The ARTICLE

Pub Date: 09/02/2007   Pub: BT              Page: 1
Headline: Former NKF directors give up fight, concede to judgment
By: Michelle Quah
Corporation: National Kidney Foundation, NKF
[SINGAPORE] Former board members of the National Kidney Foundation (NKF) have
thrown in the towel - admitting they breached their duties as directors - and
have now opened themselves up to millions of dollars of claims filed against
them by NKF's new board.
  After months of battle, a few days on the stand was all it took to persuade
former NKF chairman Richard Yong and his fellow defendants in a civil suit -
former NKF treasurer Loo Say San and former NKF board member Matilda Chua - to
give up their fight just as former NKF chief T T Durai did a month ago.
  All four had been sued by the new NKF board, headed by chairman Gerard Ee,
for $12 million damages - for improperly paid salaries and contract fees and
loss of donations, among other things. How much each defendant will have to pay
will be assessed at a damages hearing later.
  Until then, yesterday's admission by Mr Yong, Mr Loo and Ms Chua is the
closest thing to victory for the new NKF board, which filed its suit in April.
  In a statement to the media, Mr Ee said NKF had to pursue the civil suit to
safeguard its reputation and integrity.
  'We are very pleased at this outcome and, in particular, at the speed with
which this has been achieved,' he said. 'The outcome helps vindicate the sense
of justice among Singaporeans.'
  The defendants' admissions yesterday came mid-way through what was expected
to be a two-month hearing in the High Court. Asked what prompted their move,
their lawyers declined to comment.
  But the new NKF board's representative, Senior Counsel K Shanmugam, said Mr
Yong's admissions on the stand in the past few days proved a turning point in
the case.
  Among other things, Mr Yong admitted he lied and breached his fiduciary duty
as a director.
  Mr Shanmugam said: 'I felt that, after two days of cross-examination, the
admissions by Mr Yong were quite damaging - and I could see at that point that
it would have been sensible for the defendants to have ended this hearing. That
admission of his breach of fiduciary duty was fatal.'
  Mr Shanmugam told reporters that following Monday's court session when Mr
Yong admitted breach of duty, he decided to call Mr Yong's lawyer Peter Low.
  'I felt I could make the point to him that there was no sense in continuing
this case,' Mr Shanmugam said. 'They thought about it, and consented.'
  Mr Shanmugam said that soon after, Ms Chua's lawyer Cheah Kok Lim got in
touch and expressed his view that Ms Chua should consent to judgment.
  Mr Yong, Mr Loo and Ms Chua's climb-down echoes that by Mr Durai last month.
  NKF's former chief executive seemed prepared to defend claims against him,
but abruptly threw in the towel just two days after the hearing began -
immediately after Mr Shanmugam concluded his opening statement to the court.
  Now that all four defendants have consented to judgment, the amount each
will have to pay will be assessed at a separate hearing to be held within 12
months or so. They will each be assessed differently, based on their levels of
liability.
  'I can confirm at this point that Mr Yong faces more liability than Mr Durai
- he will bear the brunt of the claims,' Mr Shanmugam said. Mr Loo and Ms Chua
face a lower-level liability than Mr Yong or Mr Durai, he added.
  Mr Yong and Mr Loo will now continue to pursue their own claims against five
third parties. They earlier dragged four other former NKF directors and Mr
Durai into the civil suit, arguing that all directors were equally liable.
  Mr Yong and Mr Loo's other lawyer, Chia Boon Teck, told reporters yesterday
that even though his clients have settled their case with the new NKF board,
they will continue their claims against 'at least one of the third parties'. He
declined to say which party, but the indications are that Mr Yong and Mr Loo
will proceed against Alwyn Lim, who they named extensively in their defence.
  Lawyers for the third parties said yesterday they feel confident about their
respective cases - even more so after the defendants' consent to judgment
yesterday.
  The various parties will meet in Judicial Commissioner Sundaresh Menon's
chambers at 4pm today to discuss how to proceed with the third-party claims.