Ex-IPP director Goh Jin Hian wins appeal; court says firm failed to prove his breach caused losses

The Appellate Division of the High Court has found Goh Jin Hian, a former director of insolvent marine fuel supplier Inter-Pacific Petroleum (IPP), is not liable to pay US$146 million (S$187.9 million) plus interest in compensation for losses suffered by the firm.

- Grace Leong

In overturning a lower court ruling that found Goh was not entitled to relief from liability, the Appellate Division wrote: "While we agree with the (High Court) judge that Dr Goh had breached the care duty by reason of his ignorance of the cargo trading business, IPP has failed to show... that the breach caused the loss in question."

Goh, the son of former prime minister Goh Chok Tong, served as a director of IPP from June 28, 2011 to Aug 12, 2019.

The court clarified that "it cannot be part of a director's duty of supervision and oversight to pick up fraud unless there are telltale warning signs".

A 63-page ruling delivered on June 5 by Justice Kannan Ramesh, a judge of the Appellate Division, stated: "A director may be a sentinel, but he is not a forensics investigator or a sleuth, unless there are signs that would put him on inquiry."

The other two judges presiding were justices Tay Yong Kwang and Woo Bih Li.

"It does not follow that where a director has fallen asleep at the wheel, any or all losses occasioned to the company during the slumber should be vested on the director. Where the director has breached the duty of care, skill and diligence, the burden is on the company to prove that the breach has caused the loss suffered by the company," the court ruled.

Senior Counsel Thio Shen Yi of TSMP Law Corporation, who represented Goh, noted that the latest decision is an important clarification on the law of the duties of directors.