Here's a 182-page judgment by the General Division of the High Court of Singapore discussing the duties of trustees under Singapore law, their key fiduciary responsibilities, and how their actions might be rendered void in certain circumstances.
The case concerns the Bhojwani family in Singapore and disputes regarding holdings in Shankar's Emporium Pvt. Ltd. After the founder passed away, a testamentary trust was established. The Trust's assets include shares in SEPL and other companies. Mr. Sajan Bhojwani was entrusted to manage the Trust as a Trustee.
Other beneficiaries challenged Sajan Bhojwani's acts and deeds over time. They alleged that Sajan breached his duties by allegedly commingling trust assets with personal accounts, failing to provide accurate accounts of the trust, and concealing the trust's existence from the beneficiaries for a prolonged period. They also alleged that he acted improperly by converting a highly valuable "Founder’s Share" into ordinary shares without consideration for the trust, resulting in a significant loss of value for the trust assets. It was also alleged that he sold shares held in the trust at undervalued prices and failed to ensure the proper realization of assets during the striking off of companies, further breaching his duty of care and custodial stewardship.
The Court analyzed the facts and evidence adduced by the parties and concluded that Sajan breached his fiduciary duties by commingling trust assets, failing to maintain proper accounts, and concealing the Trust from beneficiaries. It said that converting the founder’s Share into ordinary shares without adequate consideration was a clear breach of trust, resulting in a significant loss to the Trust. The court also found that the exclusion of two other individuals from the Trust was invalid as it was done with improper motives and was contrary to the purpose of the Trust.
The Court stressed on duties of Trustees under Singapore law, which are as under:
1. Trustees are bound by fiduciary duties, including the duty to act in good faith, avoid conflicts of interest, manage trust assets prudently, and provide accurate accounts of the trust.
2. They must ensure no commingling of trust assets with personal assets and maintain transparency with beneficiaries about the administration of the trust.
3. Trustees are also required to exercise powers reasonably and in accordance with the purpose of the trust as established in the trust deed or will.
Post retrieved from LinkedIn
By Rohit Jain
Strategic Communications | Law | Policy
For more, read the judgment below:
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