Ho Hup seeks JV partners

05/09/2008 The  Star By B.K. Sidhu

It wants to develop 24.3ha of commercial land in Bukit Jalil

PETALING JAYA: Ho Hup Construction Co Bhd, which suspended its managing director a week ago, is looking for joint-venture partners to develop its 24.3ha of commercial land in Bukit Jalil. The project could potentially help the financially ailing company to turn around.

It is understood there are several offers from local and foreign companies, including some very big names. The new shareholders of Ho Hup are evaluating them to finalise a deal soon.

“It is important to get joint-venture partners to undertake the development as Ho Hup on its own is unable to do so because it faces a liquidity crunch,’’ a source said.

There is a plan for a mixed development which could cost several hundred million ringgit. The land, sited next to Bukit Jalil golf course, is said to be worth around RM300mil.

Ho Hup told Bursa Malaysia last Thursday that it had suspended managing director Datuk Low Tuck Choy until further notice for certain alleged breach, commission and omission of duties and responsibilities.

Ho Hup, founded by Tuck Choy’s late father Low Chee, is a PN17 company with liabilities of over RM100mil.

In its heyday, Ho Hup won most of the prized construction projects in the country. There are several reasons for its current state, over-expansion being a major one.

The winds of change are imminent at Ho Hup, the country’s oldest construction company that has lost its lustre. Extreme System has emerged as the major shareholder with 27.95% stake. The Low family owns 22.66%.

The company is now managed by an executive committee (exco) led by chairman Datuk Vincent Lye. The other four exco members are Tuck Choy, his younger brother Teik Kien, Lee Chong Hoe and Lai Moon Chan.

Extreme System bought a 17.2% stake from UEM World Bhd for just over 40 sen a share. The rest of the shares were bought on the open market. Extreme System is owned by Lye’s wife, Datin Viannie Damit. Lye is also a director of Minetech Resources Bhd, a quarry operator, and Magna Prima, a property developer.

Ho Hup’s board composition has also changed. It now includes Tan Sri Abdul Kadir Sheikh Fadzil (chairman), Lye, Tuck Choy, Teik Kien, Lee, Lai, Zainal Abidin Mohd Yusof and Mustapha Mohamed.

Ho Hup’s new team also wants to revive a link-house project in Bukit Jalil that has been abandoned for two years. It also has a 6.5ha residential land in Bukit Jalil that would be either developed or sold to raise funds for the firm, according to the source.

“It is a whole process to strengthen Ho Hup and aggressive steps are being taken to revive the company,’’ the source said. “The exco is looking into every financial and operational aspect to strengthen internal controls, address accountability issues and review processes.’’

Ho Hup, which has been reprimanded several times by Bursa for not submitting timely quarterly financial reports, had done so for both the 2008 first and second quarters since the new exco took charge.

The source said that showed the seriousness of the new team to get things done.

For the second quarter ended June 30, Ho Hup reported a wider net loss of RM9.4mil from a RM6.7mil loss a year earlier.