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A FAMILY of three were yesterday ordered to vacate their three landed properties in Bukit Timah after OCBC Bank won its case to get them to repay a multi-million-dollar loan.

Mr Moey Keng Weng, former chief financial officer of Malaysia-Singapore Airlines, the forerunner of SIA; his wife, Madam Chang Chi Lan; and daughter Meng Yee, had tried a novel defence to avoid repaying the loan, which now stands at more than $23 million.

Instead, the family lost its case, and was given a week to vacate two of its three houses at Jalan Ampang.

They were given three weeks to get out of the third house, because they currently live in it.

The saga began in 1996, when Mr Moey developed the plot of land to build four bungalows. The daughter took a $15 million overdraft.

In 1998, when they exceeded the overdraft limit, they refinanced one of the houses.

That year, Tat Lee merged with Keppel Bank. The new entity, Keppel TatLee Bank, started legal action against them in April 1999 to recover the money but did not follow through.

In 2001, Keppel TatLee merged with OCBC Bank. OCBC sued the family to recover the money in 2002.

When the trial started last week, the family’s lawyer, Mr Andre Arul, relied on a novel defence. He argued that OCBC had no right to recover the loan because it was not a party to the original transaction.

The Banking Act states that the undertakings of the original banks shall be ‘transferred to and vest’ in the new bank.

But Mr Arul argued that a debt written off before a merger cannot be transferred to a successor bank since it has been cancelled. The family claimed the debt had been written off by Tat Lee.

However, OCBC maintained that the debt had not been written off. It said Mr Moey had ‘fabricated’ a story about being told by Tat Lee representatives that the debt was written off.

Mr Moey claimed that former Tat Lee chairman, Mr Goh Eng Chew, a golfing buddy, told him that it had been written off.

Mr Moey said that when he met two Tat Lee bank officers, they nodded when he told them what Mr Goh said. But one of the officers has given evidence to the contrary.

OCBC argued that even if the debt had been written off, the bank could still sue to recover the money. A write-off is merely an ‘internal accounting entry’ - not the same as ‘forgiving’ a debt which means a mutual agreement where the bank waives the debt, on some condition.

Yesterday, Justice Tay Yong Kwang agreed with OCBC’s lawyers that the family had to pay up. He also ordered the family to pay the legal costs.

Source : Straits Times - 5 Apr 2006