An Indonesian couple is set to sue UK-listed Standard Standard Chartered Bank in Singapore over alleged breach of duties and loss of money from a failed foreign exchange trade during the 2008 financial turmoil.
Soesanto Prajogo and his wife Lioe Lip Joeng are claiming damages of US$2.441 million (S$3.053million) over one bank action and A$40,000 (S$47,200) for another alleged breach.
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The couple opened accounts with American Express Bank in 2001 and held deposits in Singapore. They claimed that they had more than enough collateral in the bank to avoid a margin call.
When StanChart purchased American Express Bank in 2008, they became its private banking clients in July of that year until now.
On 7 October 2008, StanChart shut down the clients’ New Zealand dollar-US dollar positions without receiving instructions or authority from them, according to the writ of summons filed in August in the High Court.
According to the summons, StanChart failed to provide the couple with a reasonable cause as to why the position was closed unilaterally.
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By GlobalDataPrajogo said that they were unhappy with an incident in mid-2009, as StanChart failed to execute an A$10 million forex option in spite of an instruction from him.
The couple added that in both cases, StanChart acted wrongfully and in breach of its duties.
The bank said the account had dropped into a margin shortfall on the night of Oct 6, 2008, and early morning of 7 October. This account had NZ dollar-US dollar and Aussie-US dollar positions open and the greenback gained sharply against both.
Rejecting the allegations, StanChart said the night-desk trader could not contact Prajogo and then closed out the couple’s NZ dollar-US dollar positions.
StanChart also added it did not receive any instruction from Prajogo or Lioe to execute the option on the Australia dollar-US dollar trade in mid-2009, the second issue which was raised by the couple.
