Lawyer warns action against firm or Beijing parent is unlikely to succeed
Hundreds of small investors in China Aviation Oil (Singapore) Corp (CAO) who met last night to weigh up possible legal action over the firm's US$550 million derivatives loss have been advised by the Securities Investors Association of Singapore that options are limited.
'Simply put - very difficult,' the 63,000-member association's president David Gerald said.
Engeling Teh Practice lawyer Karish Kumar told yesterday's shareholder meeting that action could possibly be taken against CAO, its Beijing-based parent and company directors. But in each case, he warned, the likelihood of success was extremely limited.
'I'm sorry I am not able to hold out more hope for you,' Mr Kumar told investors.
Mr Gerald also warned them against taking legal action before CAO's scheme of arrangement was presented to creditors. 'Don't sue yet because we need to get the company back on its feet,' he said.
CAO applied for court protection earlier this month after raking up the losses, sparking Singapore's biggest financial crisis since rogue trader Nick Leeson broke Barings Bank in 1995.
