HPL shares rebound as lawyers for Ong Beng Seng ask for fine, no jail time
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Property tycoon Ong Beng Seng arriving at the State Courts on Aug 4. His sentencing, set for Aug 15, may have repercussions for Hotel Properties Limited, which he founded and still controls.
ST PHOTO: SHINTARO TAY
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SINGAPORE – Shares of Ong Beng Seng’s Hotel Properties Limited (HPL) rebounded from early losses on Aug 4 with the prosecution saying it did not object to the convicted property tycoon being fined instead of imprisoned due to his severe medical condition.
Ong had earlier in court pleaded guilty
His sentencing is set for Aug 15. Its outcome may have repercussions for the hotel and property company that Ong founded and still controls.
HPL opened down 0.2 per cent, before tumbling as much as 1.3 per cent to $5.39 at 9.46am. The shares then began to reverse course until closing up four cents or 0.7 per cent at $5.50.
Some 150,000 shares changed hands, about twice the average daily trading volume for the stock, which is usually thinly traded as it is tightly held.
At the court hearing on Aug 4, Ong’s defence lawyers said he suffers from multiple myeloma, a type of incurable blood cancer, and that he is seriously immunocompromised.
The defence asked the judge to take into consideration Ong’s medical condition in sentencing and his early guilty plea, arguing for a fine and no days in jail.
The prosecution said it accepts that the exercise of judicial mercy is warranted in Ong’s case and does not object to the maximum fine for him instead of imprisonment.
Malaysian-born Ong, 79, stepped down as HPL’s managing director in April “to devote more time to manage his medical conditions”, after leading the property company for 45 years. But he continues to provide “strategic oversight and direction” to the mainboard-listed firm.
Since news of his exit on April 14, HPL shares have surged more than 50 per cent.
Ong and his wife Christina control about 60 per cent of HPL, according to the company’s latest annual report released on April 14.
HPL has interests in more than 40 hotels across the globe, including the Four Seasons in Singapore and resorts in the Maldives. Its other famous hotel brands include Como Hotels & Resorts, Concorde Hotels, Hard Rock Hotels and Marriott International.
HPL also owns a string of Orchard Road properties in Singapore, such as Forum The Shopping Mall, voco Orchard Singapore, HPL House and Concorde Hotel and Shopping Mall.
Media reports last week said HPL is in talks to sell majority stakes in Forum The Shopping Mall and voco Orchard hotel. This is after it secured approval in 2023 to redevelop the two properties, along with HPL House, into a mixed-use development, which would be part of a government plan to rejuvenate Singapore’s prime shopping district.
HPL swung back into the black in the second half-year ended Dec 31, with a net profit of $32.1 million. This reversed a net loss of $4.9 million in the first half-year.
DBS Bank analysts said the recent news that HPL is looking for partners to co-develop its Orchard Road properties is “very interesting and a win-win situation”. The move “will not be a drag on the financials and brings new expertise and perspective for the group to move forward with this value-unlocking strategy”, they said.
DBS estimates HPL’s revalued net asset value at $7, or $10 on a fully developed basis.
“We think that HPL’s fair value is in that range, depending on the price that the group can achieve with a partial divestment of the stake in voco and Forum house,” the analysts said.
