Simon Cheong speaks up again to oppose meeting to elect 2 directors
By Lee Su Shyan, Assistant Money Editor
HIGH-PROFILE property developer Simon Cheong has made his toughest comments yet in an escalating row over board membership at the Australian property developer he chairs, AVJennings. Hostilities are being traded between Mr Cheong and investment group Guinness Peat Group (Australia), or GPG, which has called for a shareholder meeting on Sept 14 to elect two directors.
Mr Cheong, whose SC Global Developments has a 42.3 per cent stake in AVJennings, has criticised the share performance of No. 2 shareholder GPG, which holds an 11.5 per cent stake in AVJennings.
GPG said earlier that Mr Cheong criticised GPG's share performance to divert attention from what it saw as the 'mediocre' performance of AVJennings.
In his latest comments, he told The Straits Times: 'I am very surprised that GPG got so agitated and used such strong language when we made reference to GPG's performance.
'Obviously, it's not so amusing when GPG gets a taste of their own medicine,' he said.
'We are very familiar with corporate agitators, and I think we are the wrong group to be picked on.'
He said GPG, or any other shareholder, could have waited for AVJennings' annual general meeting only two months away, where there would be another opportunity for new directors to be put to a vote.
Mr Cheong said AVJennings' management and board are having to divert precious time away from business to attend to an extraordinary general meeting (EGM).
He said: 'We don't take lightly any shareholder's request for an EGM.'
Calling for such a meeting is 'irresponsible', he said.
An EGM involves direct and indirect expenses for AVJennings, such as flying in directors, paying legal fees and printing circulars.
There are eight members on the board, including its chairman, Mr Cheong. Another two - GPG nominees Graeme Cureton and Jason Ters - will make 10.
The current board, however, is against the pair, saying their appointment would cause a conflict of interest, as both Mr Cureton and Mr Ters work for GPG.
GPG holds a majority stake in a home builder, Canberra Investment, a rival of AVJennings.
Mr Cheong has criticised GPG's share price for having dropped by about 15 per cent over the last year in contrast to the Australian benchmark index.
GPG counters that the compound growth in its net asset value has been 20 per cent a year since 1990.
In comparison, GPG argues, the share price of AVJennings is now 40 per cent below the high achieved in March 2004.
Observers reckon that the basis of GPG's grievance is that it bought into AVJennings in 2004, when the share price was at its peak. y
Mr Cheong says, however, that AVJennings has consistently been profitable and has been paying dividends under its current board and management.
SERIOUS BUSINESS'My message is: Don't take an extraordinary general meeting as entertainment. It is not a joke. It is not a circus. But let's work together and, if you give us a serious proposal, we will consider it and see how we can take the company forward.'
MR CHEONG, reacting to a move by AVJennings' No. 2 shareholder, Guinness Peat Group (Australia), to place two nominees on the property developer's board
'But let's work together and. if you give us a serious proposal, we will consider it and see how we can take the company forward.'
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