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Lees say yes to Chew Gek Khim’s offer, but will OCBC?

A rare and intense corporate tug-of-war between two distinguished families has ended with one side throwing in the towel, but not without first squeezing the other side.

The Lees of OCBC fame yesterday retreated from the tussle for one of Singapore’s oldest firms - Straits Trading Company (STC) - by accepting the offer of $6.70 a share from the family of late banker Tan Chin Tuan.

When contacted, a spokesman for Tecity - an investment firm run by the Tans - said: “We welcome the Lees’ decision. It is a gesture of friendship.”

Two months ago, ties between the two families appeared less than friendly in public.

Both had been locked in a staring match since January, when Tecity - led by Ms Chew Gek Khim (picture), granddaughter of the late Dr Tan - first proposed $5.70 per share to take over STC.

The offer for the firm, which holds diverse assets such as properties in the prime Orchard area and a tin smelting business, breathed life into an otherwise illiquid stock.

The market’s excitement was fanned further when the Lees, holding a direct 7-per-cent stake, flexed their financial muscle - but their counter bid was just a few cents more.

Word on the street was that the Lees, whose patriarch is the late banker-philanthropist Lee Kong Chian, were trying to provoke Ms Chew to raise her offer.

She did so, twice, arriving at a total improvement of $1 or 17.5 per cent from the original price. But Ms Chew - who in 2006 publicly fell out with Lippo Group over boardroom manoeuvres in Robinson, the retailer her grandfather built up - also made it clear her third call would be the final one.

Yesterday, the Lees said “yes” and withdrew their offer of $6.55 for STC.

In their statement, the Lees said they arrived at that decision after “taking into account the foregoing as well as the current volatile market conditions”.

They also “noted” that it was “in response to” their two counter offers that total STC shareholder value has grown by about $326 million.

But for Ms Chew, the battle is not yet over.

Tecity’s offer, which expires on Thursday, is conditional upon its amassing at least 50 per cent of STC. Otherwise, the takeover plan fails.

With the Lees’ direct stake in the bag, Ms Chew will have 35.1 per cent, up from the latest figure of 28.1 per cent last Friday.

The swing vote is held by OCBC and Great Eastern Holdings, which hold a combined 26 per cent of STC and are substantially owned by the Lees.

Last month, OCBC said it did not intend to accept Ms Chew’s offer, saying the OCBC stable and the Lees could “jointly unlock value in Straits Trading”.

But with yesterday’s development, OCBC spokesperson Koh Ching Ching told Today: “We are reviewing the matter.”

Tecity has held STC shares since the 1950s and has said publicly that it plans to work with STC’s management and directors to “undertake a strategic and operational review” of the 121-year-old company.

Source : Today - 3 Mar 2008

The Circle Line will open from next year, starting with Stage Three, which links the Bishan station on the North-South Line to the Serangoon station on the North-East Line. Experts say this added accessibility will boost property values in the areas around each station. Which are some of the notable stations and residential developments to look out for now?

Steep price jump likely

Bartley Road

Current prices

AT THE end of last year, homes in the Bartley area averaged $543 per sq ft (psf) in price.

While there are too few projects in the area to allow an accurate comparison of average prices over time, those projects with more transactions showed steady price rises last year.

These include Casa Rosa at Lorong Ong Lye and Sun Rosier at How Sun Drive, which went up in price by 20 per cent to 30 per cent last year.

Potential growth

Home prices are likely to jump by up to 30 per cent after the completion of the Circle Line MRT Station in front of the Maris Stella schools, said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

He said this is one of the locations that will see the biggest rises in value as prices in the area are fairly low right now.

The construction around the area seems to be more extensive than usual, he noted.

‘I would expect a significant price jump once the station is operational. Residents will then reap the benefits after suffering years of disruption from the road works.’

New launches

A new 35-unit freehold project, Evania at Bartley Road, was recently launched right in front of the future station.

Prices start from more than $800,000 for a two-bedroom unit and go up to just above $1.1 million for a 3+1 bedroom unit. There is also a penthouse.

Richly valued haven

Lorong Chuan

Current prices

PRICES in the area around Lorong Chuan and Serangoon Avenue 3 climbed almost 50 per cent on average last year, according to data from Savills Singapore.

They are now about $710 per sq ft (psf), from $480 psf the year before. But prices vary hugely depending on the project’s age.

Chuan Park at Lorong Chuan, built in the mid-1980s, goes for about $600 psf. In contrast, The Chuan, a recent launch, has seen transactions go over $1,000 psf.

At Amaranda Gardens at Serangoon Avenue 3 and Goldenhill Park Condo at Mei Hwan Drive, both fairly new projects, units have sold for $743 to $914 psf since the year started.

Potential growth

The quiet residential area is popular with locals and expatriates alike, partly because of the schools there, which include Nanyang Junior College and St Gabriel’s Primary School.

Home prices, however, have already gone up significantly in the last 12 months, so not much upside is likely, said Savills’ Mr Ku Swee Yong. He expects a 10 to 15 per cent rise this year.

New launches

No future launches are known at this time. Apart from The Chuan, recent launches include two cluster housing projects, Dunsfold 18 and Milford Villas, which came on the market last year.

Dunsfold 18 bungalows sold for between $3 million and $3.6 million each.

The terrace houses at Milford Villas went for $1.2 million to $1.63 million each.

Moderate price increase

Marymount

Current prices

CONDOMINIUMS around the future Marymount MRT Station saw an average price increase of 35 per cent last year.

Prices rose from about $576 per sq ft (psf) to $777 psf last year, according todata from Savills Singapore.

Thomson 800 at Thomson Road is among the developments that command the highest prices in the area. Its most recent transactions, in October last year, went above $1,000 psf.

Elsewhere, at Seasons View in Pemimpin Drive and Lakeview Estate in Upper Thomson Road, homes are fetching less than $700 psf.

Potential growth

The spillover from nearby Bishan - as well as the cluster of office and industrial buildings near the new MRT station - could boost prices in the area by up to 15 per cent, said Savills.

The proximity to Raffles Junior College and Raffles Institution will further enhance property values near the station.

New launches

A new project is set to be built at Bishan Street 22, courtesy of Sim Lian Land, which bought the land last year from the Housing Board (HDB).

Last year, Sim Lian’s managing director, Mr Kuik Sing Beng, said he expected to launch a 600-unit development on the plot by this June.

He said it would be a 99-year leasehold, entry-level condo aimed at HDB upgraders. He estimated the homes could sell for between $700 and $750 psf.

Boost expected from Sports Hub

Mountbatten

Current prices

LOCATED near the former Kallang Stadium site and the interim campus for the School of the Arts, Mountbatten is an up-and-coming estate, but it has few condominiums.

Apartments at nearby Tanjong Rhu and Meyer Road, however, are going for between $1,000 and $1,500 per sq ft (psf) on average.

Potential growth

Property watchers said with so few private housing projects in the vicinity, it would be hard to track price growth around the station. Once the nearby Sports Hub is completed, however, property values around the area could rise by at least 10 per cent, they said.

New launches

A small project launched in the area last Saturday quietly sold more than 80 per cent of its 45 units within a week.

The freehold Cosmo, located 400m from the upcoming Mountbatten MRT Station, fetched average prices of $1,050 to $1,100 psf.

As at Friday, a few two-bedroom and duplex units were still available, priced at between $700,000 and $925,000.

Mr Melvin Poh, the managing director of Cosmo developer Fission Development, describes the area as ‘quite exciting’, as there are so many billion-dollar projects sprouting up nearby.

He expects home rentals in the area to hold steady, given its proximity to the city and a future MRT station.

Values to swing up on HDB turf

Dakota

Current prices

THE site for the upcoming Dakota MRT Station lies smack in the middle of an HDB estate, with few private homes immediately nearby.

The Government, though, may be trying to further develop private housing in the area, given the release of a plot at Dakota Crescent last year.

Few HDB resale transactions have taken place there in recent months. A single four-room flat sold for $440,000 last month.

Further down the Dunman Road/Tanjong Katong Road side, prices of private condominiums have shot up by some 40 per cent in the last year to an average of between $700 and $1,000 per sq ft (psf).

Potential growth

Home prices at Dakota are not expected to rise by that much, since they have already gone up a fair bit in the last year.

With a new station opening in the area, however, values could go up by at least 20 per cent, once construction is finished and the roads are cleaned up, said Savills Singapore’s Mr Ku Swee Yong.

The presence of many schools in the area, including Broadrick Secondary School and Chung Cheng High School, should also boost demand and rentals.

New launches

Boutique developer Ho Bee, which bought the government plot released last year, has a widely anticipated project coming up on the site.

The new units are likely to be launched at an average of $1,000 to $1,100 psf, Ho Bee said last year.

About 380 homes can be built on the 99-year leasehold site.

Source : Sunday Times - 2 Mar 2008

Recent CPF rule changes will help divorced women get their fair share from sale of matrimonial home.

DIVORCED couples have benefited from recent changes in Central Provident Fund (CPF) rules, which allow for a more ‘equitable’ distribution of their CPF monies when they divide their matrimonial assets.

Previously, divorced women often got very little from the sale of the matrimonial home. The changes, which came into effect on Oct1 last year, are an attempt to help them get more money and not face financial hardship.

One of the changes allows a member to transfer money from his or her CPF account into the CPF account of his or her former spouse.

For instance, under the old ruling, if $100,000 had been used out of a member’s CPF account to buy the matrimonial property , the $100,000 would have had to go back into his CPF account together with the accrued interest once the property was sold. This was the case even if the court had awarded his ex-spouse half the proceeds, or $50,000. The reason was that members were not allowed to withdraw their CPF money until the age of 55.

With the change, the court can order the transfer of $50,000 from the member’s CPF account into his ex- spouse’s account.

Another change allows for the immediate transfer of a piece of property to the former spouse.

In the past, when a member had used his CPF money to buy property and the court ordered ownership to be transferred to his ex-spouse, the member had to return the due amount to his CPF account.

In cases where a wife had no money to make the refund to her ex-husband’s account, the transfer could not take place. The court might then have to order a sale of the property , which might not be ideal in a weak property climate.

With the rule change, the member or his former spouse no longer needs to put back into his CPF account whatever money had been taken out for the property .

But should the former wife wish to sell the property later, she will be required to refund her own CPF monies withdrawn, as well as what her ex-husband had withdrawn.

So far, five divorce cases handled by law firm KhattarWong have benefited from the revised rulings. So too four handled by another law firm, Characterist.

Source : Sunday Times - 2 Mar 2008

Recent CPF changes allow for a more eqitable distribution of the matrimonial home and let the ex-wife keep a roof over her head.

DIVORCING couples come under even greater emotional strain when they try to sort out who gets what.

Last October, measures were put in place that tilt the balance towards divorced women who would otherwise get little from the sale of the matrimonial home - or could even lose the roof over their heads.

Under the revised Central Provident Fund (CPF) rules, retirement funds will be distributed more equitably when coupples split their matrimonial property .

In a nutshell, the changes allow CPF assets such as property or unit trusts, or sale proceeds from these assets, to be transferred immediately to the ex-spouse’s account.

Most Singaporeans use CPF monies to buy the matrimonial home. In some cases, the husband is more willing to transfer it to his former wife, says lawyer Amolat Singh of Amolat Singh & Partners, especially if she can show she’s entitled to a big share.

CPF rules

The old system

The property could not be transferred to the wife until and unless all the monies used by her ex-husband for the mortgage had been fully reimbursed into his CPF account, together with the accrued interest.

Often, the parties did not have the funds to do so, so they were left with no choice but to sell the flat.

This could place them in financial straits, especially if they’d paid a high price for the home. Also, the spouse with the kids would probably have to find alternative accommodation.

This was what happened to Madam Shirley Chong (not her real name), who downgraded to a three-room flat from a four-roomer. Her two kids had to move to a new school as well.

The court had ruled that the flat should go to her, but she did not have the money to make the reimbursement, so the transfer could not take place. The flat was sold and a charge placed on her ex-husband’s account.

He is not yet 55 years old and it remains to be seen whether she will get her money when he reaches that age, as a mandatory Minimum Sum has to be retained in his CPF account.

The new system

The property can be transferred immediately from one spouse to the other even if the funds have not been fully reimbursed into the CPF account.

A charge is placed on the account so as to secure the refund of the CPF monies in the event of a sale.

If the wife sells the property , she must make a reimbursement equivalent to the total amount of the CPF monies used by her ex-husband, into her own CPF account.

This ensures that there is no leakage of funds from the CPF system.

The refund is just postponed until there is a sale, and the refund or reimbursement is made into her own account.

Madam Chong would be far better off under the new rules as the court could order an immediate transfer of the flat to her with or without a reimbursement.

Here are three real-life cases where divorced couples have benefited from the new rules.

Couples who have benefited

Case 1

MARRIED for six years, Mr and Mrs Victor Lee (not their real names) bought a three-room HDB flat now worth $200,000 on the resale market. He owed her $9,000 for maintenance in arrears.

Finally, they divided the flat in such a way that she took over his share by paying $60,000 into his CPF account. This represented the CPF monies he had withdrawn to buy the flat, plus accrued interest, less the debt of $9,000.

Said Ms Lie Chin Chin, the managing director of law firm Characterist: ‘Without the revised ruling, the $9,000 would have remained an outstanding debt. This ruling permits a partial refund of CPF monies into the ex-husband’s account, so Mrs Lee managed to offset the debt with the sum that was supposed to be refunded into his CPF account.’

When she sells the flat, however, she is required to refund any CPF monies she used for the property , plus the sum of $9,000, into her CPF account.

Case 2

AFTER 10 years of marriage, Mr and Mrs David Lim (not their real names) called it quits. At the point of divorce, she had no income and was thus unable to secure a housing loan. She had custody of a child and they needed a roof over their heads.

The Lims agreed that he would transfer his share in their five-room flat worth $400,000 to her without making any refunds into his CPF account. She managed to take over the flat in her sole name and continued living there with her child.

Without the revised CPF ruling, the division of the matrimonial flat could have posed a financial burden. The flat would have had to be sold or she would have had to take it over.

If the flat had been sold, most of the proceeds would have been refunded into his CPF account. There would have been little cash left over to be distributed. She would not have had the funds to buy another flat.

If she had taken over the flat, she would have had to get a loan so she could refund the monies into his CPF account. But she had no income, so her chances of getting a loan would have been practically non-existent.

Case 3

WHEN Mr and Mrs Joseph Ang (not their real names) bought their matrimonial home for $550,000 more than 10 years ago, they put in equal contributions using CPF monies.

The property is now worth $1.8 million. She paid for the renovation costs of $450,000.

They agreed to divide the house 80:20 in her favour. This meant he should receive $360,000.

But the sum due to be refunded into his CPF account was about $420,000 as the refund had to include the accrued interest on the CPF monies used. They agreed that she would take over his share by paying only $360,000 into his account.

Court order needed

Lawyers point out that the new CPF rules do not automatically apply in all divorce cases. A court order must first be made.

The onus is on the court to explicitly state that one spouse can transfer his or her share of the property to the other without having to refund the monies used. Only then can the transfer take place.

If the court does not make such an order, and it is purely the couple’s decision to buy over each other’s share of the property , the old rules still apply. The transaction must be done at fair market value and the monies must go back to the respective CPF accounts.

Dividing the assets

IN DECIDING who gets what, the law requires any division of matrimonial assets to be just and equitable.

Courts weigh certain factors when determining how assets should be split.

Matrimonial home

Contribution of each spouse: The starting point is the financial contribution that each party has made to initial payments and monthly mortgage payments.

Any payments made through the Central Provident Fund are also taken into account, said lawyer Amolat Singh.

Non-financial contributions: The court looks at who paid for the renovations; who bought the furniture, fittings or furnishings; who settled the monthly maintenance charges; and who paid the utility bills.

Also covered are expenses incurred for the welfare of the family and while looking after children or an aged or disabled family member.

Other assets

Efforts and contributions made by each party towards their acquisition: For example, for a business, the party making a claim must prove he or she has contributed to its success. One way is to show he or she has been involved in its administration or operations.

The court might not divide up these assets in the same proportion that it would the matrimonial home. For instance, the home might be split 50:50, but not the other assets.

Other factors: The court will consider the length of the marriage, the age and health of each spouse, and the couple’s standard of living during the marriage.

Source : Sunday Times - 2 Mar 2008

Q I AM from Malaysia. My grandfather, a Malaysian, died six years ago.

According to his self-made will, his properties were to be distributed among his six sons. His eight daughters were not given a share in the will.

My grandfather signed this self-made will and so did his six sons. There were no signatures from the daughters.

However, immediately after my grandfather died, one of his sons, who is my third uncle, declared that he did not agree with the will. Because of his refusal to accept the will, all my grandfather’s properties are at the moment still under my grandfather’s name.

My third uncle is the one who manages the plantation and the company. He took all the income and did not distribute any to the shareholders.

My father was older than my third uncle and could have challenged my uncle, but unfortunately, he died in June last year.

According to my father’s will, which has been certified by a lawyer, I am the executor.

I want to get back what belongs to my sister, my brother and myself, and I have approached my third uncle. But he told me that, as his nephew, I have no right to ask for anything.

I personally feel that the only way to retrieve what is rightfully ours is to make my grandfather’s self-made will valid in the eyes of Malaysian law. But I have only a photocopy of the will and it was written in Chinese.

In your opinion, is the will of any use in the eyes of the law? Is there a solution to my problem?

A I MIGHT not be able to help very much. As your grandfather and father were Malaysians, Malaysian law would apply.

My advice as follows is based on Singapore law as I am not conversant with Malaysian law. You may wish to seek the advice of a Malaysian lawyer.

There are many dangers in relying on a self-made will. In this instance, it is not clear, based on what you have said, whether the will was properly executed and witnessed.

Also, when the six sons put their signatures on the will, it is not clear in what capacity they did so. Were they witnesses to the will? If so, the gift to them under the will is void as they were also the named beneficiaries under the will.

Under the Wills Act, a beneficiary of a will cannot also be a witness to it; the same applies to his or her spouse. Otherwise, the gift to that person under the will is utterly null and void. If the will includes other gifts and an appointment of executors, it is still valid where these are concerned.

In your grandfather’s case, if the will is void with regard to the gifts to the six sons, you will need to see whether there are other gifts stated in the will. For example, if your grandfather left the residuary estate to all his children, then all his sons and daughters would get a share.

If nothing else is said in the will, intestacy laws would apply. Under Singapore law, when a widower dies (assuming your grandmother died before your grandfather), all his assets will be divided among all his children. In this case, this would include the six sons and eight daughters. You and your siblings would inherit your father’s portion of your grandfather’s estate.

You might wish to get one or more of the other uncles or aunts to apply for letters of representation from the Malaysian court.

You might apply - as executor for your father’s estate - together with them.

You would need to produce the original will to the court when applying for the letters of representation. You would need to get a translation as well.

After the letters of representation have been extracted from the court, the personal representatives can request that your third uncle give an account of the income earned and expenses incurred by your grandfather’s estate during the time your uncle managed the assets.

Ang Kim Lan Goodwins Law Corporation

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 2 Mar 2008