Money, Poker And Reputation At Play

Source : Weekend Today, 11 Aug 2007

Why would a low-profile, public-listed company helmed by a man who avoids the public radar like the plague join an international consortium and initiate a talk-of-the-town legal spat with 173 residents over 204,742 square feet of prime residential land?

Money, man, money. There are big bucks (anywhere between $800 million and $1 billion) that might slip away if the Horizon Towers en bloc sales agreement lapses because of a rejection by the Strata Titles Board — and that, too, on a technicality.

Reputation, man, reputation. Bringing in two international brand-name partners — Qatar Investment Authority and Morgan Stanley Real Estate — to develop that Leonie Hill property must have been a dream come true for Hotel Properties Ltd (HPL) and its managing director, Mr Ong Beng Seng.

Why allow that brand association to be scuttled by a bunch of unhappy owners?

And, finally … poker, man, poker. HPL and its partners have that all-important joker to throw with relish in their talks with the sellers or convince the judge in the worst-case scenario that the legal suit goes to court.

That trump card is hidden in the strata board’s official reason for throwing out the en bloc deal: Technical grounds.

A source familiar with en bloc sales said the technical hitch revolves around some of the names of the sellers in the sales purchase agreement.

The attention to detail in preparing such documents has been overshadowed by the frenzy in clinching lucrative deals, he said.

“A seasoned developer would have gone through details like the names of sellers with a fine toothcomb, although it is not the developer’s duty to do so.

“It’s all about the old-school ideal of wanting a water-tight deal so that a sour aftertaste can be avoided.”

With the sellers staring at the prospect of a protracted legal fight and a huge loss of about $5 million each, how can this messy affair be resolved?

The sellers can be persuaded to go back to the strata board for another shot at approval with the technical anomalies sorted out. That opportunity will come in two weeks when they vote on whether the deadline for the failed sale should be extended. And the buyers can be magnanimous enough to shake hands on a new money deal.

Even if it does end amicably, the wounds will take a long time to heal. The unhappiness with not getting more money, the fear of a legal tussle with a giant group and the finger-pointing among residents will continue.

Unless two home truths sink in: Don’t look back once you have sold your property, even if the price goes up after the deal has been done. And don’t treat your property as a house, treat it as a home.

In a land where asset enhancement and upgrading are uttered freely, the Horizon Towers episode shows what can happen when frenzy overtakes reason, when making money overwhelms values and when the home is treated as a lottery.

A sobering thought as we celebrate 42 years of independence.