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Business Times – 15 Nov 2007

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

Apportionment method is unfair, argue some penthouse owners

By MICHELLE QUAH

(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.

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
the saga.