Ho Hup calls truce with Malton

PETALING JAYA (July 4): Ho Hup Construction Co Bhd has finally called for a truce with Malton Bhd on a two year dispute over a piece of land in Bukit Jalil. In a statement on Tuesday, Ho Hup said the company and its 70% subsidiary, Bukit Jalil Development Sdn Bhd (BJD), have come to an amicable settlement with Pioneer Haven Sdn Bhd (PHSB), a subsidiary of Malton, on the developmental rights of its 60-acre (24ha) land in Bukit Jalil.

The settlement was formalised in a supplemental agreement (SA) that contains two key variations to the joint development agreement (JDA) signed more than two years ago. The SA entails the joint development between both companies on 50 acres of the Bukit Jalil land (JV land), instead of the entire 60 acres.

The remaining 10 acres will be developed solely by BJD. Additionally, BJD will be entitled to 18% instead of 17% of the estimated gross development value of the JV land, subject to a minimum of RM220 million. PHSB also agreed to pay for, and on behalf of BJD, the servicing of monthly interests and the redemption of the secured loan of RM75 million from lnsas Credit & Leasing Sdn Bhd.

These payments shall be treated as part of BJD's entitlement. PHSB will also assist BJD in securing financing of up to RM20 million for the development of the 10-acre land. Ho Hup said it had agreed to discontinue its appeal to the Federal Court and withdraw its suit to invalidate the JDA signed between BJD and PHSB.

Ho Hup executive director Derek Wong Kit Leong said the board of directors is of the view that the amicable settlement reached through a variation of the original terms of the JDA was for the mutual interest and benefit of all parties.

The resolution of the dispute will help facilitate and speed up Ho Hup's proposed PN17 restructuring exercise to regularise its operations. BJD and PHSB signed the JDA on March 16, 2010 whereby PHSB was given the right to develop the entire 60 acres of freehold land in Bukit Jalil on a joint-venture basis. Under the JDA, BJD was entitled to 17% of the gross development value of the 60 acres.

Following changes at the shareholding and board levels, Ho Hup filed a suit to invalidate the JDA. The High Court ruled in favour of Ho Hup on June 7, 2011. However, the High Court decision was then reversed on PHSB's appeal to the Court of Appeal in February 2012.

On May 17, 2012, Ho Hup successfully obtained leave of court to appeal to the Federal Court against the Court of Appeal's decision. Before this amicable settlement was announced on Tuesday, Ho Hup was still awaiting a date for the full hearing of the appeals at the Federal Court.

This story appeared in The Edge Financial Daily on July 4, 2012.

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