Saturday, November 10, 2007

Comments made by Hotel Properties (HPL) group executive director Christopher Lim, and have accused him of being in contempt of court.

Lawyers for both the majority and minority owners of Horizon Towers have objected to recent comments made by Hotel Properties (HPL) group executive director Christopher Lim, and have accused him of being in contempt of court.

On Thursday, BT reported Mr Lim as saying that he was ‘concerned about’ the Strata Title Board’s (STB) view that it had no duty to make a ruling on the collective sale of Horizon Towers before the Dec 11 sale completion deadline. He said that such a stance could ‘potentially scuttle’ the deal.

The STB tribunal had taken this view on Wednesday, after both sets of owners agreed that the board did not have a legal obligation to make a decision by Dec 11.

This prompted Mr Lim to announce that the buyers, HPL and its partners, were ‘reviewing our position’. While he did not elaborate, BT understands that this could mean that the buyers will proceed with the $1 billion lawsuit they had earlier filed against the majority owners for breach of the sale and purchase agreement.

Lawyers for both sets of owners yesterday spoke out against the comment. KS Rajah of Harry Elias Partnership, which represents one group of minority owners, said that it was inappropriate for Mr Lim to comment on ongoing legal proceedings. He said that it was contempt that should be referred to the Attorney-General’s chambers.

‘Anybody who seeks to muddy the waters must be told to lay off or you will face the consequences,’ Mr Rajah said. The STB tribunal’s chairman Philip Chan said that the board would deliberate on the matter.

News of the potential lawsuit also distressed a number of the majority owners of Horizon Towers. Sales committee chairman Lim Seng Hoo however sought to reassure the owners that they were not in breach of the sale and purchase agreement as the committee was continuing ‘to prosecute the present STB hearings expeditiously’.

He also said that their submission to the tribunal on whether it had a legal obligation to rule on or before Dec 11 merely explained that ‘timelines agreed to between the parties to a sale and purchase agreement do not impose legal obligations upon the board’.

The drama continued in the hearing before the STB, as a new witness - former sales committee member Henry Lim - took the stand.

Philip Fong of Harry Elias fired off a series of questions to Mr Lim, asking him if the sales committee recognised that allowing its sales agent, Alvin Er, to take his commission from the buyer posed a conflict of interest for Mr Er, as that may have stopped him from trying harder to find a better price for Horizon Towers after getting an offer from HPL that met the sellers’ minimum reserve price. Mr Lim did not answer the question, only saying that he had ‘no comment’.

Senior Counsel Michael Hwang, who represents another minority owner, asked Mr Lim why the sales committee did not consider other expressions of interest - there were at least four other parties which had indicated that they were prepared to pay a higher price than HPL.

Mr Hwang cited the example of an unnamed Hong Kong developer who had offered $510 million - above HPL’s offer of $500 million - for Horizon Towers. Mr Lim said that he had attempted to contact the developer but had failed to get in touch.

And it was during a tough session with a third counsel for the minorities, Kannan Ramesh of Tan Kok Quan Partnership, that Mr Lim revealed that he had been frustrated with the short amount of time the sales committee had unwittingly imposed on itself to consider HPL’s offer. He said that he felt that they could have succeeded in getting better offers if they had more time to do so.

After intense questioning, Mr Lim admitted that three of the nine former sales committee members, including himself, were not satisfied with HPL’s offer and had expressed their reservations about it.

Mr Lim also testified that the sales committee had rushed into the deal - and had failed to consult the majority owners before accepting HPL’s offer. He said that the sales committee feared that it would be sued by the majority owners if it had taken too long to revert to HPL and had lost the offer as a result. But he also admitted that the ‘prudent safe option’ for the sales committee would have been to consult the owners - except that their lawyers, Drew & Napier, had advised them otherwise.

Mr Lim was clearly uncomfortable with the unrelenting scrutiny, choosing to answer most of the questions posed to him with either ‘no comment’ or ‘I can’t recall’.

Source : Business Times - 10 Nov 2007

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