Man Ordered to Pay $7 Million After Reneging on $8 Million Share Buyback Promise

Singapore Business News • 20 August 2026

The $32 Million Transaction

The dispute arose from a 2015 transaction involving the sale of Koon Cheng Development (KCD), which owned three industrial properties at Woodlands Industrial Park.

The transaction was valued at approximately $32 million, comprising about
$24 million in cash and $8 million in shares in USP Group.

Because the seller was concerned about receiving shares instead of cash, businessman Li Hua personally signed a letter of undertaking agreeing to repurchase those shares for $8 million if the seller exercised the option within three years.

Why the Court Rejected His Defence

When the option was exercised in 2019, Li refused to repurchase the shares. He argued, among other things, that problems relating to the occupancy of a worker dormitory connected with the transaction made the agreement unenforceable.

The High Court rejected those arguments. The judge found that Li was aware of the relevant dormitory occupancy issue when the transaction was entered into and had nevertheless proceeded with the deal.

The undertaking itself was also considered sufficiently clear. It was essentially a promise by Li to buy the shares back at the agreed fixed price if the option was exercised.

How the $7 Million Damages Were Calculated

The agreed repurchase price was $8 million. By the time Li was required to perform the undertaking, the shares held by Oon were worth only about $986,842.

Key Business Lesson

This case highlights the importance of carefully considering personal guarantees, letters of undertaking, buyback agreements and other contractual commitments before signing them.

Business owners and investors should ensure that exit mechanisms, valuation provisions, representations and potential liabilities are properly reviewed before entering into a transaction.