<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 3, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Scientist, bank locked in legal battle over investment loss
Deutsche Bank claims client owes it US$1.8m
By MICHELLE QUAH
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(SINGAPORE) Global investment bank, Deutsche Bank, is locked in a legal tussle with renowned Taiwanese scientist and private wealth management client, Chang Tse Wen, in the Singapore High Court.
Deutsche Bank claims Dr Chang owes it some US$1.8 million - a shortfall in his account with the bank, which was a result of his investment losses.
Dr Chang, however, has counter-sued - hoping to claim back the US$48 million deposit he lost - on the grounds that Deutsche Bank is responsible for his investment losses, having made misrepresentations to him in its investment advice and having breached its duty of care to him.
Dr Chang had his first meeting with Deutsche Bank in March 2007, when its Hong Kong assistant vice-president of private wealth management, Johnny Wan, travelled to Taiwan to introduce the bank's services to the scientist.
Mr Wan had known that Dr Chang's company, Nasdaq-listed Tanox Inc, was the subject of an acquisition attempt by biotechnology monolith, Genentech Inc. Tanox owned the patent rights to a sought-after asthma drug, Xolair - invented by Dr Chang.
If successful, Dr Chang stood to receive US$118 million from Genentech for his Tanox shares.
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</TD></TR></TBODY></TABLE>Dr Chang claims he agreed to open a private wealth management account with Deutsche Bank upon Mr Wan's representations of the bank's services to him - depositing some $26 million.
He also entered into a loan facility to make various investments through his account.
Dr Chang claims he was advised by Mr Wan to purchase a designated number of shares in Citigroup, UBS and Societe Generale at a designated purchase price every day for one year, through 34 Discounted Share Purchase Programmes (DSPP).
Due to drastic falls in the value of the shares of the banks in the DSPPs, he was informed by Deutsche Bank in March 2008 that his potential exposure under the DSPPs was in the region of $76 million.
Dr Chang said, pursuant to margin calls, he made further deposits amounting to $22 million. He also attempted to unwind his positions.
Dr Chang claims that by November 2008, his entire deposit sum of about $48 million was wiped out as a result of the unwinding of his positions and the continued purchase of shares through DSPP contracts that were still in force.
He said his account had a debit balance of $1.65 million in January 2009.
Deutsche Bank is now claiming that balance, plus interest accrued to date - a total of almost $1.8 million.
The bank claims its duties to Dr Chang have been clear from the start.
It points to the Service Agreement signed between the two parties which states that the bank 'is not acting as (Dr Chang's) fiduciary or advisor in respect of any services provided' and that Dr Chang is responsible for his own investment decisions.
The bank says the Risk Disclosure Statement signed by Dr Chang states that the investments 'involve a certain degree of risk because of their volatile nature and underlying assets' and that Dr Chang, in entering the transactions with the bank, understands the risks involved and will make his 'own assessment and rely on (his) own judgment'.
Dr Chang has, however, refused to pay the balance. He claims a fiduciary relationship did arise between them because he had made clear he understood very little about investments and had little time for them and that he would rely on Mr Wan for investment advice.
Dr Chang filed his counterclaim through Rajah & Tann yesterday.
Deutsche Bank, which is represented by Allen & Gledhill, told BT yesterday that 'allegations made by the defendant against the bank are unfounded and will be vigorously defended by the bank'.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Scientist, bank locked in legal battle over investment loss
Deutsche Bank claims client owes it US$1.8m
By MICHELLE QUAH
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Global investment bank, Deutsche Bank, is locked in a legal tussle with renowned Taiwanese scientist and private wealth management client, Chang Tse Wen, in the Singapore High Court.
Deutsche Bank claims Dr Chang owes it some US$1.8 million - a shortfall in his account with the bank, which was a result of his investment losses.
Dr Chang, however, has counter-sued - hoping to claim back the US$48 million deposit he lost - on the grounds that Deutsche Bank is responsible for his investment losses, having made misrepresentations to him in its investment advice and having breached its duty of care to him.
Dr Chang had his first meeting with Deutsche Bank in March 2007, when its Hong Kong assistant vice-president of private wealth management, Johnny Wan, travelled to Taiwan to introduce the bank's services to the scientist.
Mr Wan had known that Dr Chang's company, Nasdaq-listed Tanox Inc, was the subject of an acquisition attempt by biotechnology monolith, Genentech Inc. Tanox owned the patent rights to a sought-after asthma drug, Xolair - invented by Dr Chang.
If successful, Dr Chang stood to receive US$118 million from Genentech for his Tanox shares.
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He also entered into a loan facility to make various investments through his account.
Dr Chang claims he was advised by Mr Wan to purchase a designated number of shares in Citigroup, UBS and Societe Generale at a designated purchase price every day for one year, through 34 Discounted Share Purchase Programmes (DSPP).
Due to drastic falls in the value of the shares of the banks in the DSPPs, he was informed by Deutsche Bank in March 2008 that his potential exposure under the DSPPs was in the region of $76 million.
Dr Chang said, pursuant to margin calls, he made further deposits amounting to $22 million. He also attempted to unwind his positions.
Dr Chang claims that by November 2008, his entire deposit sum of about $48 million was wiped out as a result of the unwinding of his positions and the continued purchase of shares through DSPP contracts that were still in force.
He said his account had a debit balance of $1.65 million in January 2009.
Deutsche Bank is now claiming that balance, plus interest accrued to date - a total of almost $1.8 million.
The bank claims its duties to Dr Chang have been clear from the start.
It points to the Service Agreement signed between the two parties which states that the bank 'is not acting as (Dr Chang's) fiduciary or advisor in respect of any services provided' and that Dr Chang is responsible for his own investment decisions.
The bank says the Risk Disclosure Statement signed by Dr Chang states that the investments 'involve a certain degree of risk because of their volatile nature and underlying assets' and that Dr Chang, in entering the transactions with the bank, understands the risks involved and will make his 'own assessment and rely on (his) own judgment'.
Dr Chang has, however, refused to pay the balance. He claims a fiduciary relationship did arise between them because he had made clear he understood very little about investments and had little time for them and that he would rely on Mr Wan for investment advice.
Dr Chang filed his counterclaim through Rajah & Tann yesterday.
Deutsche Bank, which is represented by Allen & Gledhill, told BT yesterday that 'allegations made by the defendant against the bank are unfounded and will be vigorously defended by the bank'.
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