Saturday, November 10, 2007

It is the minorities’ contention that the en bloc sale of Horizon Towers - to Hotel Properties and its partners for $500 million

Suggestions that the Horizon Towers sales committee failed to act in owners’ best interests took centrestage when the Strata Titles Board (STB) hearing resumed yesterday.

The serious mien of the session was, however, periodically broken by moments of frivolity - some more tasteful than others.

Former sales committee secretary Wee Hian Siew spent a tough full day on the stand, as lawyers for the minority owners - those who didn’t agree to the collective sale - grilled him on how he and the sales committee handled the sale.

It is the minorities’ contention that the en bloc sale of Horizon Towers - to Hotel Properties and its partners for $500 million - was carried out in bad faith and should not be approved by the STB.

Philip Fong of Harry Elias Partnership questioned Mr Wee for almost three hours on the collective sale procedures carried out by the sales committee.

Mr Fong cited specific instances of when key procedures were not followed - such as when notices and circulars to owners on the collective sale were insufficient, untimely or inaccurate.

Mr Fong also asked why Mr Wee didn’t try to get a better sale price when it became known that residential property prices were beginning to soar; he referred Mr Wee to a Jan 11 Business Times article, ‘Developers revive interest in unsold collective sale sites’, reporting just such a surge in home prices.

Mr Wee’s response - ‘I don’t believe anything in the papers.’ - drew sniggers from the crowd.

When Mr Fong pressed on, saying that BT was ‘a respectable daily’, Mr Wee clarified his comment to mean that he felt ‘we should not take everything at face value’.

The protracted session, however, prompted several abrupt remarks from the tribunal’s chairman Philip Chan, who interrupted Mr Fong on more than one occasion - once, for an early lunch break and a second time to tell the senior lawyer that his allotted time was up.

Kannan Ramesh of Tan Kok Quan Partnership also subjected Mr Wee to a lengthy cross-examination.

He focused on the promise made to owners that they would get an 80 per cent premium if they sold their unit in an en bloc sale than if they were to sell them individually.

Referring again to the Jan 11 BT article - and the fact that neighbouring development, The Grangeford, had upped its minimum asking price by a quarter - Mr Ramesh said these should have alerted the Horizon Towers’ sales committee to the fact that property prices were rising, that the promised premium had been ’significantly eroded’ and that they should have done more to get a higher price.

Mr Wee said the sales committee did try but relied on the expert advice of their sales agent, Alvin Er, that $500 million was the best price they could get. He said it never occurred to him that he could seek advice from other experts.

The tribunal’s chairman, Mr Chan, then asked Mr Wee if he felt he had carried out the duties expected of a secretary of the sales committee.

That prompted Mr Wee to ask, ‘What do you mean by a secretary?’, to which Mr Chan retorted ‘without a skirt’ - a comment that drew an audible objection from some members of the viewing public.

The STB also rejected one majority owner’s application to have separate representation in this hearing.

Susanna Rusli had applied last week to participate in the hearing, separately from the other majority owners - but the board yesterday dismissed her arguments.

The hearing continues today with a second former sales committee member, Henry Lim, on the stand.

Source : Business Times - 7 Nov 2007

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