No information available on Ho Hup’s JV with Malton

KUALA LUMPUR: Ho Hup Construction Company Bhd’s new board has found “no information available” on the basis and justification of the shared ratio for the joint-development agreement (JDA) announced last week between the company and Malton Bhd, nor for Ho Hup’s reported minimum entitlement of RM265 million.

It made the statement yesterday (March 22) in response to a query from Bursa Malaysia Securities which asked for further details on its JDA between its 70%-owned subsidiary Bukit Jalil Development Sdn Bhd (BJD) and Pioneer Haven Sdn Bhd (PHSB), a subsidiary of Malton.

“In addressing Bursa Securities’ request for additional information regarding the JDA entered between BJD and PHSB, the current board of directors of Ho Hup took office on March 17, 2010 and was thus not privy to the JDA that was dated March 16, 2010,” it said.

Ho Hup also said there was “no information available” on the proposed utilisation of proceeds from the proposed development on 60 acres (24 ha) of land.

“The only information available is that under the JDA the parties are entitled to their respective entitlement to the proceeds upon the issuance of the certificate of practical completion of each phase of the development over a period of 10 years,” said the company.

“There was no source of funding for financing the investment in the JDA from BJD as PHSB shall be solely responsible to meet and defray the development costs in the implementation of the development.”

It added the current board of directors was reviewing the JDA and seeking legal advice on the matter, and the original cost of investment of the land located in Kuala Lumpur was RM93 million and acquired by BJD on Sept 12, 1995.

It said the proposed development comprised 140 units of shopoffices, three office towers, eight blocks of SOHO (small office/home office), six blocks of serviced apartments, one hotel block and one shopping complex unit, but that there was again no information available on the total development cost.

Ho Hup said the development was expected to be carried out and completed in phases over 10 years from the approval date of the development order for master plan layout.

“The expected commencement date is six months from the date of issuance of the development order for the master layout plan and approval of building plan by the appropriate authorities, ie expected in October 2010,” it said.

“Development order for master layout plan was approved on Oct 10, 2007, but lapsed. An amended application for development order for master layout plan was submitted on Nov 26, 2009 and pending approval.”

The JDA between the two was signed just a day before Ho Hup’s EGM on March 17, 2010, which saw seven directors, namely deputy chairman Datuk Vincent Lye, Lim Ching Choy, Datuk Liew Lee Leong, Lai Moo Chan, Long Md Nor Amran Long Ibrahim, Mohd Shahril Hamzah and Foo Ton Hin being removed from the board.

In their place, six new directors, namely Datuk Kamaruzzaman Shariff, Hew Thin Chay, Yusob Md Tasir, D Felix Dorairaj, Slamat Hamzah and Chow Seck Kai were voted in.

The EGM was called by substantial shareholder Low Chee & Sons, the family vehicle of former managing director Datuk Low Tuck Choy, which has a 22.66% stake in the company to replace Ho Hup’s present board members except for his younger brother, Teik Kein.

This article appeared in The Edge Financial Daily, March 23, 2010.

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