By Selina Lum

A FAMILY of three from Taiwan who sued HSBC Private Bank in the High Court over a foreign exchange trading account has lost the case.

Mr Huang Po Jen, 30, who dealt with the bank, alleged that HSBC had breached an agreement to let him carry out an investment strategy, forcing him to close the trade and as a result, suffered losses.

He had sued the bank for US$3 million (S$4.57 million) together with his mother, Madam Chen Ling San, 57, and his grandmother, Madam Chen Cheng Su Yun, 83, who are joint account holders.

But Justice Belinda Ang dismissed the suit yesterday, saying the phone conversation that Mr Huang had with two bank officers did not constitute an oral contract.

Mr Huang, a naturalised New Zealand citizen, had opened an account with the HSBC unit here in January 2004 which allowed him to trade in foreign exchange.

He manages the family's assets. The two women live in Taiwan.

In October 2004, he bought US$22 million by selling &yen7.8 million, essentially betting that the euro would depreciate against the US dollar.

However, the euro strengthened and he began to incur paper losses.

Mr Huang claimed that during a phone conversation with two bank employees on Nov 8, 2004, it was agreed that he could hedge this trade.

That meant conducting an opposite trade, selling US dollars to buy euros, to make some profit to offset his losses.

Mr Huang claimed that he was allowed to do this by the bank until the original transaction turned profitable, as long as his collateral did not fall below a certain level.

But on Dec 2, he said, he was told that he could no longer use this strategy.

By pulling the plug on the agreement, HSBC caused him and his family to suffer losses, said Mr Huang, who was represented by lawyer Kannan Ramesh.

But the bank's lawyer, Senior Counsel Steven Chong, argued that there was no case for the defendant to answer, and the judge agreed.

Effectively, this exempted the bank's witnesses from taking the stand to testify and being cross-examined by the other side.

It also meant the judge would have had to make her decision based on evidence produced by Mr Huang.

Delivering her oral decision yesterday, Justice Ang agreed with Mr Chong that Mr Huang's evidence did not establish his case in law.

She said the two bank officers and Mr Chong, in their phone conversation, were having a discussion about how to clear the margin shortfall in the transaction.

The judge agreed with Mr Chong's argument that it was impossible to spell out any contractual terms during the conversation.

Speaking to reporters after the trial ended three weeks ago, Mr Huang said it was a pity that the bank's employees did not testify.

'I was looking forward to them taking the stand. I had hoped they would have given me an explanation.'

He said that he felt drained after spending four years trying to resolve the case.

In that interview, he said he would appeal since he had already come so far.

This article was first published in The Straits Times.