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Jane Moir

A Fortuna International director has had the tables turned in a $30 million damages trial when he was accused of hoodwinking a shareholder into selling a stake on the eve of a major placement.

 The judge, Mr Justice William Stone, shunned Fortuna vice-chairman David Chan Chuen-wing's claims, siding instead with defendants Tomei International (Holdings) and Quick Motion, who accused Mr Chan of fraud.

 Mr Chan used 'an embroidery of half-truths' the judge said, to try to convince the court that he was the victim in the botched share deal.

 Mr Chan claimed he wanted to buy the defendants' stake in Fortuna - formerly known as Firstone International Holdings - to arm himself in a power struggle with chairman Kwee Cahyadi Kumala.

 However, the judge found that it was less of a coincidence than 'an instance of extraordinary [and highly providential] good fortune' that Firstone was on the brink of making a share placement to Guangnan Holdings.

 Mr Chan had offered to buy 18.29 million shares and 28.21 million rights shares in Firstone at the price of 60 cents and 30 cents respectively on July 11, 1997 - a Friday.

 Tomei's executive director, Alex Wong, received approval for the deal and intended to reply to Mr Chan the following day.

 However, he received an abrupt phone call from Mr Chan at 5pm, prompting him to ask if there was any special event happening at Firstone. Mr Chan said there was not.

 The following Monday, shares in Firstone were suspended. Firstone was to make a placement to Guangnan.

 As far as Tomei, now called Toyo Holdings, and Quick Motion were concerned, the deal with Mr Chan was instantly nullified.

 Moreover, Mr Wong said he pointed out to Mr Chan that 'he and I would be in trouble and that the SFC would start some kind of insider-dealing investigation'.

 'The case put forward by the defendants is, at bottom, one of fraud,' Mr Justice Stone said.

 The Guangnan announcement boosted Firstone's share price, and the defendants sold part of their stake on the market - until Mr Chan obtained an injunction and filed a lawsuit claiming $30 million in damages.

 But his claim backfired yesterday when Mr Justice Stone threw out his case, and ordered that he pay the defendant's legal costs.

 In his ruling, he said: 'I regarded Mr Chan as an unimpressive witness, frequently appearing non-responsive to specific questions, and often demonstrating a lack of recollection of matters he might reasonably have been thought to have had at his fingertips had events occurred as he maintained.

 'I formed the impression, I hope not unfairly, that his evidence was an embroidery of half-truths.' COURTS 



Judge puts dent in Fortuna exec's damages claim