Businessman ordered to pay $7m after reneging on $8m share buyback promise in sale of workers’ dorm
The High Court said the businessman could not back out of his promise when the deal became less favourable.
A businessman who promised to buy back shares worth $8 million later refused, claiming the deal was not legally binding because it involved a foreign-worker dormitory exceeding its approved capacity. The High Court rejected his arguments and ordered him to pay $7.01 million in damages. The case revolved around a 2015 agreement where businessman Oon Koon Cheng sold his company that owned a dormitory in Woodlands Industrial Park, which was housing more workers than its approved capacity of 320 workers.
The $32 million deal included $24 million in cash and $8 million in USP Group shares. When the time came to fulfill the share-buyback obligation in 2019, the businessman declined. The court found that the businessman knew about the discrepancy, which made the dormitory business more profitable. The judge ordered the businessman to pay the damages, calculating the difference between the promised $8 million and the market value of the shares at the time of breach.
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