Court finds no evidence of creditor misconduct in FTMS Holdings dispute.
SINGAPORE – Two former directors of FTMS Holdings, Mr. Balbeer Singh Mangat and his wife, Madam Sirgit Gill, have lost their legal bid to prove a conspiracy against them in their bankruptcy case.
The couple accused Mr. Jagdish Murli Chanrai, a principal of the Kewalram Chanrai Group, and other FTMS creditors of orchestrating a scheme to oust them from the now-insolvent private education company. However, after a trial spanning over 40 days, Senior Judge Chan Seng Onn ruled there was no evidence to support their claims.
Allegations and Loan Agreements
FTMS Holdings, founded by Mr. Mangat, operated education and training campuses across 10 countries, including Singapore and Malaysia. In 2015, the company borrowed US$3 million from Qualgro and US$4.5 million from Tembusu Growth Fund III, with both loans personally guaranteed by Mr. Mangat and Madam Gill.
When FTMS defaulted on its loan payments, stricter repayment conditions were imposed, leading to the couple’s eventual removal from the company and bankruptcy declaration in October 2018.
The couple alleged that Mr. Chanrai, along with other directors and creditors, conspired to take control of the company. They sought to nullify the loan agreements, claiming they were unconscionable and part of a malicious plot.
Court’s Ruling
Judge Chan found no merit in the claims of conspiracy or misrepresentation. He noted that the creditors acted lawfully within their rights to enforce loan terms after repeated defaults by FTMS. The couple, described as experienced businesspeople, had been legally advised when signing the agreements.
The court also dismissed allegations that the new board members, Mr. Eric Alfred Schaer and Mr. Nicolas Kim-Hoang Nguyen, failed to help FTMS raise funds. The judge stated that financial struggles resulted from the company’s poor business decisions and unsustainable loan practices, not from any orchestrated scheme.
Key Observations
The judge emphasized that Mr. Chanrai had invested significantly in FTMS, including an $8 million share subscription in 2011 and personal loans to the company. This undermined the plausibility of any alleged intent to harm the business.
Justice Chan concluded that the couple’s financial troubles were self-inflicted, driven by overexpansion and reliance on high-interest loans, which ultimately led to FTMS’ insolvency.
Legal Representation
Mr. Chanrai was represented by Meritus Law.
Tembusu’s legal counsel was Prolegis.
Qualgro was represented by Blackoak.
The case highlights the risks of aggressive financial strategies in business operations and the challenges of proving conspiracy in complex corporate disputes.
