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BT : ‘Penthouses cost $20m, $30m…where am I to go?’ November 16, 2007

Business Times – 15 Nov 2007

HORIZON TOWERS HEARING
‘Penthouses cost $20m, $30m…where am I to go?’

Apportionment method is unfair, argue some penthouse owners

By MICHELLE QUAH

(SINGAPORE) The minority owners of Horizon Towers who are objecting to the
en bloc sale of the development took the stand for the first time yesterday,
putting forth their reasons as to why the collective sale should not go
through.

Arguments on how the penthouse owners would be penalised by the
apportionment method – and how the price they would receive would not get
them similarly sized units in the same area – were just some of those
presented to the Strata Titles Board (STB) tribunal.

Ng Eng Ghee, a penthouse owner who is objecting to the en bloc sale, pointed
out that the apportionment of the proceeds was unfair to owners such as
himself.

The apportionment method used by Horizon Towers will assign proceeds to
units according to an equal mixture of land area and share value. But Mr Ng
pointed out that the share value assigned to a penthouse is only seven,
compared to a share value of five for the smaller units, even though his
penthouse is almost double the size of the smaller apartments.

This would result in him getting a much lower price for his unit, on a
per-square-foot basis, than the smaller units. But Senior Counsel Chelva
Rajah – who represents the majority owners – pointed out that Mr Ng also
contributes to the maintenance of the condominium according to his share
value.

Mr Ng then lamented that the $3.8 million that he would get for his
over-5,000 sq ft penthouse would not enable him to buy another comparable
unit in the Orchard Road area. He said in his affidavit that he has not seen
another penthouse that would suit him and his family of five people and two
large dogs more than his Horizon Towers unit, which even has a private
rooftop pool.

‘Penthouses in the area cost $20 million, $30 million, $15 million. I saved
for all this time, so that I could retire at this point. Now, where am I
going to go?’ he said.

The apportionment method used by Horizon Towers was also objected to by Ong
Sioe Hong, the sister of Metro Holdings group managing director Jopie Ong.

She also expressed her displeasure with some of the sales committee members
who bought extra units in the development at the time the committee was
formed to explore the potential of an en bloc sale. She felt that this gave
them a different ‘tolerance of pain’ as these extra units were investments
to them, rather than homes.

But Mr Rajah then asked her whether, if the sales committee members had
bought extra units for the purposes of making money in an en bloc sale, they
would not then wish to get as high a price for Horizon Towers as possible.
Ms Ong said that she felt that their agenda was different.

It is the minorities’ case that the en bloc sale of Horizon Towers to Hotel
Properties Ltd (HPL) and its partners was done in bad faith, as the sales
committee had not followed due process in conducting the sale, such as by
seeking out other more attractive offers for the development. Harry Elias
Partnership, which represents one group of minorities, called the collective
sale ‘a comedy of errors’.

The high-profile hearing is expected to end today, after which the STB
tribunal will deliberate on whether to grant a collective sale order to
Horizon Towers. But even this decision will not necessarily spell the end of
this saga.

For one thing, the tribunal needs to grant the order before the sale
completion deadline of Dec 11. Even if it does, the minorities can still
appeal against that decision. And if the tribunal decides not to grant an
order, there is the possibility that HPL will proceed with the lawsuit it
has filed against the majority owners for breach of the sale and purchase
agreement.

The high-profile hearing is expected to end today, after which the STB
tribunal will deliberate on whether to grant a collective sale order to
Horizon Towers. But even this decision will not necessarily spell the end of
the saga.

BT : DTZ: $500m was best en bloc price possible November 14, 2007

Business Times – 13 Nov 2007

HORIZON TOWERS HEARING
DTZ: $500m was best en bloc price possible

Site unattractive; but ex-sales committee member says higher offers were
received

By MICHELLE QUAH

$500 million – the amount it eventually attracted – was realistically the
best price Horizon Towers could have fetched in an en bloc sale, DTZ
Debenham Tie Leung director Tang Wei Leng told the Strata Titles Board (STB)
yesterday.

She was one of several marketing agents invited in early 2006 to make a
presentation on the en bloc sale potential of the development to its newly
formed sales committee.

Ms Tang’s testimony to STB yesterday suggests the eventual price of $500
million obtained by the Horizon Towers sales committee was the highest it
could have hoped for, given some of the development’s shortcomings.

Ms Tang said the Leonie Hill 99-year leasehold development was a challenge
to market, compared with other sites in the area.

She described the site as unattractive because it had a limited view, was
oddly shaped and impossible to sub-divide. She also said the two access
roads leading to it were not an advantage.

She compared it to its neighbouring development The Grangeford, which she
said had a regular shape, a full view of Orchard Road and a Grange Road
address.

Her testimony comes in the face of some of the arguments put up by minority
owners – those who did not agree to the en bloc sale.

It is the minorities’ case that the collective sale of Horizon Towers should
not be allowed because the deal was done in bad faith – as the sales
committee did not do its best to secure the highest possible price.

Still, the minorities’ case got support when former sales committee member
Henry Lim returned to the stand later yesterday. He had first testified last
Friday.

Yesterday, he said the sales committee received a higher offer than the $500
million from Hotel Properties (HPL) and its partners, which was eventually
accepted by the bulk of the owners.

Mr Lim said Hong Kong developer Vinyard Holdings, through its Malaysian
lawyers Chan & Shu, offered $510 million for Horizon Towers. He said he made
attempts to contact them but was advised by lawyer David Ang of Drew &
Napier not to pursue the offer as Chan & Shu was an ‘unknown name’.

Mr Limsaid last Friday that there were at least four offers comparable to or
better than HPL’s $500 million bid. He said three out of nine of the sales
committee members were happy with the HPL offer but rushed into the deal and
had failed to consult the majority owners before accepting it.

The hearing continues today.

Business Times: HPL director’s words were in contempt of court: owner’s lawyers November 12, 2007

November 10, 2007
HORIZON TOWERS HEARING
HPL director’s words were in contempt of court: owners’ lawyers
Christopher Lim’s comment could imply buyers going ahead with $1b
suit By MICHELLE QUAH

(SINGAPORE) 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’.