IOI Properties evaluates JV proposal by CEO for Shenton House amid conflict concerns

IOI Properties Group Bhd (IOIPG) has received a proposal today from its CEO and major shareholder, Lee Yeow Seng (LYS), regarding a potential joint development venture for Shenton House, a commercial property located at 3 Shenton Way, Singapore.

The proposal aims to address potential conflicts of interest due to LYS’s dual roles in both IOIPG and Shenton 101 Pte Ltd.

Shenton 101, owned by LYS, emerged as the sole bidder for Shenton House at the close of the collective sale tender on November 1, 2023, offering the reserve price of SGD 538 million.

LYS has informed IOIPG that his involvement in the redevelopment of Shenton House through Shenton 101 may conflict with IOIPG’s interests, given its own activities in property development and investment in Singapore.

The redevelopment project, slated to commence by the end of 2025 in Singapore’s central business district, intends to transform the 3,377-square-meter property, potentially increasing its gross plot ratio from 11.2 to 14 to create a premier commercial and mixed-use development.

The proposed acquisition price for shares in Shenton 101 will reflect the actual investment costs incurred by LYS and Shenton 101, encompassing the acquisition of Shenton House, consultants’ fees, application costs, and financing, with no personal gain intended for LYS.

LYS has assured IOIPG that Shenton 101 is prepared to proceed with the development under the tender terms and is actively securing funding.

He has proposed the venture to IOIPG to resolve potential conflicts of interest.

The proposal is classified as a related party transaction under Bursa Malaysia Securities Bhd’s Main Market Listing Requirements.

Both LYS and Datuk Lee Yeow Chor (DLYC), another major shareholder, will abstain from board deliberations and voting.

The IOIPG board, excluding LYS and DLYC, said it will review the proposal and consider other suitable alternatives to manage the potential conflict of interest.

It added that it will engage professional advisors for guidance and notify Bursa Securities promptly of any significant updates.

The proposal is initially valid for four months, with the possibility of a two-month extension upon mutual agreement.