Raffles Education chairman and CEO Chew Hua Seng has issued a statement to refute the claims that the Singapore Commercial Affairs Department (CAD) has a pending complaint against himself, his wife, Doris Chew, and his son, Chew Han Wei.
“I wish to clarify, for avoidance of all doubt, that there is no such investigation by the CAD against me or my wife or son, to my knowledge,” Chew said in a press release on September 1.
The claims against Chew and his family were made in a notice of requisition for an extraordinary general meeting (EGM) from Raffles Education’s shareholders on August 31.
The requisition included substantial shareholder Oei Hong Leong and Indian educational technology businessman Shantanu Prakash. Oei had previously attempted to call for an EGM seeking to remove Chew as chairman and CEO on August 17, but failed to do so.
See: Oei Hong Leong wants to oust Chew Hua Seng again and Oei Hong Leong calls for EGM at Raffles Education to oust chairman Chew Hua Seng
Together, Oei and Prakash collectively hold over 10% of the issued shares of Raffles Education.
According to Bloomberg data, Chew holds 33.58% of the company and Oei, 12.91%.
See also: Oei Hong Leong scoops up more shares in Raffles Education
The August 31 requisition has asked Raffles Education to appoint an independent special auditor to “review the circumstances” regarding the joint venture between the company and Educomp Solutions, which Prakash is a founder of.
The concerns included “irregularities” committed by the company’s directors pertaining to forgery, extortion, and allegations of corruption regarding Chew and his family’s membership rights of a not-for-profit organisation in India.
Chew added that he wished to “place on record” that Shantanu Prakash and his company, Educomp Solutions, “are the subject of investigations by the Serious Fraud Investigations Office (SFIO), the investigation agency for major corporate fraud in India, in relation to allegations of fund diversion and inflated land deals by M/s Educomp Solutions Ltd”.
India’s Central Bureau of Investigation has said to have registered a criminal case against Educomp Solutions and Prakash “for offences under the Indian Prevention of Corruption Act, as well as for criminal conspiracy, cheating, forgery, and criminal misconduct, for defrauding a consortium of banks of INR 1,955.36 crores (over $364 million)”, according to Chew.
Of the seven resolutions in the August 31 filing, Raffles Education noted that six were the same ones listed in the August 17 notice sent by Oei and his company Oei Hong Leong Art Museum Limited.
The repeated resolutions include the removal of Chew as chairman and CEO of Raffles Education, and to appoint an auditor to “review the circumstances” surrounding the handwritten agreement between Oei and Chew on Oct 16, 2017. The agreement stated that Chew agreed to procure a buyer for Oei’s shares in the company at a price of $0.44 cents per share, which represented a 45% premium over the then trading price, to be completed by Nov 15, 2017.
See: Raffles Education to sell 318.6 mil new shares to raise $44.6 mil to pare debt and strengthen working capital
On Sept 15, 2015, Raffles Education commenced arbitration proceedings against the India-listed Educomp Solutions in the Singapore International Arbitration Centre (SIAC).
The Arbitration Tribunal subsequently awarded Raffles Education damages of some 16.32 crores ($3.05 million) plus interest at 5.33% from Aug 19, 2015 until payment. Raffles Education has since commenced enforcement proceedings in India against Prakash to seek payment.
Chew ended his letter noting that it was "curious" for Oei to align himself with Prakash despite the legal suits between Raffles Education and Prakash’s Educomp Solutions.
Shares in Raffles Education closed 0.5 cent higher, or 4.5% up, at 11.5 cents on September 1.
