Asian Tycoon Sues Citi Over Losses

Vivian Wai-yin Kwok, 05.19.09, 05:58 AM EDT
Thomson Reuters

Singapore-based Oei Hong Leong sued his longtime private bankers.

Singapore Tycoon Oei Hong Leong, who was widely dubbed "The Man with the Midas Touch," sued Citigroup for negligence and misrepresentation after he lost $1billion on foreign exchange and U.S. Treasury bond transactions last year.

Oei's lawsuit filed with the High Court of Singapore said the private banking arm of Citigroup ( C - news - people ), with which he has had a 30-year relationship, repeatedly gave him an inaccurate picture of his trading exposure, which led him to take riskier positions than he would have taken otherwise. Oei argued that he recorded massive losses as he was forced to close his trading positions in October during extremely volatile -- and unfavorable -- market conditions, when he finally realized the full extent of his exposure.

After Oei fully paid off those losses, he went to the court to sue Citigroup's private banking arm in the High Court for negligence and misrepresentation, the Singapore "Straits Times" reported Tuesday, citing court documents. Oei declined to comment about the court case, the local newspaper added.

A spokesman from Citi told Reuters in an email, "We believe that the claim is without merit and we fully intend to defend our position vigorously." The spokesperson, however, declined to comment further on the matter.
Ranked 27th on Forbes's Singapore Rich List in 2008, Oei had a net worth of $210 million based on his stakes in publicly traded companies and in private company filings.

The high-profile Indonesian-born businessman has always mesmerized the financial community in both Singapore and Hong Kong because the stocks he bought would usually and suddenly rise to dizzying heights before he sold them.

He has a track record of selling and restructuring third-tier listed companies. In his most famous deal, when he sold a controlling stake in Hong Kong-listed Tricom Holdings to Richard Li, the son of Hong Kong billionaire Li Ka-shing, Oei was estimated to have made a profit of about 150 million Singaporean dollars. The junior Li injected several internet ventures to the company and renamed it Pacific Century Cyberworks. During the tech stock bubble in 2000, the stock rose from about 30 Hong Kong cents (4 cents) to 28.5 Hong Kong dollars ($3.65) in a few weeks before it merged with Hong Kong Telecom in August that year to become PCCW.

Oei returned to Singapore after the deal with Li. Last year, he sold his stake in formerly troubled Natsteel for more than $100 million and delisted his International Capital Investment in May.