount and FCL(BVI) thus proceeded to sell the Shares. DKI had thus waived the need for simultaneous exchange and consented to FCL(BVI)’s sale of the Shares to speed up the disbursement of the Loan Amount. Moreover, FCL(BVI) could rely on cl 10(k) of the SFA and cl 9.3 of the Control Agreement (“EA Clauses”) to exclude itself from any liability to DKI.
[33] In any event, it was DKI who defaulted on the SFA. In particular, when DKI defaulted on the 1/3/19 Instalment even after FCL(BVI) issued the 4/3/19 Default Notice, FCL terminated the SFA on 14 March 2019 (see [24] above).
[34] FCL(BVI)’s dissolution in 2022 was carried out by Ms Zhou Li Hua (“Zhou”), FCL(BVI)’s then director, without informing Raymond. Raymond had ceased to be a director in FCL(BVI) with effect from 20 March 2018.
[35] Raymond commenced third party proceedings against Julius, UOBKH and Morgan, essentially claiming a contribution under s 15 of the Civil Law Act (Cap 43, 1999 Rev Ed) (“CLA”) should DKI succeed in its claims against him.
Issues to be determined
[36] The main issues to be determined are as follows:
(a) whether FCL(BVI)’s corporate veil should be pierced;
(b) whether Julius and Morgan were authorised by the defendants to make representations to DKI;
(c) whether DKI’s claims for misrepresentations are made out;
(d) whether either party was entitled to terminate the SFA;
(e) whether DKI’s claim for conspiracy is made out;
(f) whether DKI’s actions are affected by the EA Clauses;
(g) Raymond’s third party claims; and
(h) damages.
Whether FCL(BVI)’s corporate veil should be pierced
[37] I deal first with whether FCL(BVI)’s corporate veil should be pierced and Raymond be made liable for FCL(BVI)’s wrongdoing (if any).
[38] The court may, in exceptional cases, pierce the corporate veil. There are two justifications for doing so: where the evidence shows that the company is not in fact a separate entity, or where the corporate form has been abused to further an improper purpose (Tjong Very Sumito v Chan Sing En [2012] 3 SLR 953 at [67]). Where the argument of alter ego is raised, the key question is whether the company is carrying on the business of its controller (Alwie Handoyo v Tjong Very Sumito [2013] 4 SLR 308 (“Alwie Handoyo”) at [96]).
[39] Raymond pleads that although he was the director of FCL(BVI), he did not wholly own or control FCL(BVI); at all material times, it was managed by Morgan and acted under his instructions. Raymond further claims that he and Morgan were equal partners in FCL(BVI). I disbelieve Raymond. On the evidence, I find that FCL(BVI) was carrying on Raymond’s business and was Raymond’s alter ego. Thus, FCL(BVI)’s corporate veil should be pierced.
Raymond wholly owned, controlled and managed FCL (BVI)
[40] Raymond was the sole director and shareholder of FCL(BVI) from 11 March 2014 (when it was first incorporated as Sansim Holdings Limited) until 19 March 2018. He claims that on 20 March 2018, he sold FCL(BVI) to Zhou for US$1, he ceased to be its director and Zhou became the sole director of the company. However, in court, he admitted he remained FCL(BVI)’s de facto director and beneficial owner until it was wound up. He thus wholly owned FCL(BVI) at all material times, contrary to his initial claim (see [39] above).
[41] Raymond also conceded multiple times in court, that he was the “controlling mind and will” of FCL(BVI) at all material times. This in itself is insufficient to pierce the corporate veil, as accepting otherwise would mean that the veil of every one-man company could be lifted, defeating the very purpose of incorporation (Mohamed Shiyam v Tuff Offshore Engineering Services Pte Ltd [2021] 5 SLR 188 at [71]). However, I find the degree and manner of control that Raymond exercised over FCL(BVI) demonstrate that it was a corporate extension of himself. I give a few examples.
[42] First, Raymond renamed the company at will. He changed its original name to FCL(BVI). I disbelieve Raymond that this was because Morgan found “Sansim” unsuitable. There is no evidence to support his claim; he was also the controlling mind and will of all the FCL entities. He then changed its name to OXT Cap Limited on 6 March 2019, before reverting it to FCL on 15 March 2019. In his affidavit dated 30 May 2019 (“30/5/19 Affidavit”), filed to set aside the freezing order (see [25] above), he stated that he incorporated various entities or changed the names of existing entities that he owned, to “FCL” as he “wanted to use this name for [his] companies” – this included FCL(BVI), FCL(HK) and FCL(UK). He further stated that he renamed FCL(BVI) to OXT Cap Limited in March 2019 and he later renamed it FCL.
[43] Notably, the renaming to OXT Cap Limited in March 2019 was long after it had been purportedly sold to Zhou. This shows he continued to control the company completely. When confronted in court with his 30/5/19 Affidavit, Raymond claimed the renaming of FCL(BVI) was made by Zhou and his earlier explanation was a mistake, which I disbelieve. He could not explain why the statement in his 30/5/19 Affidavit stood uncorrected for years (if it was a mistake) despite his claim that he had wanted to rectify it. I find the affidavit recorded the truth and that Raymond sought to distance himself from the act of renaming the entity only when its significance to this dispute became apparent.
[44] Raymond also confirmed in court that he retained control of FCL(BVI) through nominees, and that the individuals appearing as its directors or shareholders (including Zhou) were all his nominees. I thus reject his narrative that Zhou wound up FCL(BVI) on her own volition, given that Zhou was his nominee director and shareholder.
[45] Next, Raymond instituted the internal processes that FCL(BVI)’s employees were required to follow. In his email of 15 November 2016 titled “New Process”, he set out detailed instructions on the preparation of contractual documents, specified precise amendments to the text of such documents, and allocated specific tasks to employees who answered to him. In court, Raymond accepted that he was “setting out the proper flows process” and was “very determined to set up the structure” for his entities, which included FCL(BVI).
[46] Raymond also controlled FCL(BVI)’s finances. He was the sole signatory of its bank account and the FCL(BVI) A/c; he fully controlled FCL(BVI)’s cash movements, its bank accounts and the FCL(BVI) A/c at all material times; and he admitted that Morgan did not have control nor access to FCL(BVI)’s bank accounts. This continued even when Zhou became shareholder and director in name on 20 March 2018 – she authorised Raymond to act on FCL(BVI)’s behalf with full authority to open, operate and close any bank and brokerage accounts. Further, although Raymond had instructed Morgan to find a buyer for the Shares, he caused the Shares to be sold in September 2017 and only informed Morgan of this after the fact.
Raymond drew no distinctions between his assets and those of FCL(BVI)
[47] Further, Raymond dealt with the Sale Proceeds as though they were his. In his affidavit filed to account for the Sale Proceeds, he stated that, after deducting the Loan Amount to DKI, UOBKH’s transaction fees, Julius’s fees and Amaratus Capital LLC’s placement fees, the remaining balance (of some CAD 20.2m) was paid to himself and his other entities. Specifically, CAD 3m was paid to Raymond, and CAD 11.2m and CAD 6m were paid to Carrington and Qilin respectively. Raymond admitted both entities belonged to him and he had received (directly and indirectly) the CAD 20.2m. He produced no evidence establishing any basis for the payments to himself or these entities. It is clear that the decision to move these funds out of FCL(BVI) was taken by Raymond alone and that he had treated FCL(BVI)’s assets as his to distribute.
Raymond controlled the Loan Transaction
[48] Next, I disbelieve Raymond’s claims that Morgan was the controlling mind and will and decision-maker for the Loan Transaction (which was Morgan’s deal), and that Raymond’s role was “peripheral at most”.
[49] My findings above and below show that Raymond was in control of and the ultimate decision-maker for the Loan Transaction, which included the key steps taken therein and using FCL(BVI) as the entity for the SFA, and that Morgan answered to him. This is even if it was Morgan who largely liaised with Julius or Ricky on the Loan Transaction. It makes no sense for Raymond to admit that he was the controlling mind and will of FCL(BVI) but maintain that Morgan controlled the Loan Transaction that was executed by FCL(BVI).
[50] Ms Sally Lee (“Sally”), the legal executive of FCL(BVI) and its associated companies, testified that before a draft transaction document was sent out or signed, it had to be approved by Raymond. She also conceded that she had to check with Raymond pertaining to the documentation for the Loan Transaction before “go[ing] ahead”.
[51] On 8 August 2017, just two days before the SFA was executed, Raymond directed that FCL(BVI) be used as the lender for the Loan Transaction by sending an email to Morgan and Sally to “Use Fullerton BVI”. I disbelieve Raymond’s assertion that he was instructed by Morgan to do so and he had no choice but to follow Morgan’s instructions. His assertion is contradicted by his claim that he would have objected if Morgan had instructed that FCL(HK) or FCL(UK) be used instead. On the same day, Sally asked Raymond and Morgan to review various changes made to the draft SFA, and it was after Morgan had said “looks good” that Raymond replied “yes go”. Then, on 10 August 2017, when Sally asked Raymond and Morgan to review the final version of the draft SFA, it was Raymond who gave the final approval. Raymond thus had the final say in relation to the contents of the SFA and contracting entity (FCL(BVI)).
[52] It was Raymond who executed the SFA, Control Agreement and Custody Agreement on FCL(BVI)’s behalf. I disbelieve he had signed the documents “blind”, that he never saw a copy thereof before signing them, and that he read them for the first time when Suit 435 was commenced in 2019. I find he was attempting to disassociate himself from the Loan Transaction.
[53] After the SFA was executed, the emails among Sally, Raymond and Morgan on the preparation of the 1st Closing Statement, 2nd Closing Statement and Final Closing Statement, show that Raymond gave the final approval on their contents. Raymond further controlled FCL(BVI)’s bank accounts and the FCL(BVI) A/c, he determined the subsequent sale of the Shares from FCL(BVI) to a third party, and he dealt with the Sale Proceeds as though they were his (see [46]–[47] above).
[54] Although Morgan could make certain decisions pertaining to the Loan Transaction, Raymond controlled the Loan Transaction and was its ultimate decision-maker. I accept Morgan’s testimony that he had some discretion in negotiating the terms of the Loan Transaction but within pre-approved parameters set by Raymond; that anything beyond those parameters required Raymond’s approval; and that even where a deal fell within the pre-approved parameters, Raymond’s role was no mere formality. Raymond was kept constantly apprised of the progress of, and gave instructions pertaining to, the negotiations. He pleads that he was kept apprised of the negotiations between Julius and Morgan on the transaction, including the proposed terms thereof.
[55] It is thus clear that Raymond and Morgan were not equal partners in FCL(BVI) or that Morgan controlled the Loan Transaction. Raymond accepted Morgan was neither employed by FCL(BVI) nor engaged as an independent contractor. I accept that Morgan was given the title of Managing Director so that he could represent and conduct negotiations on FCL(BVI)’s behalf.
Whether Julius and Morgan were authorised by the defendants to make representations to DKI
[56] I next consider whether Julius and Morgan were authorised by the defendants to make representations pertaining to the Loan Transaction to DKI.
[57] I start with Julius. DKI’s case is that the Representations were orally conveyed to Ricky by Julius who had the authority from the defendants to do so. It is undisputed that Julius liaised with Morgan on the potential Loan Transaction with DKI. The representations that flowed through Julius may be attributed to the defendants if he was authorised by them (either expressly or by implication from their conduct and actions) to make the representations (Banque Nationale de Paris v Tan Nancy [2001] 3 SLR(R) 726 at [63]–[64]). The cornerstone of both express and implied actual authority is the consensual agreement between the principal and agent who will be deemed to have consented if they have agreed to what, in law, amounts to such a relationship, even if they later profess to disclaim it (Alphire Group Pte Ltd v Law Chau Loon [2020] SGCA 50 at [7]; Alwie Handoyo at [148]). A principal would be liable for its agent’s acts (including for fraud) when the acts are within the agent’s actual or apparent authority (Ong Han Ling v American International Assurance Co Ltd [2018] 5 SLR 549 at [208]).
[58] Thus, even if Julius were an “independent contractor”, in that he was want to not an employee of FCL(BVI) or FCL when he conveyed any representations to Ricky, this does not mean that he could not have been FCL(BVI)’s agent in relation to the Loan Transaction. The question is whether the defendants have authorised him to convey certain representations to DKI. As a preliminary point, that Julius may also have conveyed representations on DKI’s behalf to FCL is irrelevant to DKI’s claim against FCL(BVI) for misrepresentation.
[59] I find there was an agency relationship and that Julius was authorised by the defendants to deal with DKI on the Loan Transaction.
[60] First, Raymond knew of and acquiesced in Julius’s role as the conduit of information to DKI. He knew that Morgan was in discussions with Julius on the proposed Loan Transaction, and that Julius was acting as a middleman, conveying information between the prospective borrower and Morgan. Raymond was content to leave it to Julius to convey to DKI the information Julius received from Morgan and he did not ask to deal with the borrower directly although he controlled the FCL entities. In court, Raymond accepted that if Morgan had FCL(BVI)’s authority to convey to Julius information for Julius to pass on to DKI, then Julius would have been acting as FCL(BVI)’s agent.
[61] Second, Raymond positively equipped Julius to speak for FCL(BVI). He asserts that Julius was a “middleman” between DKI and the defendants. He further claims that Julius was responsible for communicating all terms and conditions of the Loan Transaction to DKI and that Julius owed the defendants a duty of care to convey their representations accurately to DKI. Before the SFA was signed, Raymond conferred on Julius the title of “Executive Director” of FCL and agreed to him being given an FCL name card and email address in that capacity. In doing so, Raymond held Julius out as having authority to speak on behalf of the proposed lender (which turned out to be FCL(BVI)). I reject Raymond’s claim that it was ultimately Morgan’s decision to confer the title to Julius, as the internal FCL emails show otherwise and given that Raymond controlled the FCL entities.
[62] Third, Julius was paid CAD 8m for his services pertaining to the Loan Transaction by FCL(BVI) pursuant to: (a) a Consultant Agreement between FCL (signed by Raymond) and Julius dated 10 August 2017 for 6% of the gross loan tranche (“Consultant Agreement”); and (b) a Back-end Commission Agreement also between FCL (signed by Raymond) and Julius dated 31 August 2017 for 1.5% of the net loan tranche (“BEC Agreement”). Julius agreed that FCL was to pay him under these agreements.
[63] Raymond also admitted that FCL(BVI) was liable to pay Julius under the agreements. He claims however that the 6% fee was ultimately borne by DKI, as it was deducted from the Loan Amount and DKI was obligated to repay the loan in full, including that sum. This does not assist Raymond. FCL(BVI) was the party contractually liable to Julius for the sums under the Consultant and BEC Agreements and the agreements clearly stipulate that the fees payable to Julius were for Julius’s services provided to FCL.
[64] Following from Julius’s communications with Ricky (representing DKI) on the Loan Transaction, Raymond executed the transaction. I thus find that Julius had actual authority, from FCL(BVI) and through Raymond (being its director and controller), to convey representations to DKI pertaining to the Loan Transaction.
[65] I turn to Morgan, who communicated with Julius regarding DKI’s interest in obtaining a loan. I similarly find that Morgan had actual authority from the defendants to convey representations to DKI through Julius pertaining to the Loan Transaction.
[66] Raymond cannot dispute that Morgan would have had authority to represent FCL(BVI) in the negotiations leading up to the SFA if he claims Morgan managed FCL(BVI) and the Loan Transaction (see [39] and [48] above). In any event Raymond knew at all material times that Morgan was in discussions with Julius on a potential loan transaction with a prospective borrower, and that Julius was the middleman through whom information would reach that borrower (see [60] above). I have found that Raymond was in control of the Loan Transaction, that Morgan was authorised by Raymond to negotiate the terms of the loan within certain parameters, and that Raymond was kept apprised of and gave instructions pertaining to the negotiations (including the proposed terms) that led to the SFA (see [48]–[54] above). Having allowed Morgan to make representations to DKI (which Raymond knew would pass through Julius), Raymond then signed off on the documents pertaining to the Loan Transaction.
The Identity Representation
[67] I now deal with DKI’s primary case in fraudulent misrepresentation. The requirements for a claim in fraudulent misrepresentation are well-established. There must be a representation of fact made by words or conduct and made with the intention that it should be acted upon by the claimant. It must be proved that the claimant acted upon the false statement and he suffered damage by so doing. Finally, the representation must be made with the knowledge that it is false; it must be wilfully false or at least made in the absence of any genuine belief that it is true (Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435 at [14]; Chan Pik Sun v Wan Hoe Keet [2024] 1 SLR 893 at [66]).
Whether the Identity Representation was made to DKI
[68] Essentially, the Identity Representation is that Ricky was informed by Julius that DKI would be transacting with a UK-incorporated entity that was regulated by the FCA UK. Julius had obtained this information from Morgan. I find the Identity Representation was made.
[69] I accept that DKI was concerned that the loan financing should be made with a regulated entity (see [6] above). This made sense given the substantial TSG shares (worth over CAD 100m) that DKI intended to leverage as collateral for the loan. I also accept Ricky’s testimony that Julius initially proposed private lenders such as SIMCOE, Qilin and Carrington, which Ricky rejected. Julius attested that SIMCOE was initially proposed as the lending party, whilst Morgan attested that Qilin and Carrington were proposed.
[70] Next, I accept, based on Ricky’s and Julius’s testimony, that Julius then informed Ricky that FCL could be a potential lender whereupon Ricky told Julius that DKI wanted a lending entity that was “more proper”. Morgan also attested that Julius had informed him that DKI did not want to transact with Qilin as it wanted something more “proper”.
[71] I further accept Ricky’s testimony that Julius then reverted to Ricky to say that FCL was regulated by the FCA UK. Ricky thus believed that FCL was a UK-incorporated entity regulated by the FCA UK. This is corroborated by Julius as follows, which I accept. After Ricky said he wanted a “more proper” lending entity, Julius relayed this to Morgan whereupon Morgan responded, “Would it help if Fullerton was FCA-regulated?” and informed Julius that FCL was FCA-licensed. Julius did not know what an FCA-regulated company was. Nevertheless, he conveyed to Ricky in identical terms Morgan’s response. In court, Ricky agreed this conversation with Julius occurred. I also accept Julius’s testimony that it was Morgan who told him that FCL was FCA-regulated.
[72] I accept Morgan’s testimony that when Julius informed him that DKI wanted to transact with an entity that was more “proper”, Morgan, acting on Raymond’s standing instruction to propose FCL or Carrington for a non-recourse loan arrangement, then put forth these entities to Julius. When Julius indicated that DKI was interested in FCL, Morgan sought Raymond’s approval to use it as the lender, Raymond verbally told him to proceed to use FCL, and Morgan communicated this to Julius.
[73] However, in his AEIC, Morgan claimed he did not recall informing Julius that FCL was regulated, whether by the FCA UK or otherwise, which I disbelieve. In cross-examination, Morgan became very sure that he never told Julius that FCL was FCA-regulated. This contrasts with other material aspects of his dealings with Julius over the same period, where Morgan professed to remember nothing. For instance, he could not recall whether he had informed Julius that at that time, there was an FCL(BVI) and an FCL(UK), and claimed that “in my mind, we were talking about BVI”. He could not recall whether he suggested to Julius the lending entity as FCL(BVI), although he then said that he believed he did so. But this contradicts his AEIC where he said that Raymond had all the while asked him and Julius to convey to DKI that the transacting party would be FCL without specifying which FCL, and the fact that FCL(BVI) would be the transacting party was not disclosed to DKI at any point in time. He also claimed that he was unsure whether he had directed Julius to the website of FCL but was somehow sure that Julius had searched online for the FCL Website. I disbelieve Morgan could not recall the material events pertaining to the discussions leading to the execution of the SFA. Importantly, Morgan knew (through Julius) that DKI had rejected Qilin as it wanted a lending entity that was more “proper”. It makes no sense for Ricky to have accepted another entity proposed by Morgan, ie, FCL, without more, when Ricky had never heard of FCL then – unless Ricky was informed that it was regulated.
[74] In fact, a WhatsApp conversation on 15 August 2017 (a few days after the execution of the SFA) showed that Julius continued to labour under the impression that there was only one FCL and that it was FCA-registered. In discussing with Morgan a potential bitcoin deal, Julius had suggested using FCL as it was “fca registered” and he asked Morgan for its “fca registration [number]”. Morgan did not query him about what “fca registered” meant. Instead, he replied, “No it [won’t] be that entity contracting[,] it is a related entity.” Raymond agreed that what Morgan meant here was that the proposed entity would not be the FCL that was FCA-registered but that it would be a related entity. This conversation also supports that Morgan had informed Julius previously, when discussing the Loan Transaction, that FCL was FCA-regulated or registered; there is no other way in which the topic of “fca regulated” pertaining to “FCL” would have been known to Julius.
[75] DKI’s case is also that the Identity Representation was made through the FCL Website. Ricky attested that after Julius informed him that FCL maintained a website with the domain name fullertoncapital.com, he visited the FCL Website before the SFA was executed (see [8] above). I accept Ricky had checked the FCL Website, even if he could not (in cross-examination) recall when he did so.
[76] Whilst Julius denied that Morgan had informed him of an FCL website, that he had directed Ricky to such a website, or that he had looked up that website in 2017, I prefer Ricky’s testimony that Julius did inform him of such a website in 2017 during their discussions. In court, Morgan testified that he had either given Julius the email address or the website for FCL, or that Julius had independently looked up FCL’s website and then asked Morgan whether it was the correct one whereupon Morgan had confirmed the website. He said that Julius had “looked online” for FCL before reverting to Morgan with whether that entity could be used for the proposed loan transaction. Morgan also explained that he had been instructed by Raymond to direct potential borrowers to the FCL Website if they required more information about FCL. That said, even if Julius never informed Ricky of an FCL website, which I do not accept, I nevertheless find that Ricky did check the FCL Website prior to DKI signing the SFA. More likely than not, given the size of the intended loan and the collateral to be used for it, Ricky would have made some other checks on FCL.
[77] Additionally, although Ricky produced a 2018 screenshot of the FCL Website (as it was only in 2019 that DKI discovered the falsity of the Identity Representation), I find the website was in existence in 2016 as testified by Morgan. Jay Dombroski (“Jay”), engaged by Raymond as Director of Marketing for FCL at the material time, stated that he designed the FCL Website in 2016 on Raymond’s instructions, following from an internal contest to design FCL’s logo at that time. Jay attested that Raymond had directed the FCL Website should state that FCL was a company authorised and regulated by the FCA UK and with its registered address reflected in the UK.
[78] Thus, I disbelieve Raymond that the FCL Website was only set up in 2018. Importantly, there was always only one FCL Website, although there were various FCL entities. Clearly, what was represented on the FCL Website would be attributable to Raymond, who owned and controlled all the FCL entities, and who determined and approved the content of the website.
[79] Here, I address Raymond’s argument that DKI could not have been mistaken as to FCL’s identity as it knew FCL was an “offshore” entity. First, on 15 February 2017, Morgan had informed Julius that “We are offshore … We are not a registered or licensed entity”. Second, cl 10(p) of the SFA states that DKI “acknowledges the fact that the Lender is an offshore entity”. Thus Raymond alleged that “offshore” meant offshore from the UK and DKI would have understood that FCL was not FCL(UK). I find Raymond’s argument to be disingenuous.
[80] In court, Raymond admitted that Morgan’s email (at [79] above) pertained to Julius’s query regarding Qilin. In that email, Morgan stated that “We set up Qilin almost three years ago” and that it (Qilin) was an offshore entity that was not registered or licensed. Strangely, Raymond disputed the authenticity of the 15 February 2017 email chain which he relied on.
[81] Second, “offshore” does not necessarily mean offshore from the UK. Clause 10(p) of the SFA states: “The Borrower acknowledges that the Lender is not based in Canada nor is it registered as a financial entity in Canada. The Borrower acknowledges the fact that the Lender is an offshore entity.” [emphasis added]. In that context, the Lender being “offshore” would have been understood to mean offshore from Canada. Raymond admitted in court that many jurisdictions other than BVI can be considered offshore.
[82] Importantly, it is undisputed that none of the documents, including the 3/8/17 Term Sheet, SFA and Custody Agreement, or even communications between Ricky/DKI and Julius prior to the execution of the SFA, mentioned the intended transacting entity as a “BVI” entity. Raymond stated that the mention of the BVI entity of FCL and the decision to use FCL(BVI) for the Loan Transaction was made only on 8 August 2017. Morgan attested, in his AEIC, that the fact that FCL(BVI) would become the transacting party in the SFA was not disclosed to DKI (see [73] above). Julius likewise attested that, even after the SFA had been signed, he laboured under the impression that the SFA was signed by an FCL that was FCA UK-registered. Morgan agreed this was the case. Raymond likewise admitted that he never informed Julius there was more than one FCL entity or that there was a BVI entity of FCL, and that Julius would not have known these facts or that there was more than one FCL.
[83] It is undisputed that the Identity Representation was false. The FCL that signed the SFA was a BVI entity and it was not regulated or licensed (let alone regulated by FCA UK).
Whether DKI relied on the Identity Representation and suffered loss
[84] Reliance can be established as long as the misrepresentation plays a real and substantial part in inducing a claimant to act, no matter how strong or how many other factors there are. The representation must have a real and substantial effect on the representee’s mind such that it can be said to be an inducing cause which led him to act as he did; it need not be the inducing cause (Alwie Handoyo at [187]–[188]).
[85] I find the Identity Representation played a real and substantial effect on DKI’s mind and was an inducing cause for DKI to enter into the SFA. First, DKI was concerned that the loan financing transaction should be made with a “more proper” or regulated entity, and both Julius and Morgan knew this (see [69]–[72] above). On Julius’s account, once he informed Ricky that FCL was FCA-regulated, DKI was content to proceed. Julius agreed that when he informed Ricky that FCL was regulated by the FCA UK, it was important to Ricky and allayed some of his worries. Ricky also testified that FCL(UK) “would be the type of company that [he] will be happy to do business with”.
[86] Raymond argues that DKI could not have relied on the Identity Representation as Ricky had done his own due diligence prior to DKI executing the SFA, such as by checking the FCL Website and the contents of the SFA. However, it is undisputed that the loan and other documents did not mention FCL as being a “BVI” entity (see [82] above). I have also rejected Raymond’s assertion that “offshore” in the SFA must necessarily mean a BVI jurisdiction.
[87] Raymond also points to the FCL Website which stated that FCL “is an Appointed Representative of [MET] … which is Authorised and Regulated by the Financial Conduct Authority”. It was MET, and not FCL, that was regulated by FCA UK – thus DKI could not have relied on the FCL Website for the Identity Representation. This argument does not assist Raymond. Ricky, being in the securities industry, understood that a representative entity would also be regulated by the regulating authority (FCA UK) in relation to its activities, and that the principal would be responsible for the appointed representative’s activities including ensuring the representative complies with any regulations or codes of conduct. Morgan also confirmed his understanding was that FCL(UK) would “piggyback” off MET’s registration with the FCA UK. A reasonable person would have understood the statement on the FCL Website to convey that MET’s regulated status extended to its appointed representative (ie, the FCL based in the UK), as understood by both Morgan and Ricky. Importantly, the FCL Website represented FCL’s address to be in the UK, thus giving Ricky the impression that FCL was a UK-incorporated entity.
[88] In any event, that Ricky had checked the FCL Website or FCA website did not mean that he could not have also relied on the Identity Representation. A representee who also takes steps to verify a representation does not thereby cease to rely on it, and a party who acts carefully but fails to discover the fraud should not be penalised. Also, a person who has made a false representation cannot escape its consequences just because the innocent party has done its own due diligence unless the innocent party has come to learn of the misrepresentation before, or does not rely on it when, entering into the contract (Jurong Town Corp v Wishing Star Ltd [2005] 3 SLR(R) 283 at [113]–[114]).
[89] I am thus satisfied that DKI relied on the Identity Representation when entering the SFA, and subsequently suffered loss when it released the Shares to FCL (which turned out to be FCL(BVI)) and proceeded to service the interest payments. FCL(BVI) did not have independent funds to discharge the Loan Amount to DKI and subsequently disbursed the balance of the Sale Proceeds to Raymond and his entities (see [18] and [47] above). It is clear that FCL(BVI) would not have had the means to return the value of the Shares (whether in stock or cash equivalent) if the loan were repaid by DKI.
Knowledge that the Identity Representation was false
[90] Preliminarily, it cannot be disputed that, prior to the execution of the SFA, Julius did not know the Identity Representation was false (see [74] above). Nor could it be said that he made that representation in the absence of any genuine belief that it was true. Julius merely conveyed to Ricky what Morgan had informed him (about FCL being FCA-regulated and of FCL’s website).
[91] However, Morgan knew the Identity Representation was false when he informed Julius that FCL was FCA-regulated. He knew of only three entities for the stock loan business, ie, Qilin, Carrington and FCL(BVI), and he always viewed the lending entity to DKI as only FCL(BVI) but did not inform DKI that it was not so. He also knew by January 2016 of the existence of FCL(UK), and by 8 August 2017 that the Identity Representation was false when Raymond informed him and Sally to “use Fullerton BVI” for the Loan Transaction (see [51] above). Raymond admitted the first time FCL(BVI) was expressly mentioned as the entity for the Loan Transaction was on that date. Despite all these, the fact that FCL(BVI) would be the lending entity was not conveyed to Julius or Ricky by Morgan (or Raymond) before the SFA was signed.
[92] I find Morgan had conveyed the Identity Representation to Julius on Raymond’s authority and instruction. Raymond was the controlling mind and will of all the FCL entities and he controlled the Loan Transaction. Raymond’s knowledge and acts are thus to be attributed to FCL(BVI). Indeed, I find that Raymond had deliberately sought to conceal from DKI the identity of the entity he intended to use for the Loan Transaction despite knowing that Morgan had conveyed the Identity Representation to Julius.
[93] Hence, I find that the Identity Representation was made with Raymond’s knowledge that FCL(BVI) was not a UK entity that was FCA-regulated. Raymond admitted in court that the BVI entity was never mentioned to Julius/Ricky prior to execution of the SFA. There is no evidence that it was conveyed to DKI even after the SFA was executed. Indeed, Raymond not only knew that DKI had been informed that the proposed lending entity FCL was FCA-regulated, but that he actively maintained this charade through various mediums, each calculated to convey to DKI and to the world at large that the FCL they were dealing with was a UK-incorporated and FCA-regulated entity.
[94] First, Raymond created a web of identically-named entities. There were five “FCL” entities, incorporated respectively in the UK, Hong Kong (two), the Cayman Islands and the BVI. He was also the controlling mind and will of each. Pertinently, in August 2017, when the Loan Transaction was being negotiated, there were four entities named “FCL” (ie, in the BVI, Cayman Islands, Hong Kong and UK).
[95] Second, despite knowing there were multiple “FCLs” Raymond directed the creation of a singular FCL Website which stated FCL’s address as being in the UK and described it as an appointed representative of MET which was authorised and regulated by the FCA UK. There was no separate website for FCL(BVI) that would have alerted Ricky/DKI that there was more than one “FCL” at the time the Identity Representation was made.
[96] Third, all the FCL entities shared one email domain, ie, “@fullertoncapital.com” (“Email Domain”). Raymond directed the creation of a disclaimer for emails sent from the Email Domain stating that “Fullerton Capital Ltd. is Authorised and Regulated by the Financial Conduct Authority” (“Disclaimer”). Jay’s unchallenged evidence, corroborated by the contemporaneous emails in 2016, was that the Disclaimer was inserted in 2016 at Raymond’s instruction. Raymond admitted that even after the SFA was signed, Julius was copied on emails between Morgan and Ricky which contained the Disclaimer. Pertinently, on 11 December 2017 and 8 January 2018, Morgan’s emails to Ricky pertaining to the SFA contained the Disclaimer. Raymond accepted that he approved the Disclaimer at that time. I disbelieve his explanation in court that the Disclaimer was a mistake and should have applied only to FCL(UK), as the Disclaimer referred to FCL(UK). He created only one Email Domain for “FCL” despite owning and controlling various FCL entities concurrently. Rather, I find it was a deliberate design to represent to recipients of emails from the Email Domain that the FCL they were dealing with was an entity in the UK regulated by the FCA UK.
[97] Taken together, the evidence shows Raymond deliberately maintained the FCL Website, logo and Disclaimer through the shared name, “FCL”. This was a presentation calculated to convey that the transacting entity was UK-incorporated and FCA-regulated, although he knew FCL(BVI) was neither. Raymond’s knowledge and acts are attributable to FCL(BVI). He was its directing mind and controller. Also, FCL(BVI) was Raymond’s alter ego. The Identity Representation was accordingly made fraudulently by the defendants.
Conclusion on the Identity Representation
[98] I am thus satisfied that DKI’s claim against the defendants on fraudulent misrepresentation pertaining to the Identity Representation is made out.
The Financing Representation
[99] Essentially the Financing Representation is that the loan would be funded on a DVP basis, which necessarily meant that the lender would have its own independent resources, and would not sell the Shares, to raise the Loan Amount to be disbursed to DKI (see [12] above). It is not disputed that FCL(BVI) sold the Shares to raise and disburse the Loan Amount to DKI.
Whether the Financing Representation was made to DKI
[100] I find the defendants conveyed the Financing Representation to DKI. Essentially, the Financing Representation was conveyed by Morgan to Julius who then conveyed it to Ricky, that the loan would be funded on a DVP basis.
[101] First, I accept Ricky’s testimony that he informed Julius it was important to DKI that the loan be funded on a DVP basis, and that Julius confirmed this (see [12] above). This is supported by Julius, who testified that Ricky informed him the Loan Transaction was to be on a DVP basis and he understood this was an important part of the transaction. Julius understood the meaning of DVP in the context of a stock secured loan transaction, ie, that there would be a simultaneous exchange of the collateral/shares for the loan moneys, and that the lender would have “independent finance” to fulfil the loan transaction. He further testified that if the collateral was transferred to the lender before the lender disbursed the loan moneys to the borrower, this would not be DVP.
[102] Second, I accept that, before the SFA was signed, Julius conveyed to Morgan that DKI wanted the Loan Transaction on a DVP basis. That Morgan and Julius were discussing a potential loan transaction with DKI on a DVP basis (using DKI’s TSG shares as collateral) is borne out by a WhatsApp conversation on 2 August 2017, where Julius asked Morgan whether he would be selling all the shares “right after [the] loan”. The understanding between Morgan and Julius pertaining to the Loan Transaction being on a DVP basis was consistent even after the SFA was executed. This can be seen from Julius’s message on 21 August 2017 asking Morgan “so when dvp”, to which Morgan replied “Waiting for uob to call me back” and “Depends on when stock arrives”, and other messages between them.
[103] Morgan knew what DVP meant. In an email to Julius on 16 February 2017 (in response to Julius intimating his desire to join Qilin as an arranger), Morgan stated that all Qilin’s deals are “funded on a DVP basis, so there is no trading until after the loan is funded. However, after we have funded the loan and the shares cross to our account, we do trade the position.” [emphasis added]. In evidence, Morgan confirmed that DVP meant the transfer of shares to the lender and the disbursement of loan to the borrower would happen almost simultaneously. Not only did Morgan inform Julius that Qilin’s transactions were on a DVP basis, he also informed Julius that Raymond’s entities (which would include FCL) offered non-recourse loans on a DVP basis.
[104] Next, the Financing Representation was also made through the 3/8/17 Term Sheet and the draft SFA (see [13] above). Even if the 3/8/17 Term Sheet did not expressly state the transaction was to be on a “DVP” basis or through simultaneous exchange of the collateral for the loan, the draft SFA and signed SFA (at cl 2(f)) expressly stated that the lender would release funds into the borrower’s account and the borrower would release the collateral (shares) to the lender “through a simultaneous exchange to occur on an agreed-upon date”. [emphasis added]. The representation conveyed in the SFA would have been conveyed by Raymond. I have found that Raymond directed that FCL(BVI) be used as the lender, approved each iteration of the draft SFA, and executed it on FCL(BVI)’s behalf (see [50]–[52] above).
[105] Notably, Raymond’s own expert, Mr Andrew Spink KC (“Mr Spink KC”), accepted the “simultaneous exchange” mechanism under cl 2(f) presupposes the lender has funds available in advance to effect a simultaneous exchange of the loan moneys for the Shares. Mr Spink KC further agreed that if the lender had to first sell the borrower’s shares to raise the funds, that exchange would not be simultaneous by definition. The fact that the Loan Amount was eventually not exchanged simultaneously for the Shares does not detract from the Financing Representation having been made before the SFA was signed. Raymond’s other expert, Mr Simon Jaquiss (“Mr Jaquiss”), also conceded there was nothing in the SFA which suggested that the lender would rely on the collateral to fund the loan.
[106] I pause to deal with Raymond’s professed understanding of DVP. In his AEIC, Raymond asserted the “simultaneous exchange” under the SFA involved a simultaneous exchange between an institutional buyer’s funds and the Shares, with either FCL(BVI) or UOBKH acting as an intermediary facilitating this exchange. Raymond’s story is completely unbelievable. First, his assertion runs contrary to cl 2(f) of the SFA which stipulates a simultaneous exchange between the “lender” (FCL(BVI)) and “borrower” (DKI). No third party such as an eventual institutional buyer of the Shares is mentioned although the SFA was drafted by FCL. Second, his assertion also runs contrary to his own experts’ testimony on the “simultaneous exchange” mechanism under the SFA (see [105] above). Third, he admitted that the portion in his AEIC dealing with “simultaneous exchange” was an afterthought, he came up with it after discussing with friends the meaning of “simultaneous exchange” in 2024 or 2025, it was drafted by someone else, he did not understand its content and he merely signed the AEIC. In fact, he claimed he only read the SFA, Custody Agreement and Control Agreement after Suit 435 was commenced (which I disbelieve).
[107] Eventually, Raymond conceded that when he signed the SFA, he knew (pursuant to the SFA) that the Loan Amount was to be disbursed to DKI at the same time as the delivery of the Shares into the FCL(BVI) A/c. He knew simultaneous exchange did not in fact take place, as the Shares were transferred into the FCL(BVI) A/c on 30 August 2017, but the first tranche of the Loan Amount was not disbursed until 8 September 2017.
[108] Next, Raymond claimed the SFA is not a security arrangement but a title transfer collateral arrangement. On that footing, full title in the Shares passed to FCL(BVI), which was entitled to sell the Shares and that cl 4(b) of the SFA merely entitled DKI to the cash value of the Shares upon repayment of the loan. But this completely misses the point. The Financing Representation is not that FCL(BVI) could deal with the Shares after they were transferred to it. It is a representation that FCL(BVI) had funds of its own with which to disburse the loan at the time the Shares were to be delivered to FCL(BVI), ie, “simultaneous exchange” under cl 2(f). This is regardless of whether the SFA is characterised as a title transfer arrangement or otherwise. Clause 4(b) deals with redelivery of the collateral (or its equivalent in cash) to DKI when DKI makes a repayment of the loan. In any event, the Financing Representation was not confined to the transaction documents. I have found that it was also conveyed orally, through Morgan to Julius and from Julius to Ricky.
Whether DKI relied on the Financing Representation and suffered loss
[109] I find DKI relied on the Financing Representation in entering the SFA. The Financing Representation was closely tied to the Identity Representation. As Ricky attested, DKI was seeking financing using the Shares as collateral, and it intended to redeem them eventually. DKI’s conduct showed it intended to transact with an entity that had the financial means to disburse the loan. It was looking for a lender that was “proper” and had initially approached banks and financial institutions (see [6] above). It does not make sense for DKI to have parted with 7.2m Shares worth around CAD 130m to a lender which had no funds of its own to disburse the Loan Amount (of over CAD 100m).
[110] Raymond claimed the issue of “simultaneous exchange” is moot as Tang Hao had, on 30 August 2017, instructed UOBKH to transfer the Shares into the FCL(BVI) A/c with “immediate value” without waiting for any discussion on an “agreed date” for the simultaneous exchange pursuant to cl 2(f) of the SFA. In other words, DKI did not rely on the Financing Representation. Alternatively, it had waived its right under the SFA to a “simultaneous exchange”. I reject both of Raymond’s arguments.
[111] The Shares were transferred by DKI into the DKI A/c on 24 August 2017. Ms Seah (“Seah”) of UOBKH attested that on 30 August 2017, she called Tang Hao to verify that he had signed the Custody Agreement and STI. In that call, Seah asked Tang Hao whether he wanted UOBKH to “transfer for value? Immediate value?” and Tang Hao replied, “Uh yeah”. Whilst DKI pleads that Seah did not speak to Tang Hao but to his assistant who was not authorised to make decisions on DKI’s behalf, I accept Seah’s testimony that she had spoken to Tang Hao. It is undisputed that the call was made to Tang Hao’s number and Tang Hao has not come to testify otherwise.
[112] The fact that Tang Hao had, after execution of the SFA, confirmed with UOBKH the transfer for “immediate value” on 30 August 2017, did not negate DKI’s reliance on the Representations in entering the SFA. There is also no evidence that DKI intended to “waive” the simultaneous exchange of the Shares for the Loan Amount, or that DKI was aware at the material time, that the Shares would be sold to raise the Loan Amount to disburse to DKI. Importantly, once the Shares were in the DKI A/c, FCL(BVI) had control of the Shares including when to transfer them to the FCL(BVI) A/c (see [3] above and [213] below).
[113] The exchanges between Julius and Morgan show DKI was always expecting DVP or a simultaneous exchange; this was even before UOBKH’s phone call with Tang Hao on 30 August 2017. For instance, on 16 August 2017, Julius asked Morgan whether DVP could be done on weekends. On 18 August 2017, Julius informed Morgan that FCL needed to “prep the funding on one tranche” meaning that there should be DVP. On 25 and 29 August 2017, Julius continued to remind Morgan about “DVP”. Pertinently on 29 August 2017, Julius chased Morgan in a series of messages, to “keep track of the dvp and help to resolve if shit happens”, to “get the swift confirmation to me after the trade”, and warning that the “Client will stop the transaction if it fails again”. It should be noted that by this time, FCL had issued the 1st Closing Statement to DKI (on 24 August 2017) for the first tranche of 3.6m of the Shares.
[114] Then, on 30 August 2017, Julius asked Morgan to provide a closing statement for the entire 7.2m Shares at better pricing terms. Morgan sent Julius the 2nd Closing Statement for the second tranche of 3.6m Shares, and Julius then asked Morgan why he did not give a closing statement for the entire 7.2m Shares. Julius also forwarded the 2nd Closing Statement to DKI. Notably, Julius attested that as DKI did not receive any notification of incoming funds by 10pm on 30 August 2017 (after DKI received the 1st and 2nd Closing Statements), Ricky informed him that DKI would not wait any longer for FCL to fulfil its obligations under the SFA and would switch to a new lender if disbursement of the loan did not take place that night. Julius’s account is supported by his message at 10.49pm that night to Morgan to convey the same. This was the same day of Seah’s call to Tang Hao. Pertinently at 11.43pm that night, Julius said to Morgan “Guess dvp failed again”. Even after Seah’s phone call with Tang Hao, Ricky continued to chase Julius, as can be seen from Julius’s messages to Morgan on Friday, 1 September 2017 stating, “Huh cash not in? … client just blasted at me again …”. DKI’s frustration at the situation even on Monday, 4 September 2017 was supported by Julius’s message to Morgan on the same date to say, “Client is furious!!”.
[115] As Raymond admitted in court, during this period, DKI had every right to ask what was happening to the Loan Amount that was yet to be disbursed.
[116] I am thus satisfied that DKI relied on the Financing Representation when entering the SFA and subsequently suffered loss. I reiterate [89] above.
Knowledge that the Financing Representation was false
[117] Raymond admitted that neither he nor FCL(BVI) had CAD 110m to fund the Loan Amount and he had sold the Shares to disburse the loan. The Financing Representation was thus made fraudulently by the defendants.
Conclusion on the Financing Representation
[118] In conclusion, I find DKI has made out its claim for fraudulent misrepresentation against the defendants pertaining to the Financing Representation. As such, it is unnecessary to deal with its claim under s 2 of the Misrepresentation Act (being a claim pleaded only against FCL(BVI)).
Termination of SFA and repudiatory breach
[119] I turn to the termination of the SFA. Raymond claims that DKI breached the SFA as it: (a) made late payment of interest due on 29 September 2017 (“1st Breach”) and due on 1 December 2017 (“2nd Breach”); (b) used the Loan Amount to purchase shares in TSG, in breach of cl 5(f) of the SFA (“3rd Breach”); and (c) failed to pay interest due on 1 March 2019 (“4th Breach”), which led FCL(BVI) to terminate the SFA. DKI claims, however, that FCL(BVI) committed the following repudiatory breaches, ie, it funded the Loan Amount out of the Sale Proceeds and wrongfully purported to terminate the SFA on 14 March 2019 on the basis of the 4th Breach.
1st Breach
[120] There was no 1st Breach as DKI made payment on 29 September 2017, as supported by the documentary evidence and accepted by Raymond in court.
2nd Breach
[121] The second interest payment was due on 1 December 2017. DKI made payment on 7 December 2017 after FCL sent a default notice to DKI (“7/12/17 Default Notice”). However, I find FCL(BVI) had waived that breach. It did not terminate the SFA, despite its 7/12/17 Default Notice stating that “we as the Lender have the right to terminate the Loan Agreement pursuant to [cl 4(a) of the SFA]”. Instead, it continued to accept the 7 December 2017 interest payment and four other interest payments between 1 March and 1 December 2018.
[122] Further, Morgan and Raymond informed Ricky/DKI that FCL continued to treat the SFA as being alive. Morgan’s evidence, maintained at trial, was that Raymond instructed him to waive the 2nd Breach on FCL(BVI)’s behalf, and he thus conveyed the waiver to Ricky in early 2018. Ricky’s evidence corroborates this. Morgan’s account is also corroborated by a subsequent WhatsApp exchange with Raymond in August 2019 where he informed Raymond the waiver was “only verbal to [Ricky]”. I further accept Ricky’s testimony that in January 2018, Raymond had told him that FCL would not treat the late interest payment as a breach of the SFA. DKI’s action in making four subsequent interest payments in 2018 only makes sense if Ricky had been told by Raymond and Morgan that the SFA continued to be alive.
[123] Raymond argues that cl 10(e) of the SFA required any waiver to be in writing, and that no written waiver was given. However, a prohibition of an oral waiver may itself be waived, as parties to the contract can vary the contract orally notwithstanding their earlier agreement to the contrary (Charles Lim Teng Siang v Hong Choon Hau [2021] 2 SLR 153 at [44]–[45]). On the evidence above, FCL(BVI) had varied its own right under cl 10(e), by Raymond orally waiving the late payment (on its behalf), and which was conveyed by him and Morgan to Ricky.
3rd Breach

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Discovery Key Investments Ltd v Fullerton Capital Ltd and another (Yeo Wee Guan and others, third parties)

Laws this judgment relies on

Grounds of decision

Parties and background

Claimant’s case

Identity Representation

Financing Representation

Execution of the SFA and discovery of FCL’s identity

Termination of SFA and commencement of Suit 435

FCL(BVI)’s change of name and dissolution

FCL(BVI)’s pleaded case

Raymond’s version of events

Issues to be determined

Whether FCL(BVI)’s corporate veil should be pierced

Raymond wholly owned, controlled and managed FCL (BVI)

Raymond drew no distinctions between his assets and those of FCL(BVI)

Raymond controlled the Loan Transaction

Whether Julius and Morgan were authorised by the defendants to make representations to DKI

The Identity Representation

Whether the Identity Representation was made to DKI

Whether DKI relied on the Identity Representation and suffered loss

Knowledge that the Identity Representation was false

Conclusion on the Identity Representation

The Financing Representation

Whether the Financing Representation was made to DKI

Whether DKI relied on the Financing Representation and suffered loss

Knowledge that the Financing Representation was false

Conclusion on the Financing Representation

Termination of SFA and repudiatory breach

1st Breach

2nd Breach

3rd Breach