(Adds Goldman Sachs’ response in sixth paragraph.)
Jan. 10 (Bloomberg) -- A Goldman Sachs Group Inc. unit denied dumping a Singapore private wealth client’s shares it held as collateral and said it’s still owed money.
Quah Su Ling sued Goldman Sachs International in London, accusing it of breach of contract for selling her shares in Blumont Group Ltd., Asiasons Capital Ltd. and LionGold Corp. and depressing their prices. Goldman Sachs International countersued for $12.3 million it says it’s still owed.
Goldman Sachs International sold the shares in an “orderly and measured manner -- consistent with industry practice and accepted standards -- over the course of three weeks,” the bank said in court papers filed in London and made available this week. The lawsuit is Quah’s “attempt to delay or avoid repayment of debt.”
Shares of the three Singapore companies tumbled with Asiasons falling 62 percent on Oct. 4, while Blumont declined 56 percent and LionGold was down 42 percent. Over three days from Oct. 4, the declines erased $6.9 billion from Singapore’s bourse value. The Monetary Authority of Singapore and the city’s stock exchange said they would probe activities around the shares of the companies.
Quah, the Chief Executive Officer of IPCO International Ltd., claimed Goldman Sachs demanded she repay $48 million within 1 1/2 hours on Oct. 2 and started selling her shares. The bank hadn’t informed her previously of any shortfall in her margin loan or give her reasonable time to make payment, Quah said in court papers.
Edward Naylor, a Hong Kong-based spokesman for Goldman Sachs, declined to comment on the lawsuit. Quah didn’t respond to two e-mails or a call to her office.
Goldman Sachs has also been sued in London by James Hong, an executive director at Blumont. Hong claimed the bank breached its duties by “arbitrarily” selling his shares in the three Singapore commodity companies held as collateral, according to the complaint.
Regulators around the world have stepped up oversight of capital markets after the global financial crisis in 2008. Singapore’s central bank established a 13-member council in 2010 with the goal of boosting corporate governance standards and investor confidence. The Singapore Exchange, Southeast Asia’s biggest bourse, said after the decline of the three stocks it plans to add circuit breakers in 2014 to halt trading for 10 minutes when shares move 10 percent in either direction.
The case is Quah Su Ling v Goldman Sachs International. HQ13X05341. High Court of Justice, Queen’s Bench Division.
--With assistance from Kit Chellel in London. Editors: Joe Schneider, Khalid Qayum