Property investment firm Lafe Corp will hold an extraordinary general meeting on Sept 19 to seek shareholder approval for the sale of the unsold units at its Emerald Hill development to a company insider.
And at least one shareholder is not happy about the planned move.
The 21 remaining units at Residences at Emerald Hill, a freehold condominium in Emerald Hill Road, are to be sold to Madam Yu Lo Si Rosy for $111.83 million, it said in a Sept 4 letter to shareholders.
Madam Yu, wife of Lafe Corp executive chairman Christopher Ho Wing-On, is deemed an "interested person". She also bought four units in the same development in June.
The deal, if approved and completed, means Madam Yu will hold the main assets and all the shares in Lafe (Emerald Hill) Development, a wholly owned Lafe Corp unit.
The move comes as the firm tries to avoid paying another round of hefty extension charges to the authorities under the Qualifying Certificate rules, which require foreign developers to sell all project units within two years of its Temporary Occupation Permit (TOP) date.
The 12-storey development had obtained its TOP in June 2011.
"Since the sales launch of the properties in February 2013 (at an initial launch price of between $2,230 per sq ft and $2,980 psf), the group has not been successful in selling any of the properties despite various marketing activities by the appointed marketing agents," said Lafe Corp in the letter.
It added that its attempts to sell the properties have been affected by the several rounds of cooling measures, which have dampened the property market and further reduced the pool of potential buyers.
Lafe Corp said that Madam Yu's offer price of about $1,780 psf beat other bids from unrelated third parties, the next highest of which came in at about $1,567 psf and $1,549 psf.
It was also higher than the market value of $102.9 million as at May 31, based on a valuation report.
Still, similar projects in the area are priced higher. A unit at adjacent 111 Emerald Hill, also a freehold condo, is at an average of $2,052 psf, Squarefoot Research data showed.
The proposed sale has drawn the ire of investor Elaine Khoo, a retiree in her mid-50s, who told The Straits Times the firm has few other assets that can generate as visible and as regular an income as the Emerald Hill development.
"It's also strange that Vigers - its property agency that is as big as PropNex Realty or ERA Realty here - managed to sell only one unit in the last three years, excluding those sold to the wife (of the company's chairman)," she said.
Madam Khoo noted that Lafe Corp's assets have been depleting over the years - "good assets turned into working capital probably for high director fees and expenses, resulting in ongoing losses for the company and its shareholders every year".
The firm's share price stood at $1.15 yesterday, down 10 cents or 8 per cent from Monday and a far cry from much higher levels years ago.