Still showing at Capitol: A deadlock

The court rejected the winding-up applications because the other partner in the joint venture says an exit mechanism exists for both.
The court rejected the winding-up applications because the other partner in the joint venture says an exit mechanism exists for both.ST PHOTO: KUA CHEE SIONG

Court dismisses winding-up bids by one of the JV partners

A court ruling yesterday has left an impasse between joint owners of iconic heritage property Capitol Singapore no closer to resolution.

Perennial Real Estate Holdings filed applications last year to wind up three associated firms holding the assets of mixed-use project Capitol Singapore in Stamford Road.

The High Court dismissed the applications yesterday.

There is one month to appeal.

Perennial said it "will review the court's judgment and explore all available options, including an appeal, before deciding on the next course of action".

It previously told the Singapore Exchange that the shareholders and management of the Capitol entities were "in deadlock", unable to agree on some key issues over the project last year.

Perennial - led by real estate veteran Pua Seck Guan and backed by business magnate Kuok Khoon Hong and Mr Ron Sim of Osim International - owns an effective 50 per cent of each of the three associates.

The other 50 per cent is held by Chesham Properties, an affiliate of private luxury developer Pontiac Land Group, owner of the Ritz-Carlton and Conrad Centennial hotels, and held by the Kwee family.

Senior Counsel Davinder Singh and lawyer Pardeep Singh of Drew & Napier represented Chesham.

The development has three conservation buildings: Capitol Theatre, Capitol Building and Stamford House.

Perennial also said last year that it was willing to buy Chesham's 50 per cent stake or sell its stake to Chesham. It is also open to having all shares sold to a third party.

The firm had also noted that the winding-up applications would serve to "protect and preserve" Capitol Singapore's assets until the High Court determined the processes.

Judicial Commissioner Kannan Ramesh accepted Chesham's argument that it would not be just and equitable to wind up the firms. There is an exit mechanism available to Perennial under the constitution of the firms which provides for one party to offer to sell its shares to the other at a fair value.

In 2010, the firms behind Capitol Singapore had come together after winning the bid. The idea was to restore the buildings to their former glory, turning the development into a landmark and injecting new vibrancy into the City Hall area.

The Capitol Building houses shops, restaurant and a part of it - together with Stamford House - is home to upcoming luxury hotel The Patina Capitol. The hotel has yet to open, even after being slated to be ready in the third quarter of 2015.

Chesham told The Straits Times it hopes that Perennial will take the same view as the court's judgment and abide by the joint venture's constitution. It added that it remains committed to a long-term interest in the development.

The mall has been quiet, with the exception of Naughty Nuri's Singapore, an offshoot of Naughty Nuri's Warung And Grill in Ubud, Bali.

A version of this article appeared in the print edition of The Straits Times on March 04, 2017, with the headline 'Still showing at Capitol: A deadlock'. Print Edition | Subscribe