SINGAPORE – Shares of Hotel Properties Limited (HPL) tumbled on Friday, hit by news that its managing director, co-founder and controlling shareholder, Mr Ong Beng Seng, had been issued a notice of arrest by the Corrupt Practices Investigation Bureau (CPIB).

The shares opened at $3.60, down 7 per cent, and rebounded to $3.78 before closing at $3.76, a fall of 10 cents or 2.6 per cent for the day.

HPL said in a filing to the Singapore Exchange (SGX) at 7.30am on Friday that Mr Ong is helping CPIB with its investigation in relation to his interactions with Transport Minister S. Iswaran. No charges have been filed against Mr Ong, who is out on bail of $100,000.

Mr Ong, 77, will be travelling from Friday and will surrender his passport to CPIB upon his return to Singapore.

Mr Iswaran has been told by Prime Minister Lee Hsien Loong to take leave of absence until the investigations are completed.

“It’s a knee-jerk reaction to the notice of arrest for Mr Ong,” said a stockbroker, referring to the fall in HPL’s share price.

This is not Mr Ong’s first brush with controversy involving politicians.

In 1995, founding prime minister Lee Kuan Yew’s wife agreed to buy a condominium unit from HPL at Nassim Jade, and another unit at Scotts 28 in Scotts Road.

Then Deputy Prime Minister Lee Hsien Loong also bought one unit each in the two HPL developments.

A year later, the two men disclosed that the units were purchased at unsolicited discounts of between 5 per cent and 12 per cent. They were subsequently cleared of any suspicion by then Prime Minister Goh Chok Tong and the discounted sums were donated to charity.

The disclosures came shortly after SGX criticised HPL for its “tardiness” in announcing the discounted sale of two other Nassim Jade units to Dr Lee Suan Yew, the late Mr Lee Kuan Yew’s brother, and to another HPL director.

As managing director, Mr Ong is responsible for all aspects of strategic planning and business development activities of HPL group. He also has a total interest of 60.47 per cent in HPL as at June.

HPL led consortium Cuscaden Peak, which included Temasek units CLA and Mapletree, to acquire the real estate assets of Singapore Press Holdings in May 2022.

But its core business is a portfolio of 38 hotels and resorts across 15 countries, namely Singapore, Malaysia, Thailand, Indonesia, Maldives, Seychelles, Vanuatu, the United States, Bhutan, Tanzania, South Africa, Vietnam, Britain, Italy and Sri Lanka.

HPL has interests in hotels under prestigious hospitality brands such as Four Seasons Hotels and Resorts, Como Hotels and Resorts, InterContinental Hotels, Six Senses Hotels and Resorts, and Marriott International.

In addition, the group also manages its own portfolio of hotels under brands such as Hard Rock Hotels and Concorde Hotels & Resorts.

In Singapore, its luxury residential developments include Tomlinson Heights, Robertson Blue, Cuscaden Residences and Four Seasons Park, as well as projects through joint ventures with CapitaLand – The Interlace and d’Leedon condominiums.

The group also owns commercial and retail properties such as Forum The Shopping Mall and Concorde Shopping Mall.

In London, it boasts four joint-venture freehold developments, namely Burlington Gate, Holland Park Villas, Paddington Square and Bankside Yards.

HPL also runs Hard Rock Cafe outlets in South-east Asian countries, including Singapore, Malaysia, Indonesia and Thailand.

In 1975, Mr Ong joined his father-in-law, Mr Peter Fu, in Kuo International as an oil trader. The move thrust him into hotel and property development.

In 1980, Hotel Properties was formed as a private limited company to purchase the Hilton hotel for $72 million.

In 1982, the company was listed on SGX’s mainboard.

HPL has been among the neglected property counters, occasionally getting a new lease of life due to the wave of privatisations and takeover attempts.

Speculation has swirled for two decades that HPL could undertake a mega development involving its prime Orchard Road assets around Forum The Shopping Mall, the voco Orchard Singapore hotel and HPL House.

The three “jewels” sit on an estimated 150,000 sq ft of freehold land on a prime corner of Orchard Road and Cuscaden Road.

In June, it was reported that the group submitted a development proposal related to the three properties in its treasure chest to the Urban Redevelopment Authority.

DBS analysts, who have a “buy” call on HPL and a target price of $4.35, said the assets could yield a potential mixed-used development totalling about 700,000 sq ft. HPL’s land parcels could fit under the URA’s Strategic Development Incentive Scheme, which allows owners higher plot ratios and flexibility on land use and height.

HPL also owns a 30 per cent stake in Cuscaden Peak, which owns Paragon Mall and a stake in a $1 billion data centre in Genting Lane.

Mr Ong is no stranger to takeovers, but he is usually the hunter.

Some years ago, HPL and Cycle & Carriage wrested control of Malayan Credit (renamed MCL Land) from Malaysia’s Teo family.

In 2014, a private consortium headed by Mr Ong offered to take over HPL, a move that could have led to it being delisted.