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Wednesday, June 13, 2012

Ho Hup to carry on

KUALA LUMPUR: Ho Hup Construction Company Bhd is committed to growing its other businesses, even if the Federal Court does not rule in its favour in a much-awaited hearing that will determine whether it gets full ownership of a prized 60-acre freehold land in Bukit Jalil.

“The company must continue. Whatever the Federal Court's decision, there must be other contingencies,” executive director Derek Wong said after its AGM.

Wong: ‘The company must continue.’

“If the Federal Court ruling is not in our favour, the board will look at other avenues to regularise our position. We have been actively doing that since the Court of Appeal reversed the decision.

“The board has taken the position that we cannot just depend on the 60 acres to regularise.”

To recap, Ho Hup had in 2010 filed a suit to declare null and void a joint development agreement (JDA) between its 70%-owned subsidiary Bukit Jalil Development Sdn Bhd and Pioneer Haven Sdn Bhd, a unit of Datuk Desmond Lim's Malton Bhd.

The agreement was signed by Ho Hup's previous board led by Datuk Vincent Lye, a day before they were ousted in an EGM in March 2010.

Under the JDA, Ho Hup is the landowner while Pioneer Haven would be the developer.

Ho Hup is entitled to 17% of the total gross development value of RM2.5bil, or RM425mil, and stands to receive a minimum guaranteed entitlement of RM265mil.

But the company has maintained that it wanted full control of the development rights as that was a vital component to its regularisation.

The High Court's decision last June had favoured Ho Hup, but it was overturned by the Court of Appeal in December.

Subsequently, the Federal Court on May 17 granted it leave to appeal in what is seen as its last avenue to obtain the full development rights.

Ho Hup, whose financial difficulties have rendered it a Practice Note 17 company, will also apply to Bursa Malaysia for an extension of time beyond the June 30 deadline to submit its proposed revised regularisation plan.

Wong said he hoped the case was strong enough for it to be granted an extension at least until the Federal Court made its verdict.

“We want finality in the case, whether we win or lose. Then we can put the right (regularisation) plan in.”

Meanwhile, he said the company would focus on expanding its ready-mix concrete operations and reviving its once-thriving construction arm.

He said Ho Hup was in the midst of bidding for a few medium-size Economic Transformation Programme-related construction jobs, but he could not disclose their value.

In its prime, the firm's turnover from construction was about half a billion ringgit, and it was involved in large scale projects such as the North-South Expressway, parts of the Twin Towers and the Bukit Jalil stadium.

Asked whether the company possessed sufficient working capital to take on more construction jobs, he said: “We have the support of shareholders. If we win contracts, we are able to ringfence these projects and get finance institutions to look at them from a project finance basis.”

He added that the company was looking at developing properties in the Klang Valley and Johor on a joint-venture basis.

On the buyout of Zen Courts Sdn Bhd's 30% stake in Bukit Jalil Development, he said Ho Hup would appoint an independent valuer either this or next week to ascertain the value of the former's equity.

The High Court had on March 27 ordered that Ho Hup buy Zen Courts' shares in Bukit Jalil Development on a price to be determined by the latter's net tangible asset as at March 27, which needs to be valued by a mutually agreed independent valuer between Ho Hup and Zen Courts.

By The Star

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