Wilmar eyeing some property projects after naming new COO

Perennial Real Estate CEO Pua Seck Guan was recently named COO of Wilmar
Perennial Real Estate CEO Pua Seck Guan was recently named COO of WilmarPHOTO: PERENNIAL REAL ESTATE HOLDINGS

Perennial Real Estate CEO's appointment to post will give commodity giant an advantage

At first glance, it looks an odd fit, but commodity giant Wilmar International believes appointing the boss of a property firm to run its operations will reap a double payoff.

As well as gaining a tried-and-tested businessman, Wilmar believes naming Perennial Real Estate chief executive Pua Seck Guan as its chief operating officer and an executive director will give it a way to take part in property development projects.

Wilmar chairman and chief executive Kuok Khoon Hong told The Straits Times yesterday: "Mr Pua has extensive leadership, management and entrepreneurial skills and experience in growing businesses in different markets.

"These qualities make him suitable to manage Wilmar's global operations. Experience in agribusiness is an advantage but not essential, as he can learn the business."

SUITABLE QUALITIES

We made Mr Pua the COO of Wilmar not for his property expertise but for his management skills and his ability to work with partners.

WILMAR CHAIRMAN AND CHIEF EXECUTIVE KUOK KHOON HONG, on choosing Perennial Real Estate chief executive Pua Seck Guan as Wilmar chief operating officer

He added: "In many places where Wilmar has significant operations, we have been offered attractive projects by the local government, which we declined as we do not have expertise in property development.

"With the association with Perennial through Mr Pua, these projects can be undertaken by Perennial, with Wilmar maybe taking a small stake. Successful development of these projects will enhance Wilmar's relationship with the government and standing of the company in those places."

Perennial has a portfolio of properties developed or managed in Singapore, China, Malaysia and Ghana.

Wilmar and Perennial are listed on the mainboard. Wilmar has an effective interest of about 13.1 per cent in Perennial, and Mr Kuok is the property firm's largest shareholder.

But Mr Kuok stressed that despite the potential synergy through property projects, Mr Pua was not appointed to help Wilmar build a real estate business.

"We made Mr Pua the COO of Wilmar not for his property expertise but for his management skills and his ability to work with partners. Property is unlikely to have anywhere close to the potential we have in agribusiness."

Mr Pua will have the support of senior managers at both Wilmar and Perennial to give him the capacity and resources for the dual roles, a Perennial spokesman added.

Dual executive roles are not common but market watchers say there should not be governance issues.

Gibson Dunn partner Robson Lee said: "It remains to be seen whether a person with dual roles will have the time and bandwidth for both companies. But such decisions will have gone through a lot of deliberation at respective boards and nominating committees."

Securities Investors Association Singapore chief executive David Gerald agreed: "Rather than thinking of potential problems, I would like to think of the synergies this arrangement brings on board. I would give credit to the wisdom of the two boards in selecting Mr Pua to the dual roles, and will await his performance in time to come."

A version of this article appeared in the print edition of The Straits Times on December 15, 2015, with the headline 'Wilmar eyeing some property projects after naming new COO'. Print Edition | Subscribe