According to Bloomberg, the co-founders of Ezra Holdings, Ltd., a Singapore-based offshore marine company, reached a confidential settlement resolving their lengthy legal battle over $164 million in marital assets. Much of the dispute centered around ex- wife Goh Gaik Choo’s claim that ex-husband Lee Kian Soo had dissipated marital assets.
Goh alleged, that after she filed for divorce in 2008, Lee and the couple’s son Lionel colluded to dispose of Lee’s assets. Lee transferred a sizable amount of Ezra stock for 45 Singapore cents per share to son Lionel. The problem was that market value of the shares was nearly triple that at the time. When called upon to explain the transfer, Lee told the court that he transferred the shares for 45 cents because he was born in 1945. The court didn’t buy this rationale and ordered that Lee pay Goh a hefty sum but did not award her monthly maintenance as she had requested. The settlement resolved both sides’ appeals.
We’ve blogged about transferring assets to friends and family here before. This case is an excellent example as to why every asset search should start with a look at the public record. Many times this look should include a review of records on people close to the debtor. This includes securities filings, litigation records, real property records, media reports and more. Reviewing securities filings can be particularly enlightening in cases like this one. Ezra Holdings is publicly listed on the Singapore Stock Exchange. The Singapore Stock Exchange tells you the top 5 owners by shares held in a listed company. Lee’s son Lionel is the top Ezra shareholder at nearly 23%. A comparison of his ownership stake in given years would probably tip you off that Lionel had been amassing shares of the company, prompting a closer review of his securities transactions. To the same effect, had Lee been listed as a top 5 owner in one year and disappeared off the list some time later, this would tend to indicate dissipation of assets.
In the US, directors of a public company and its beneficial owners of 5% or greater must file forms with the SEC indicating the number of shares they have and when their ownership stake changes. We tend to find extremely valuable information in these forms which is why we always make sure to save plenty of time to dig through SEC records when we’re searching for assets.
Of course, not every company is a public company and private companies might require more digging. But there is still a lot of value to be had in doing a public record search and uncovering all that you can before moving on to latter phase investigative techniques or bringing in forensic accountants to dissect financial records.