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HORIZON TOWERS HEARING – ‘Penthouses cost $20m, $30m…where am I to go?’

Apportionment method is unfair, argue some penthouse owners

(SINGAPORE) The minority owners of Horizon Towers who are objecting to the en bloc sale of the development took the stand for the first time yesterday, putting forth their reasons as to why the collective sale should not go through.

Arguments on how the penthouse owners would be penalised by the apportionment method – and how the price they would receive would not get them similarly sized units in the same area – were just some of those presented to the Strata Titles Board (STB) tribunal.

Ng Eng Ghee, a penthouse owner who is objecting to the en bloc sale, pointed out that the apportionment of the proceeds was unfair to owners such as himself.

The apportionment method used by Horizon Towers will assign proceeds to units according to an equal mixture of land area and share value. But Mr Ng pointed out that the share value assigned to a penthouse is only seven, compared to a share value of five for the smaller units, even though his penthouse is almost double the size of the smaller apartments.

This would result in him getting a much lower price for his unit, on a per-square-foot basis, than the smaller units.

But Senior Counsel Chelva Rajah – who represents the majority owners – pointed out that Mr Ng also contributes to the maintenance of the condominium according to his share value.

Mr Ng then lamented that the $3.8 million that he would get for his over-5,000 sq ft penthouse would not enable him to buy another comparable unit in the Orchard Road area. He said in his affidavit that he has not seen another penthouse that would suit him and his family of five people and two large dogs more than his Horizon Towers unit, which even has a private rooftop pool.

“Penthouses in the area cost $20 million, $30 million, $15 million. I saved for all this time, so that I could retire at this point. Now, where am I going to go?’ he said.

The apportionment method used by Horizon Towers was also objected to by Ong Sioe Hong, the sister of Metro Holdings group managing director Jopie Ong.

She also expressed her displeasure with some of the sales committee members who bought extra units in the development at the time the committee was formed to explore the potential of an en bloc sale. She felt that this gave them a different ‘tolerance of pain’ as these extra units were investments to them, rather than homes.

But Mr Rajah then asked her whether, if the sales committee members had bought extra units for the purposes of making money in an en bloc sale, they would not then wish to get as high a price for Horizon Towers as possible.

Ms Ong said that she felt that their agenda was different.

It is the minorities’ case that the en bloc sale of Horizon Towers to Hotel Properties Ltd (HPL) and its partners was done in bad faith, as the sales committee had not followed due process in conducting the sale, such as by seeking out other more attractive offers for the development. Harry Elias Partnership, which represents one group of minorities, called the collective sale ‘a comedy of errors’.

The high-profile hearing is expected to end today, after which the STB tribunal will deliberate on whether to grant a collective sale order to Horizon Towers. But even this decision will not necessarily spell the end of this saga.

For one thing, the tribunal needs to grant the order before the sale completion deadline of Dec 11. Even if it does, the minorities can still appeal against that decision. And if the tribunal decides not to grant an order, there is the possibility that HPL will proceed with the lawsuit it has filed against the majority owners for breach of the sale and purchase agreement.

 

Source: Business Times 15 Nov 07

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