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Country Heights poised for expansion abroad

KUALA LUMPUR: Tan Sri Lee Kim Yew has wasted no time kicking off Country Heights Holdings Bhd’s (CHHB) expansion abroad after being made the group’s adviser. Already, the company has outlined plans to expand into China and Australia.

According to CHHB general manager of corporate marketing and communications Diani Lee Cheng Ni, Lee will lead a new expansion phase in which the property and leisure group aims to strengthen its presence overseas.

Lee has been on the company’s board as non-executive deputy chairman since 2007 after relinquishing the post of managing director. Interestingly, CHHB had never ventured into these two countries in the past six years, even though Lee sits on the board.

CHHB hired Mark Victor Rozario as the company’s managing director after Lee stepped down from the post. In 2011, Dianna Lee Cheng Wen took the helm as chief executive officer (CEO).

“CHHB currently has no projects in China or Australia. We are actively evaluating opportunities there. But I haven’t got much to say because we’re in the midst of negotiations and discussions, and it’s still preliminary at this point,” Diani told The Edge Financial Daily in a telephone interview. She declined to comment on the potential industries the group is looking to expand into in the two countries.

After Lee took a backseat at CHHB, he started Country Heights Grower Scheme (CHGS) in 2007. But the scheme was terminated last year as it faced a default risk due to its inability to extract the expected yield after five years of operations. The tycoon paid some RM215 million to take over CHGS’s plantation assets in Gua Musang as a result of the early termination of the scheme.

Now it is reported that Lee is looking for a buyer for his plantation assets, including those previously held under CHGS, to raise RM400 million.

Last Thursday, CHHB announced to Bursa Malaysia the appointment of Lee as group adviser for two years to advise on the group’s strategic business development, specifically in overseas expansion. Lee will also remain as non-executive deputy chairman of the group.

When commenting on his additional role, the tycoon candidly said: “I need the job”. However, some quarters consider the advisory fee of RM225,000 per month to be high, and wonder whether the post comes with executive responsibilities, especially when the group CEO’s annual salary is RM295,000, according to the latest annual report.

On these, Diani said the amount was “unanimously agreed” by the board after taking into account Lee’s contributions to the group over the years.

Asked why Lee was not given an executive role instead, Diani said: “That was the board of directors’ decision on how to run the business.”

In the announcement, CHHB highlighted that Lee had assisted the company he founded during the downturns, especially when he had voluntarily stopped receiving a basic salary during his tenure as group managing director since the 1997/98 Asian financial crisis for 11 years. Lee had also extended an interest free loan in relation to redeeming the Golden Horses Palace Bhd bond in 2008.

“He will not be involved in the day-to-day operations of the group,” said Diani, who is the third daughter of Lee and sister of Dianna.

Diani said that with a new and younger management taking over the helm of CHHB since June 2011, it has many projects in the pipeline. “All of these projects are through Tan Sri’s business connections and network. [Thus], we are banking on him to provide us guidance and help the group soar to new heights. Tan Sri will also be the main driving factor in the group’s expansion overseas.”


This article first appeared in The Edge Financial Daily, on February 10, 2014.

 

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