Businessman got ex-wife to sue him for millions so he has less assets in latest divorce

SINGAPORE — A businessman and his former wife came up with a sham with the intention of reducing the value of his assets as he was going through a divorce with his current wife, a High Court judge has found.

In August 2023, the former wife, Chiang Ai Ling, filed a $13.7 million lawsuit against Tan Kian Chye and his second wife, Ang Siew Yan.

Ang had filed for divorce from Tan in December 2022.

Chiang alleged that Tan had failed to pay her the sum in exchange for her transferring all her shares in his company to him.

She claimed that he had orally agreed in 2015 to pay her 25 per cent of the proceeds from the sale of his company.

Tan, who has a child with each woman, did not contest the lawsuit.

But Ang contended that the purported 2015 agreement was a sham conceived by Chiang and Tan to reduce the assets liable for division in the ongoing divorce.

In a written judgement issued on Dec 30, Justice Audrey Lim said the evidence showed that the purported agreement never existed and that the sham was conceived after Ang filed for divorce.

The judge dismissed Chiang's claim for the sum of $13.7 million or any amount pertaining to the shares that were held in her name.

Justice Lim also declared that the sham agreement did not affect the division of assets in the ongoing divorce.

Chiang and Tan married in February 1995. A year later, Tan set up a company called RYB Engineering.

Initially, Chiang held 25 per cent of the shares in the firm, and Tan held 75 per cent.

In early 2000, Tan began an affair with Ang. She joined RYB as a manager at the end of 2005.

In March 2006, Tan transferred most of his shares to her.

In December 2006, Chiang filed for divorce, which was finalised in October 2007. Tan and Ang married in May 2008.

Over the years, RYB's share capital was increased, and Tan was allotted additional shares.

By 2009, Chiang held 10 per cent of the shares, Tan had 66 per cent and Ang held 24 per cent.

In September 2015, both women transferred their shares to Tan.

Tan then sold RYB to Japan-based company Chudenko Corporation in two tranches.

He received $47.6 million on Oct 16, 2017, and $7.3 million on Nov 17, 2022.

Chiang claimed that in August 2015, Tan agreed to pay her 25 per cent of the proceeds from the sale of RYB in exchange for her transferring all her shares to him.

She alleged that the percentage was based on her shareholding in RYB.

Chiang and Tan claimed that at the time of the purported agreement, they both thought she held 25 per cent of the shares while he held the remaining 75 per cent.

Chiang said she chased Tan for payment, and filed the suit when he said he could not release the money because of the ongoing divorce.

But Ang contended that Chiang and Tan never made such an agreement in 2015.

She argued that Tan could not have agreed to pay his former wife 25 per cent of the proceeds because, by then, Chiang held only 10 per cent of the shares.

Both Chiang and Tan claimed they were unaware that Chiang's 25 per cent shareholding had been diluted to 10 per cent until the lawsuit was filed.

Justice Lim did not believe them. She said Tan was "dishonest" and that Chiang was clearly lying.

The judge also considered whether Chiang was the beneficial owner of the shares that were held in her name.

A beneficial owner is the person who ultimately owns and controls the shares in a company, even though the shares are registered under someone else's name.

The judge concluded that Chiang was never the beneficial owner of the shares. In other words, the shares did not belong to her.

Justice Lim said the evidence showed that all the shares in RYB have always been beneficially owned by Tan, even if some were held in Chiang's and Ang's names.

The judge said it was undisputed that Tan had built the business, and that the two women did not pay for the shares they held.

Tan also used RYB's funds for his personal purposes, such as paying maintenance to Chiang and their child while classifying such payments as "salary" in the books.

Then, after Tan received the sale proceeds, he used the money as he saw fit, such as gambling and buying properties for his children, the judge noted.

Justice Lim concluded that the purported agreement did not exist, based on her finding that Chiang did not own the shares in her name and that Tan knew in 2015 that Chiang's shareholding was no longer 25 per cent.

The judge said her conclusion was supported by the fact that Chiang never put on record the purported agreement, such as sending a simple reminder to Tan in a text message, even though she had numerous opportunities to do so.

Justice Lim also dismissed Ang's counterclaim against Tan and Chiang.

Ang had claimed that she was entitled to 24 per cent of the company, and that there was a conspiracy between Tan and Chiang to cause loss to her.

Justice Lim found that the story Ang gave in support of her claim was a "fabrication".

And while the judge accepted that Chiang and Tan had colluded to conceive the sham agreement, she said this did not result in any loss or damage to Ang.

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This article was first published in The Straits Times. Permission required for reproduction.