L&G’s RPT deal catches MSWG’s attention

KUALA LUMPUR (March 15): Land & General Bhd’s (L&G) related party transaction (RPT) proposal to take over five property firms from its major shareholder, Malaysia Land Properties Sdn Bhd (Mayland), for RM344 million cash has caught the Minority Shareholder Watchdog Group’s (MSWG) attention as questions remain over the deal.

In a forum organised yesterday by MSWG ahead of L&G’s extraordinary general meeting (EGM) to be held today, Rebecca Yap, the organisation’s head of corporate monitoring, said that the questions included the adoption of valuation comparisons based on transactions in 2013 and 2014 to arrive at the market value of the properties held by the five property firms.

She noted that L&G had in its response earlier to MSWG said that the reason for the valuer using sales transacted in 2013 and 2014 instead of more recent ones was due to the absence of transactions in 2015 and 2016.

Shareholders who attended the forum questioned the reliability of these valuations.

MSWG’s general manager, Lya Rahman, advised shareholders of L&G to exercise their rights by questioning the board on issues relating to the proposal that remain unclear during the EGM.

Under the proposal, L&G will take over the entire equity interest in four companies from Mayland, namely Primal Milestone Sdn Bhd (PMSB), Quantum Bonus Sdn Bhd (QBSB), Forward Esteem Sdn Bhd and Triumph Bliss Sdn Bhd. There is also the proposed call option for the acquisition of Soho Prestige Sdn Bhd.

PMSB and QBSB have existing shareholdings of 43% and 2% respectively, in Country Garden Properties Malaysia Sdn Bhd (CGPM), with the remaining 55% held by Country Garden Real Estate Sdn Bhd (CGRE), which is wholly-owned by China-based Country Garden Holdings Co Ltd.

CGPM is a joint venture between Mayland and CGRE.

The acquisitions will inject new property development projects and land bank into L&G, a move that is expected to cultivate earnings in the long term.

This article first appeared in The Edge Financial Daily, on March 15, 2017.

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