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Friday, March 26, 2010

Tong sees potential in Ho Hup’s property arm

KUALA LUMPUR: Tan Sri Tong Yoke Kim, who recently emerged as a substantial shareholder in financially troubled Ho Hup Construction Co Bhd, sees potential in the company’s property arm.

Tan Sri Tong Yoke Kim ... ‘I’m coming in as a private investor only.’

Ho Hup, which saw a months-long tussle between Datuk Low Tuck Choy and Datuk Vincent Lye end in the ouster of the latter and the board headed by him in an EGM on March 17, is a Practice Note 17 (PN17) company.

“I’m coming in as a private investor only and don’t personally know anybody in the management or the major shareholders,” Tong told StarBiz over the phone yesterday.

Tong, together with son Datuk Andrew Tong Ho San, also own a 19.27% stake in another construction firm, Bina Puri Holdings Bhd, through investment vehicle Bumimaju Mawar Sdn Bhd.

According to a filing with Bursa Malaysia on Tuesday, the elder Tong had acquired 7.42 million shares, or a 7.28% stake, in an off-market deal on March 10, a week before the EGM that saw Lye and his board ousted.

Low and his family own 27.23% of Ho Hup, which was founded by his father, the late Low Chee. Lye has a 27.95% stake in the construction firm.

The March 17 EGM was requisitioned by Low, also a former managing director of the company, and another shareholder after disagreeing with the previous board led by Lye on the way forward for the company.

Tong added that despite being a PN17 company, there was still some value in Ho Hup, which primarily lay with the property arm.

Ho Hup recently signed a joint-venture agreement with Malton Bhd to develop 60 acres of freehold land the company owns in Bukit Jalil, Kuala Lumpur, into a mixed project comprising commercial and residential properties.

Based on recent filings with Bursa Malaysia, Ho Hup is entitled to RM265mil from a potential RM2.5bil in gross development value from the project over a 10-year period from the approval date of the development.

Tong said the investment in Ho Hup had nothing to do with his other holdings, in particular with that of Bina Puri. “This is separate from my other investments, including in Bina Puri,” he said.

Meanwhile, Ho Hup director Hew Thin Chay said the board had no knowledge of the change in shareholding except from what was reported.

He said the company would make an announcement soon on the appointment of an advisor for the regularisation plan. Both AmInvestment Bank Bhd and Newfields Advisors Sdn Bhd had resigned from their positions as joint advisors last Friday.

“We will likely ask for an extension of time of up to six months from Bursa for the submission of a regularisation plan,” Hew said.

The deadline had been extended to April 4 in an earlier announcement.

By The Star (by Fintan Ng)

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