Minority owners say process to sell en bloc too fast; no chance to air views
'LESS STRINGENT': Minority owners of Katong Mall are upset that the collective sale process was conducted under the old rules and not the stricter ones due to kick in next month. -- ST PHOTO: FRANCIS ONG
KATONG Mall is up for a collective sale but angry minority owners claim they have been left out of the process.
More than 35 disgruntled owners said the sale agreement was drawn up so fast that they did not get a chance to air their views.
They are also upset that the sale process was conducted under the old rules and not the stricter ones due to kick in next month.
Owner Jeannette Aruldoss, 44, a lawyer, told The Straits Times that the process was 'done too quickly. We welcome the idea of the sale, but we want it done by the new rules'.
The revised law requires sale committee members to be elected at a general meeting and allows a five-day cooling off period for owners after signing a sale deal.
Three firms own 72 per cent of the 258-unit mall at the junction of East Coast and Joo Chiat Roads - Elysium, a holding company, and property developers Nustavino and Habitat Properties. The three have common investors. The rest of the mall is divided among about 100 owners.
The majority owners backed a sale and needed only a further 8 per cent for the required 80 per cent. This was confirmed on Wednesday.
The first time minority owners heard of a sale initiative was in a July 6 letter from property firm Jones Lang LaSalle (JLL) stating that five owners, holding about 74 per cent of the shares, had already volunteered for a sale committee.
At an Aug 6 meeting to discuss the sale, JLL said a process for collecting signatures would start the next day.
Minority owners met JLL on Sept 6 to express their concerns and to set up a meeting with the sale committee.
They did not hear from JLL until Sept 11, when it told them that the required 80 per cent level had been reached.
They were unconvinced and tried repeatedly to arrange a meeting with the sale committee - personally and through JLL - but to no avail.
JLL marketing agent Stella Hoh told The Straits Times yesterday that she did tell minority owners on Sept 11 that they had achieved the 80 per cent 'subject to lawyer's verification of signatures'.
Confirmation came only on Wednesday.
Owner Lim Earn San, 60, said he was shocked at the speed of the sale, adding that the minority owners were not given any room for negotiations over the terms of the sale agreement.
The appointment of the marketing agent and lawyers was also done by the majority owners without consulting the minority owners, he said.
Mr Lim, who also owns a unit at Katong Shopping Centre, said the approach to the sale of the two malls, 'couldn't be more different'.
Owners at Katong Shopping Centre are following the new rules, having known of the changes since March, he said, adding: 'Why can't Katong Mall do the same?'
Some minority owners also fear a conflict of interest as two majority owners are in the property industry. But Ms Hoh said JLL had told the owners that the sale will be done by public tender and that any interested buyers related to the collective sale agreement 'are required by law to declare their interests'.
Three sale committee members declined to comment.
The 99-year leasehold mall has a plot ratio of 3.6 and a site area of 78,158 sq ft. An independent expert estimated its sale price to be between $600 per sq ft (psf) and $650 psf, valuing the mall at about $175 million.
JLL figures show that units have sold at a range of $300 psf to $800 psf this year.
All eyes are now on its upcoming sale launch. 'We'll see how it goes, but if we're not convinced the sale was done in good faith, we'll take our concerns to the Strata Titles Board,' said minority owner Robert Ong.
VALUE ESTIMATE
The 99-year leasehold mall has a plot ratio of 3.6 and a site area of 78,158 sq ft. Its sale price is estimated to be between $600 per sq ft (psf) and $650 psf, valuing the mall at about $175 million.
Looking back
KATONG Mall is a building with a beleaguered past.
Built in 1983, the former Katong People's Complex was known as the 'prison with pipes' due to its exterior of gigantic pipes and steel structures.
The surburban mall struggled initially with poor traffic and flagging businesses and in 1994, a woman, Madam Mona Koh, was shot there by an unknown gunman. She became paralysed after the incident.
A year later, the complex underwent a $12 million revamp and became Katong Mall.
Its flamboyant developer was Mr Ho Kok Cheong - who was also behind People's Park Complex.
He was declared bankrupt in the 1990s and was infamously involved in a massive corporate fraud in 2005.
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