Ahhh, so subliminally sensitive - we really must try to avoid having the party's name associated with such nasty-sounding matters, mustn't we. PAP Members of Parliament have an image of uprightness, integrity and honesty to uphold. The less Teh Cheang Wan, Phey Wee Kok, Choo Wee Khiang and Wee Toon Boon are remembered, the better.
Anyway, Lew's case is still in progress. Let's wait & see what happens.
May 16, 2006
Ex-MP Lew pleads not guilty in Broadway case
He and exec chairman on trial for breaching Companies Act
FORMER Member of Parliament Lew Syn Pau and businessman Wong Sheung Sze yesterday pleaded not guilty to accusations of a $4.2 million share scam involving mainboard-listed Broadway Industrial Group and an Indonesian businessman.
Lew, 52, an MP from 1988 to 2001, and Broadway executive chairman Wong, 56, were facing their first day of trial in the High Court after being charged under the Companies Act in October.
It is alleged that they had lent money belonging to a subsidiary of Broadway to a third party - privately held Silver Touch - to buy Broadway's shares.
A former director of Silver Touch, Indonesian businessman Dick Tan Beng Phiau, was one two prosecution witnesses to give evidence yesterday.
The court heard that Lew and Wong extended a loan of $4.2 million to Mr Tan's Silver Touch in February 2004.
The money belonged to Mauritius-based Compart Asia Pacific, a subsidiary of Broadway. At the time Lew was one of its directors.
Silver Touch then used the money to buy 20 million Broadway shares during a share placement exercise in the same year.
Deputy Public Prosecutor Ng Cheng Thiam told the court that the share placement was part of a financial restructuring exercise undertaken by Broadway to improve its weak balance sheet. The group was prospecting for new investors to inject fresh capital.
Broadway, which makes foam-moulded products, was also planning to restructure its debt by seeking new credit facilities from United Overseas Bank, the court heard.
To achieve its objective, Broadway had appointed several advisers, including Lew, who ran his own business consultancy firm, Capital Connections. He was asked to seek out potential investors, and subsequently found Mr Tan.
Court documents disclosed it was through Lew that the 'two-week loan' of $4.2 million was extended to Mr Tan.
It was also disclosed that Compart (Mauritius) had deposited the money in Lew's DBS bank account on Feb 13, 2004. But only $4 million was transferred on the same day to Mr Tan, via his wife's bank account.
No mention was made in court documents of the remaining $200,000 of the loan.
Mr Tan, who took the witness stand yesterday, confirmed he was introduced to Broadway by Lew.
He also told the court that he even paid $160,000, in two batches, to Lew as interest payment for the loan that was provided to him by Lew to facilitate the purchase of Broadway's shares.
But Senior Counsel K. Shanmugam, who is representing Wong, argued that the prosecution's case was a 'non-starter', given that Compart (Mauritius) is a foreign entity that does not fall under the ambit of the local laws.
He added that Compart (Mauritius) is a separate legal entity from Broadway with its own independent board of directors.
Section 76 of the Companies Act states that a company may not give financial assistance to any person for the purpose of buying shares in the company or its holding company.
The charge carries a fine of up to $20,000, a jail term of up to three years, or both.
The hearing continues today.