A Singaporean client of Opes Prime has taken legal action against the failed stockbroker and against investment bank Merrill Lynch over share losses that scuttled a takeover bid.
Asia Pacific Links Limited (APLL), the investment vehicle of Anthony Soh, launched an action last Friday in the Federal Court to sue Opes for damages.
It is also seeking leave to proceed against Merrill Lynch's Singapore arm.
APLL held about 46 per cent of the register of commodities and engineering services firm Jade Technologies when it entered a securities lending agreement with Opes.
More than 300 million shares APLL held in Jade, where Dr Soh was also the group president, were transferred to Merrill Lynch between September last year and January this year, according to a statement issued today by law firm Slater & Gordon.
Previously Dr Soh had been assured by Opes directors Laurie Emini, Anthony Blumberg and Julian Smith there would be no change in the beneficial ownership of the shares and that Merrill Lynch would hold the shares as custodian only.
But on April 1, after Opes' collapse, Merrill Lynch sold 95.2 million Jade shares which had been transferred by APLL under its agreement with Opes.
Three days later APLL was forced to withdraw its takeover offer for Jade.
Several of Singapore's financial authorities are now looking into the aborted takeover bid.
Slater & Gordon lawyer Steven Lewis said Dr Soh's investment firm had suffered substantial loss as a result.
“The value of the lost shares - around $A50 million - is overshadowed by the consequential losses of APLL's failed takeover bid for Jade Technologies,” he said.
“The statement of claim alleges that representations made by Opes Prime were misleading and deceptive in breach of the Trade Practices Act but also raises questions about Merrill Lynch's behaviour.”
At the time the Jade shares were transferred to Merrill Lynch, it was on notice of APLL's interest in the shares, for example, in the Jade annual report at 7 December 2007.
“On obtaining a 30 per cent interest in Jade, Merrill Lynch was obliged under Singapore regulations to make a takeover offer which it did not.
On May 7, Merrill Lynch still held 161.18 million shares in Jade, according to Slater & Gordon.
The APLL bid joins a raft of other cases already being mounted against Opes and its backers ANZ Banking Group, Merrill Lynch and Dresdner Kleinwort.
About 1200 Opes clients lost shares they had placed with Opes in return for margin loans, when its bankers began selling a pool of nearly $1.6 billion in shares in a bid to recover money they were owed.
Opes had on-loaned the shares to the banks, but Opes clients have said they were under the belief that they retained ownership of the shares.
