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Star Media Group managing director and chief executive officer Datuk Seri Wong Chun Wai (right) presenting a souvenir to Liew. With them is specialist editor M. Shanmugam.
Eco World to build for first time homebuyers
Eco World chairman says banks and GLCs are in good shape
PETALING JAYA: Eco World Development Group Bhd’s chairman Tan Sri Liew Kee Sin is confident that Malaysia is structurally sound despite the unprecedented fall in oil prices.
Kicking off the first StarLIVE Business Series: Power Talks at Menara Star over the weekend, he said the country today was in a strong position to weather these circumstances.
“The banks are well capitalised while many of our government-linked companies (GLCs) are solid presently such as Khazanah Nasional Bhd. This is the good news, that the banks are not in trouble while none of the GLCs are in trouble. This is our fundamental strength and key to our economy,” Liew said.
“I am very confident that the Government will come up with a good budget next week because the Government is today listening to the people. While the ringgit is bad, the good news is that there is a solution to 1 Malaysia Development Bhd’s (1MDB) woes,” he said.
He said that the solution was being panned out on the markets now because 1MDB’s power assets and Bandar Malaysia had been sold.
“The economy will still grow by about 4%-5% this year despite the news and businesses need to take advantage of this,” he said.
He also rebutted comments by an American fund manager Peter Kohli who reportedly said that investors should stay clear of investing in Malaysia.
“I dispute him because there are a lot of people who still regard Malaysia as a jewel such as the mainland Chinese. Some are concerned that they are being involved but they are paying real money for our assets and bringing money into the country,” he said.
Speaking also on Eco World, which he founded, Liew said he decided to start out with his own property development company after he left SP Setia Bhd, which was also founded by him, pursuant to the takeover of SP Setia by Permodalan Nasional Bhd.
“It was very tempting and my wife told me, why not just relax and enjoy what we have attained. But I told myself that I will not fade away and thanks to my chief executive officers, we managed to recreate a brand once again,” he said.
He said having a solid team behind him in both family and work lives was key to him having being able come this far.
“I don’t play golf, I don’t go drinking often and my friends tell me that I am a boring person, so I decided to go back to work. If we worked together as a team, we will never go down,” he said.
He added that investing in people was the main ingredient behind creating successful brands.
“The people are the DNA of the company and over time, we have developed a DNA for ourselves as well. You need to invest in your people.
“In Eco World, we have the Eco World Learning Academy where all our staff members, irrespective of their education background, are trained,” Liew said.
“So far, in our company, we have been able to create and sustain people who are passionate and committed to their jobs,” he added.
On his family, he said instilling values in children were a priority from a young age.
“For my family, we told our kids that when it comes to food and book purchases, they can spend any amount of money they want to.
“But when it comes to branded items, they cannot buy those without my permission because they do not deserve it yet. We cannot afford to be spendthrift with such luxuries in life,” Liew said.
By Daniel Khoo The Star/Asia News Network
Related:
Mentoring role for Eco World’s Liew
EXCLUSIVE: SPOTLIGHT ON ECO WORLD'S LIEW TIAN XIONG
Property Development Entrepreneur Tan Sri Dato' Sri Liew Kee Sin
Apr 25, 2015 ...Liew and his son Tian Xiong (left) at the interview. The biggest shareholder of
Eco World Development Group is Tian Xiong, who at 22 in 2013 ...
Jan 22, 2014 ...S P Setia fell five sen to close at RM2.88 while Eco World was up one sen to ... “
Tan Sri Liew (Kee Sin) told me that I can scold him (Xiong).
Apr 23, 2015 ...SP Setia Bhd 4, UEM Sunrise Bhd ... Bhd 18. Eco World Development Group Bhd
19. .... Entrepreneur Liew Kee Sin from SP Setia to Eco Wor.
National pride: EcoWorld’s father and son team Tian Xiong (left) and Kee Sin proudly wearing the campaign’s wristbands.
It has been more than a month since the #AAnakAnakMalaysia campaign started and today marks the final day of the simple yet meaningful campaign.
What started out as a campaign to unite Malaysians and uphold the spirit of independence quickly grew and flooded social media, especially with images of the people creatively expressing their patriotism using the campaign’s signature #AnakAnakMalaysia wristband.
Together, two proud Malaysian companies – EcoWorld Development Group Bhd and Star Media Group Bhd (formerly Star Publications (M) Bhd) – banded together to remind us what it means to be Malaysian and to look beyond skin, cultural background, race and creed.
The campaign stands firm in its belief that embracing diversity is key to success and with millions of shares of pictures with the hashtag (at www.anakanakmalaysia.com), it was evident that the campaign struck a chord in the hearts of Malaysians.
Wong (left) beaming with pride as he shows his solidarity with Malaysians.
The Star sat down with EcoWorld chairman Tan Sri Liew Kee Sin, executive director Liew Tian Xiong and Star Media Group Bhd group managing director and chief executive officer Datuk Seri Wong Chun Wai to hear from them the journey of the campaign towards Malaysia Day and its impact.
Tian Xiong said the response to the #AnakAnakMalaysia campaign was beyond what was imagined.
When coming up with a Merdeka-Malaysia Day campaign, he said the group branding team had wanted to do something different.
“Over the years, we realised that fewer flags are being waved. We just wanted to do something significant and remind people that there is a lot to look forward to in this country,” he said.
Although there were about 20,000 pictures shared through the hashtag, Tian Xiong said the total number of shares accumulated to about six million across all social media platforms.
“Everyone was posting pictures –no matter where they were. There were so many creative pictures,” he said.
Tian Xiong’s favourite so far has been the one where a father uses his fingers to form the shape of a heart on his pregnant wife’s belly, signifying the coming of an “Anak Malaysia”.
The campaign drew attention in the media with Tian Xiong even getting personal feedback.
“Everyone has been saying that it’s a good campaign. We made 480,000 wristbands for this and there are still people asking for more,” he said, adding that he always made it a point to pass these to his friends whenever they met up for their weekly football games.
“I’ve never been embarrassed to be a Malaysian. This country has a lot to offer and it gives you character.
“Even when I was studying abroad, I always wanted to come back,” he said.
Growing up, Tian Xiong said being tolerant of other races came naturally, particularly when he was surrounded by people of various ethnic groups every day.
His father Kee Sin said as a parent, the key was to teach children to respect each other, not to look at skin colour, and to embrace diversity.
“Parents should let their children mix and mingle with different races and Malaysians should make friends, rekindle friendships and not stay within their own boundaries,” he said.
In EcoWorld, he said diversity was their theme, which was embraced by all employees.
Growing up in Plentong New Village, he said it never mattered what race each child in the football field was then as everyone just bonded over the sport.
He believes that the reason for such troubled times in the country is because people have taken the country’s richness in culture, race, and religions for granted.
Leaders, he said, should now think of ways to move forward.
A proud Malaysian, he said he always did his little part in placing Malaysia on the world map whenever he travelled.
“I always make it clear to everyone I meet where I come from and will continue to remind people,” he said, adding that overseas, it did not matter what one’s race was as everyone identified themselves as Malaysians.
Wong agreed with EcoWorld that the response to the campaign had been overwhelmingly successful.
“The National Day-Malaysia Day campaign struck a chord with all layers of Malaysians because the majority of us are tired of race politicians and, certainly, disconnected politicians who use race and religion to ensure their survival.
“This is not what most moderate Malaysians want for this country. Malaysians want to celebrate these two great days, not mark these important dates with fear.
“We must be able to go to the streets on Aug 31 and Sept 16 in a celebration of joy. These two dates are about Malaysians of all races, religions and cultures coming together as one people,” he said.
It was shocking, he added, that some had chosen to draw and emphasise on the differences – whether real or imaginary.
Wong said they got daily calls from Malaysians wanting to be part of the initiative and, regardless of race, he could see the genuine joy and pride each time they put on the wristbands.
“We share this joy for our little part in making history for Malaysia.
“It was truly a people’s initiative to spread the word of moderation and we hope to carry out a similar collaboration next year where, again, all Malaysians can make a simple statement of their love for our Malaysia which we truly love,” he said.
Liew and his son Tian Xiong (left) at the interview. The biggest shareholder of Eco World Development Group is Tian Xiong, who at 22 in 2013 became the major shareholder of the company. Entrepreneur who drives the ...
Liew's eldest son, Tian Xiong, is a major shareholder and director in Eco World, another property firm set up by former S P Setia top brass. S P Setia fell five sen to close at RM2.88 while Eco World was up one sen to RM4.15.
“Property development companies such as E&O, Eco World Development Group Bhd and Ewein Bhd are embarking on new large-scale mixed development projects in the state with total gross development value (GDV) of ...
The developers who took part in the exhibition were Eco World Development Sdn Bhd, SP Setia Bhd Group, IJM Properties Sdn Bhd, Asas Mutiara Sdn Bhd, Chong Company Sdn Bhd, Sunway Grand Sdn Bhd, BSG Property, ...
Liew and his son Tian Xiong (left) at the interview. The biggest shareholder of Eco World Development Group is Tian Xiong, who at 22 in 2013 became the major shareholder of the company.
Entrepreneur who drives the smaller Eco World group is still a much talked-about figure in corporate world
AT 57 years of age, Tan Sri Liew Kee Sin can easily count himself to be one of the most talked about personality in Malaysia’s corporate circle – by the Government, the private sector and property investors.
Amidst the unravelling of events over the past four years, including his exit from SP Setia Bhd, Liew continues to be among the corporate figures today that enjoy the adulation of some and the wrath of others.
Since leaving SP Setia a year ago, Liew has been furiously on the ball, trying to “regain” what he has lost. He has kept a fast and furious pace, though buffeted on every front by unabating current.
Although he has previously overcome challenges thrown at him, the pressure this time is different, in severity and magnitude. It’s a pressure cooker in Eco World Development Group Bhd (EWB), he admits.
“The momentum is on-going. It forces me to be the face of Eco World,” he says.
The positive side to all these is that he has about 300 out of a staff count of 800 who joined him from his previous company. This round of rebuilding includes his son, Tian Xiong, 24. That may also account for him being more driven than before.
While he has made a success of the 4,000 acres in S P Setia’s flagship development in Shah Alam years ago, today’s climate of high house prices and stagnant wages mean his team would have to work doubly hard. So far, however, most of his projects in the Klang Valley and Johor seem to enjoy take-up rates of 80% and above.
His latest launch in Batu Kawan, Penang, has prices hovering in the RM700,000-RM800,000 bracket.
Credited with making something out of 4,000 acres in Shah Alam, Liew is trying to do the same in Semenyih, Selangor, and Batu Kawan, Penang, on a smaller scale. Liew says his objective is to set a new benchmark in terms of concepts, ideas and designs for branding purposes.
Next month, he will be launching 1,130 units in London City Island with a gross development value (GDV) of £617mil, at a time when house prices are frothy, with wages stagnant. The May 7 elections is another dampener. The Employees Provident Fund (EPF) has just sold a building at a profit and may be selling another.
The weakening ringgit works for and against him. For local investors, a property abroad is a good hedge against exposure to any possible future weakening of the ringgit. The downside is that the pool of buyers shrink with the weaker ringgit.
However, the target market for the London City Island project goes to Hong Kong, Singapore and London.
Even as he is keeping his finger on sales, other challenges faces Liew and the Eco World group.
Eye on SPAC
In October last year, Liew and his team proposed to list Eco World International Bhd (EWI) as a SPAC (special-purpose acquisition company). But the Securities Commission has yet to approve the application.
While awaiting the SC’s nod for the the proposed SPAC, in January, he and his right hand man Datuk Voon Tin Yow in their personal capacity, via a private vehicle, entered into a joint venture with UK-based Ballymore on a 75:25 basis to develop three projects in London – with the first slated to kick off next month.
The plan was to inject the three properties into EWI, which will be the vehicle for the proposed SPAC. Shareholders of EWB would not be left out as they would be offered up to a 30% stake in EWI.
It was a neat plan – at least on paper.
But the snag is that a SPAC is a blank cheque listing. It is supposed to list without pre-identified and ready assets, which is an issue when it comes to EWI. This is despite Liew’s plan to inject the private purchases “at cost plus holding costs” – meaning Liew and Voon do not profit from the asset injection.
“But this goes against the spirit of SPAC guidelines as set by the SC. A SPAC is a blank cheque listing ... a cash box looking for assets,” says a merchant banker.
“To go global, we must react quickly to market conditions, better design concepts and learn. We have the skill set,” he says. He learned a lot managing and marketing Battersea. No matter how challenging a project, “you gotta break it down to smaller bits”.
Nevertheless, Liew hopes to see some development with respect to the SPAC application within the next month or so.
Keeping EWB and EWI on separate lanes will help him to manage the gearing of both companies and reduce dilution for shareholders of EWB that includes his son, who is the major shareholder.
Liew says he also does not want to park the London assets under EWB because they are too big for its balance sheet.
Although his stake has diluted from 35.05% in 2013 to 13.52% on March 27, 2015, he is still the major shareholder.
Visionary though he may be, time was on his side when Liew built his previous “priced possession”, which is S P Setia. He built S P Setia over the years at a more even pace while the momentum and task he faces today with regards to the Eco World Group has been nothing short but blistering.
Within two years, the company has accumulated 5,396 acres with a GDV of about RM55bil. Debts was up at RM1.15bil as at Jan 31, 2015, from RM215mil in September 30, 2014. (Sept 2013: RM52mil). EWB completed a rights issue raising RM800mil and will undertake a placement. At the end of the corporate exercise, EWB’s gearing will be less than 0.6 times and it will be sitting on a pile of cash that will be used for working capital to develop the massive land bank here.
Liew says he received a lot of offers to work with landowners.
“People ask, why so aggressive? It’s because of the brand. We want to charge ahead in Malaysia. We are using up about 800 acres a year.”
Dealt a good hand
Although Liew has been dealt a good hand in his working life, he may be losing another priced project, all within two years.
As he goes about tying up loose ends on the Battersea chairmanship, a legacy from S P Setia days, and finishing the restructuring in EWB by the end of this month, questions about conflicts of interest have surfaced.
The Battersea Power Station is a 40:40:20 project with S P Setia and Sime Darby holding equal share and EPF remaining 20%.
“When I resigned from S P Setia in April 2014, the Battersea board suggested I wait till September 2015. At that time, there was no Eco World Ballymore (Holding Co Ltd, a developer of the three projects) yet.”
The private vehicle belonging to Liew and Voon – Eco World Investment – has a 75% stake in EcoWorld-Ballymore while UK-based Ballymore Group owning the rest.
At about June of last year, he declared to the board of Battersea of his interest to go into property development in Britain. He was told to wait.
Six months later in January this year, Liew and Voon went public with their 75% stake in the UK-Malaysia joint venture. At that point, he felt “obligated to resign” but was told to wait.
“We have three projects which may seem to be competing with Battersea Power Station although in terms of price point, they are priced differently.”
The latest Battersea Phase 3A units are priced at £1,700 per sq ft while the EcoWorld-Ballymore units are being sold at about £1,000 per sq ft. About 90% of the EcoWorld Ballymore units will be less than £1mil.
Ironically, a vexing issue confronting Liew these days is his chairmanship of Battersea. The roots of the situation he is caught in today can be traced to his entrepreneurship that created Malaysia’s biggest property company that he lost control to Permodalan Nasional Bhd – after a protracted corporate exercise which started in 2011.
Liew, however, is still capable and motivated to use his set of skills to further create value for himself and those around him. But the dichotomy is between duty and interest.
“I do not want to offend anyone anymore. But I (also) feel duty bound,” says Liew.
The Battersea project, which is Liew’s brainchild when he was in S P Setia, has several key milestones in the next one year.
Phase one of the project will be handed over to buyers next year. Work on Malaysian Square – the pride and joy of Malaysia – has just started. Work on London’s underground Northern Line extension, which connects to Battersea, begins this year. These milestones will help the investment to appreciate.
The British authorities are concerned about the reconstruction of the four white chimneys and the restoration of the power station brickwork. So Battersea has quite a bit of important obligations to meet in the next one year and it cannot afford any slip-ups.
“I am under a lot of pressure ... Morally, I should resign. But when I buy (my land in London), I also declare (to the board). I am duty bound to declare on the grounds of good governance. At the same time, I am also duty-bound as chairman because this year is crucial for the Battersea.
“I am trying to get out of this (situation) because I want to reduce the areas of conflict between myself, the Government and everybody else. I have lost S P Setia and I should gentlemanly give up (Battersea),” says Liew.
Time will only provide an answer.
With London mayor Boris Johnson ending his term in 2016 – and considering Liew has a good working relationship with him – there are are more than several reasons for shareholders of Battersea to continue to retain him for another year as chairman. Before works such as the construction of the underground station and reconstruction of white chimneys take off, there is a lot of interaction with the London authorities, something that is not easy to cultivate.
Interest versus duty
Whatever the outcome of his Battersea chairmanship, there are at least two broad contentious issues here. His fiduciary responsibility and duty of care is one. Liew has taken that duty seriously and returned value for that which was entrusted to him. The second issue is his skill set. Life has obviously given Liew a good card, despite his losses.
Now, the question that arises is if he should wait if opportunities come, complete all ties with Battersea and S P Setia before embarking on new ventures that may not come knocking every day?
Every day, directors are offered various opportunities which conflict with their fiduciary duty. Often times, the fiduciary duty of directors, parallel to trustees, can be onerous. But the law is the law.
Yet, in many ways, Liew’s situation is parallel to a 1978 case of Queesland Mines Ltd v Hudson. The company Queensland Mines was an iron ore mining company that established as a joint venture between A Ltd and F Ltd. Hudson was the managing director of A Ltd and had negotiated with the Tasmanian government for mining licences.
Just before the licences were issued, Hudson’s joint-venture partner ran into financial difficulties and was unable to proceed with the venture.
Hudson resigned, taking the licences with him, and formed his own company. At considerable risk and expense, Hudson exploited the licences and earned profits. Queensland later filed a suit against Hudson for what it claimed was abusing his position to divert opportunties for himself.
However, the courts ruled that although the opportunity to make profits came to Hudson through his position at Queensland Mines and was something that the board was made aware of, Hudson was not in a position of conflict.
The position Hudson was prior to 1978 is the predicament Liew faces today. In both these cases, the contention boils down to timing and turn of events.
If one were to consider the big picture and balance out the events surrounding Liew in the last four years, should he not be allowed to exploit the resources due to him because of his skills and expertise? Or should he be shackled by time and ties, despite having added value to those he has been entrusted with? That would be unfair to Liew.
The legacy issue – passing the baton to the right person
AT the spanking new Eco World International Centre in the Gardens office block in Kuala Lumpur recently, a photo session was in progress. There was a light-hearted camaraderie in the air.
Tan Sri Liew Kee Sin and his top management were present, all of them in their white Nehru-collared shirt with green trimmings.
The photo session was as much symbolic as telling. It was as if to say: “These are the people I will need to grow Eco World Development Group Bhd (EWB).”
With a staff strength of about 800, about 300 of them were from Liew’s previous company S P Setia Bhd. Despite the market conditions working against the property sector and crushing issues confronting him, Liew was his usual warm, confident self.
A lot of this has to do with the people around him. Liew was named chairman in March and his right-hand man Datuk Voon Tin Yow, previously from S P Setia, joined the group officially as executive director.
A notable addition was newbie Liew Tian Xiong, 24, bright-eyed and smiling. He first surfaced in 2013 and has been seen as a proxy of his father. The presence of that young man has changed the landscape for Liew.
Passing the baton
It is a legacy issue. As one considers the property sector, a number of the country’s developers have in one way or another paved their sons and daughters to join Dad.
There is Datuk N.K. Tong, 47, group managing director of Bukit Kiara Properties Sdn Bhd who joined Datuk Alan Tong, who is known as Condo King for his work in Sunrise Bhd’s Mont’Kiara.
It was the elder Tong who saw the potential of the area, then Segambut and bought 100 acres there. Over the years, Mont’Kiara has progressed to become a thriving suburb and is currently considered as “an aspirational location” among the young.
Ken Holdings Bhd group managing director Sam Tan, 35, joined his father Datuk Kenny Tan. That was 2004, and he was 24.
Over at the Sunway group, Sarena Cheah, 40, the daughter of Sunway Bhd founder Tan Sri Dr Jeffrey Cheah and anointed successor, will assume full control of the group’s key property unit effective May 1. She may well have been the youngest to join Dad, when she was just 20, in 1995. She started out in the corporate finance and group internal audit divisions.
Passing the baton cannot be done overnight. There is a lot of planning to do. There is also the task of moulding and nurturing the right person for the job and looking over the shoulder of the young person to ensure they are constantly on the straight and narrow. If there are more than one, then there is the selection process of who will take up the position of annointed successor.
After the painful lesson of having lost S P Setia, Liew would clearly circumspect legacy and stewardship issues.
Which takes this story to next level.
Who is working for who?
The years of passing the baton may be painful, for both parties. This explains why the years of preparation are so crucial before the final moment of actually handing over the reins. In each of the three cases – N.K., Sam and Sarena – the children joined Dad and allowed themselves to be moulded.
Which takes us to the next question.
Is Tian Xiong working for Dad, or is Dad working for Tian Xiong?
Every parent wants the best for their children and Liew is no exception.
By joining the company now, Tian Xiong will have “the history” of the company. But will he be able to take on turbulent times?
He ponders: “It’s a pressure cooker here.”
If the staff do not accept him, he will never be the “real boss”, says Liew.
Of late, Liew has been keeping the young man closely by his side.
The rationale, says Liew is that, whatever Tian Xiong had learned in EWB in the last two years, he would take years to learn outside. So he better learn fast and learn now.
Stewardship
It is not just passing the baton. It is stewardship.
Says Tian Xiong after Liew steps out of the room: “Every night, from 9 to 10pm, he would nag me about how I dress, my tie, what time I get into office, how long I took for lunch and what I did after lunch. And other larger office and market issues.
“He also told me that I have to earn it, that it is not going to drop on me, that I have other siblings,” says Tian Xiong.
On whether he was pressured into returning to Malaysia from Melbourne where he graduated in 2012 with a Bachelor of Commerce from the University of Melbourne, Australia, he says he returned on his own free will.
The young man first surfaced in 2013 as a buyer for a little known company Focal Aims Holdings Bhd. His emergence “caused a tsunami” because during that period, there was many questions as to Liew’s move.
Tian Xiong started out in corporate finance department for the first two years and is currently in corporate marketing.
S
P Setia's head honcho Liew resigns, looking forward to mentoring in Eco
World. Ten months after S P Setia Bhd unveiled its succession plan,
head honcho Tan Sri Liew Kee Sin has announced his intention to resign
as president and chief executive officer. Also quitting the ... Liew
would leave the property giant on April 30 while Teow would stay on
until July 31. Liew and Teow would continue to be involved in the
Battersea Power Station project in London until ..
Tan
Sri Liew Kee Sin, President Executive officer of SP Setia Berhad, with
the Malaysian Ernst & Young Entrepreneur of the Year 2011 award
yesterday at the J W Marriot Hotel in Kuala Lumpur. Liew stands out for
his ...
Ten months after S P Setia Bhd unveiled its succession plan, head honcho Tan Sri Liew Kee Sin has announced his intention to resign as president and chief executive officer.
Also quitting the company is chief financial officer Datuk Teow Leong Seng.
Liew’s departure was expected by industry observers but Teow’s
resignation came as a surprise as he was named deputy chairman in the
property player’s succession plan earlier, analysts told StarBiz.
Liew would leave the property giant on April 30 while Teow would stay on until July 31.
Liew and Teow would continue to be involved in the Battersea Power Station project in London until September 2015 given the prominence of the international project.
Liew would also remain managing director for Qinzhou Development (M) Consortium Sdn Bhd,
a Sino-foreign joint venture company to develop the China-Malaysia
Qinzhou Industrial Park in the republic until the same period.
It is also speculated that present chief operating officer Datuk Voon Tin Yow, who was appointed the company’s acting president and chief executive officer, might also resign later.
In a statement, S P Setia said Voon’s appointment would be effective from May 1, 2014 until April 30, 2015.
Voon would be supported by executive vice-president Datuk Khor Chap Jen who would be appointed acting deputy president during the same period, it said.
S P Setia chairman Tun Zaki Tun Azmi
said: “Whilst the board and I are greatly saddened by the departure of
Liew, Teow and Lee, we are confident that the group will continue to be
in steady hands under Voon and Khor.”
Observers expected its biggest owner Permodalan Nasional Bhd (PNB) to take more proactive measures in managing its talents as well as setting the company’s direction going forward.
It was earlier reported that Datuk Jamaludin Osman of I&P Group Sdn Bhd
– PNB’s property arm – was among the candidates tipped to take over
Liew’s stewardship. There were also talks of a possible asset injection
by PNB into S P Setia.
Liew said: “Given the solid footing
which the company is on, I believe the time has arrived for me to step
down after 18 years as CEO.
“With my children all growing up and
starting out on their own career paths, I am looking forward to
spending more time with them, mentoring and guiding them.”
Liew’s eldest son, Tian Xiong, is a major shareholder and director in Eco World, another property firm set up by former S P Setia top brass.
S P Setia fell five sen to close at RM2.88 while Eco World was up one sen to RM4.15.
Analysts said the market has priced in Liew’s retirement from S P Setia
and they expected the company’s operation to remain intact for the time
being.
Bloomberg data showed that its forward
price-to-earnings (P/E) was 13.4 times compared to 16.06 times
currently. Its average P/E ranged from 17 times to 20 times from
financial year ended Oct 31, 2011 (FY11) to FY13.
Liew is
instrumental in growing S P Setia from a RM200mil entity in 1998 into a
multi-billion ringgit international property company.
With him at the helm, S P Setia achieved sales of RM8.24bil in FY13, almost double from what it registered in FY12.
The group has 4,782 acres of undeveloped land bank worth RM102bil while its unbilled sales stood at RM9.6bil as at FY13.
- Contributed by Ng Bei Shan The StarBiz/ANN
Who’s who in Eco World
Fresh from graduating as a Bachelor of Commerce from Melbourne
University late last year, Liew Tian Xiong, 22, is not short of
persuasive skills that a sales person possesses as he introduces EcoSky
to StarBizWeek when we visited Eco World Development Sdn Bhd’s sales
gallery.
In fact, one of the key performance indicators he has to meet, is to
sell off 30 units of its KL project, EcoSky, which will then determine
whether he gets his bonus.
Besides sales and marketing, he is also involved in project planning, land acquisition and liaising with land consultants.
Asked on people who influenced him, the affable young man says: “I
have probably learnt from my father throughout my whole life. He taught
me to keep my head down and listen to people, and to keep asking
questions.”
He says he has learnt from both CEO Datuk Chang Khim Wah and COO
Datuk S. Rajoo and what he is going through, is essentially a fast track
management training programme.
Chang says: “There is a lot of things (for him) to learn. He’s doing
groundwork like sales and marketing, planning and reading legal
documents although he is holding the director’s card.”
“Tan Sri Liew (Kee Sin) told me that I can scold him (Xiong). I was
scolded by Tan Sri Liew back then, so it’s pay back time now,” Chang
jokes.
However the relationship among the management team when StarBizWeek met up with them is warm and fervent.
Chang quips: “We even play futsal with him (Xiong)… ”
The experienced management personnel like Chang and Rajoo had known
each other for about two decades, but Xiong, at his tender age, seems to
be gelling well with them.
Xiong’s younger brother, Tian Rong, 20, is also with the company as a
contract staff. He is pursuing an economics degree from University
London College and is having a stint in the company.
The man who helms Eco World, Datuk Chang Khim Wah, 50, joined S P
Setia in 1994 and had been there for about 20 years. Prior to that, he
was a consultant engineer in Australia. He was one of the members
instrumental in setting up S P Setia’s Johor Baru division and went on
to set up an office in Singapore and Jakarta.
He concedes that the team has S P Setia’s DNA in terms of team effort
and competitiveness. His relationship with Liew was depicted as an
understanding that required little words.
“We don’t speak long sentences (but) we understand each other,” he shares.
Chang’s counterpart, Rajoo, 50, assumes the position of COO in Eco
World. He spent his first seven years in S P Setia in the Klang Valley
helping the development of Bukit Indah Ampang and Pusat Bandar Puchong
and subsequently in some of the township developments in Johor where he
then worked closely with Chang.
After that, he was overseeing S P Setia’s projects in the northern
region for seven years and had carried out 13 projects with a gross
development of more than RM2bil in the Pearl of the Orient.
Heah Kok Boon, 46, the chief financial officer of Eco World, is a
chartered accountant who has over two decades of experience in the field
of corporate finance, corporate fund raising, investments, merger and
acquisition as well as other finance-related areas.
He was with S P Setia’s corporate affairs department for six years prior to his current role.
When introducing the major shareholders behind Eco World, Chang says Leong and Rashid are the two major shareholders.
“These two names are more than enough (for Eco World’s credibility),”
Chang says, joking that Xiong has no shares in the property outfit.
One of its major shareholders and directors, businessman Tan Sri
Abdul Rashid Abdul Manaf, 65, was trained as a legal practitioner from
Middle Temple London.
He was chairman for the board of S P Setia Bhd from March 12, 1997 until Oct 25, 2012.
Another director, who is a corporate figure, is Datuk Eddy Leong Kok
Wah, 58. He holds a master of business administration from University of
Hull, United Kingdom, and is also a member of Institute of Bankers
(UK). He has an extensive career in the banking industry and is
currently an executive director of Salcon Bhd and also sits on the board
of a few other companies. He was in S P Setia’s remuneration committee
from Sept 21, 2005-Feb 28, 2013.
Liew would represent Malaysia to compete for the coveted Ernst & Young World Entrepreneur of the Year award at the annual award in Monte Carlo, Monaco next year.
The award was presented at the Ernst & Young awards gala, which was launched by International Trade and Industry Minister Datuk Seri Mustapa Mohamed who represented the deputy Prime Minister.
According to the panel of judges, Liew stands out for his innovative thinking – embodying the true spirit of entrepreneurial excellence and commitment to continue making a difference in people’s lives.
Tan Sri Liew Kee Sin, President Executive officer of SP Setia Berhad, with the Malaysian Ernst & Young Entrepreneur of the Year 2011 award yesterday at the J W Marriot Hotel in Kuala Lumpur. Liew stands out for his innovative thinking – embodying the true spirit of entrepreneurial excellence.- Star picture by Shahrul Fazry Ismail.
Liew had demonstrated keen foresight and the entrepreneurial qualities of passion, vision, determination and innovation, with an emphasis on sustainability.
SP Setia is a property developer with a strong brand name.
It posted a 30% year-on-year jump in net profit to RM327.97mil for its financial year ended Oct 31, 2011.
Revenue increased 27.9% to RM2.23bil during the period.
The group set a new full-year sales record in FY11 of RM3.29bil, a 42% increase from the previous record of RM2.31bil set in FY10.
It was the fourth consecutive year of increase in the group’s sales and represented the second consecutive year that total group sales had exceeded RM2bil.
The group recently launched its landmark integrated green commercial and mixed residential development called the KL EcoCity.
Internationally, its recent launches included Fulton Lane and EcoXuan, the group’s maiden project in Melbourne, Australia and second project in Vietnam respectively.
SP Setia was thrust into the limelight following a takeover bid by Permodalan Nasional Bhd (PNB) at RM3.90 per share and 91 sen per warrant in September.
SP Setia, Liew and PNB had proposed to enter into an agreement to formalise the incentives and management rights relating to the management and general conduct of the business of SP Setia.
The agreement is subject to an approval by the Securities Commission.
PNB might be paying out lucrative bonuses and stock options to SP Setia’s top management in order to persuade them to stay on with the group.
Meanwhile, Ernst & Young Malaysia country managing partner Abdul Rauf Rashid said Ernst & Young believed that entrepreneurship was fundamental and vital in every economy.
“Entrepreneurs help generate employment and industry growth.
“Indeed, driving entrepreneurship in Malaysia augurs well with the Government’s Economic Transformation Programme that encourages and facilitates private sector initiatives to drive our economy to a high-income nation,” he said in statement.
The four recipients as well as the overall country award recipient were selected by an independent panel of judges guided by a set of globally-benchmarked criteria.
SP Setia targets RM4bil in property sales
By THOMAS HUONG huong@thestar.com.my
Developer posts 30% jump in FY11 net profit
SHAH ALAM: SP Setia Bhd posted a 30% year-on-year jump in net profit to RM327.97mil for its financial year ended Oct 31, 2011 (FY11). The property developer attributed this mainly to higher selling prices for new launches and the stabilisation in the prices of construction materials. Revenue also increased 27.9% to RM2.23bil.
The group also set a new full-year sales record in FY11 of RM3.29bil, a 42% increase from the previous record of RM2.31bil set in FY10.
It was the fourth consecutive year of increase in the group's sales and represented the second consecutive year that total group sales had exceeded the RM2bil mark, said SP Setia in a Bursa Malaysia filing. Liew: ‘We target 70% of our product range in Singapore to cater to local upgraders.’>
(The sales figures are based on the retail pricing of properties sold, while revenue is recognised in the accounts when the developer is paid at the point of purchase and also when construction is completed in stages.)
SP Setia has proposed a final dividend of 9 sen per share. Together with the interim dividend of 5 sen per share, total dividend for the year works out to be 14 sen per share, representing a payout of about 59% of the group's net profit.
The group's profit and revenue were largely derived from property developments in the Klang Valley, Johor Baru and Penang.
Ongoing projects which contributed included Setia Alam and Setia Eco-Park at Shah Alam (Selangor), Setia Walk at Pusat Bandar Puchong (Selangor), Setia Sky Residences at Jalan Tun Razak (Kuala Lumpur), Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Baru and Setia Pearl Island and Setia Vista in Penang.
“This is despite factors such as the external headwinds from the economic uncertainty in Europe, and Bank Negara's guidelines seeking to further encourage prudence in bank lending,” he told reporters.
About 90% of new sales in FY12 would come from Malaysia, with the balance from foreign markets.
Liew stated that the group had strong branding, and offered an extensive range of products that cater to diverse market needs.
The group's recent launch of its integrated green commercial and mixed residential development, KL EcoCity (Kuala Lumpur), is expected to contribute strongly to sales in FY12.
Other recent launches like Fulton Lane and EcoXuan, the group's maiden project in Melbourne and second project in Vietnam respectively, are expected to also help augment sales in FY12.
Meanwhile, Liew said he was not too concerned about the recent 10% increase in stamp duty for foreigners buying homes in Singapore.
“We target 70% of our product range in Singapore to cater to local upgraders. Foreign buyers will be about 30%, so we do not think there will be much of an impact,” he said.
Liew also said SP Setia was interested in making another bid to secure the project to redevelop London's Battersea Power Station. SP Setia had submitted a 262mil (RM1.3bil) offer for the project in November that was turned down, before recently making a a second bid of 324mil (RM1.6bil) that was also rejected.
A QUESTION OF BUSINESS By P. GUNASEGARAM p.guna@thestar.com.my
Permodalan Nasional Bhd's surprise bid for SP Setia raises more questions than answers IT must be great to have so much firepower at your fingertips. But it is also a huge responsibility. How do you get your target and keep it intact at the same time? It's the old question of having your cake and eating it too.
That's a dilemma that not just Permodalan Nasional Bhd (PNB) but many government-linked companies (GLCs) face. They have the money to buy over property companies but if they don't do it right, they stand the risk of losing the people behind these companies.
If the worst happens the staff leave, the company is unable to undertake its projects, quality of houses and other developments drop, launches get less imaginative, public perception deteriorates, and, ultimately, value gets destroyed.
By seeking to own the golden goose body and soul, it is sometimes killed. Occasionally, there is in the corporate world a very thin line between protecting and enhancing your investments and making a wrong move which may send their value plummeting down, if not immediately, in time.
The latest episode (see our cover story this issue) has raised eyebrows not least because of the manner in which PNB has made its bid for one of most respected and admired property companies in Malaysia, SP Setia.
PNB already has about a 33% stake in SP Setia but is seeking to raise this stake to over 50% by offering RM3.90 a share, about an 11% premium over the closing price before the announcement of its notice of takeover. It offered 91 sen per warrant, a premium of nearly 100%.
It has had its stake of just under 33%, the point at which a general takeover offer is triggered under the takeover code, since 2008 but pushed this to just over trigger point on Tuesday and announced its intention for a takeover the following morning.
The offer is conditional upon PNB getting control of SP Setia. PNB also announced its intention of keeping SP Setia listed by ensuring a shareholding spread even if it got more than 90% of the offer shares.
Initial calculations based on 75% control and acquisition of all warrants indicate that the takeover could cost PNB over RM3 billion, a lot of money for most private investors in Malaysia but a mere drop in the ocean for PNB which has over RM150 billion under management.
It's the second largest fund manager in the country after EPF which is twice as big with over RM300 billion in funds. But PNB is probably the largest equity investor in the country because of a much higher proportion of funds invested in equity. There is hardly a major listed company in Malaysia in which PNB does not have a stake.
The big puzzle is why has PNB launched this takeover offer which could potentially affect adversely the value of its quarry? What was PNB fearing? Was it just a matter of increasing its stake in a depressed market which undervalued SP Setia's assets or was there something else? And why did it not consult with senior management and shareholders even after its notice of takeover?
At this stage one can only conjecture on the answers and make educated guesses.
But first, what's wrong if PNB took a majority stake? Previously SP Setia had PNB as a major but not a majority shareholder. PNB did not intervene in management and had two board representatives. If the SP Setia board put up a proposal for shareholder approval, PNB cannot by itself stop it if other shareholders supported it. They include the Employees Provident Fund (EPF) with 13.4%, SP Setia president and CEO Tan Sri Liew Kee Sin with 11.26% and Kumpulan Wang Amanah Persaraan or KWAP with five per cent.
One must still note that the government-linked funds or GLFs already control over 51% of SP Setia. But with PNB alone poised to take over a 50% stake, feathers are being ruffled and questions are being asked as to what that means.
What would have been the ideal situation for SP Setia? Four factors would have contributed. An independent management, a good board which represented all parties, strong minority shareholders, and a diversified institutional base so that no shareholder dominated. The first three are pretty much in place but the fourth was not achieved because PNB had since 2008 been holding a stake of just under 33% and with two other GLFs, the stake came to over 50%. But was there a way of dispersing shareholding?
One deal being negotiated, it was reported, was for Sime Daby, a PNB company, to take a 20% stake through the issue of new shares in exchange for land banks. If it had come through, it would have helped to dilute PNB's shareholding. Still, Sime is related.
The underlying problem is this. GLFs and GLCs have lots of money and not many places to put them in. Good companies attract their attention but if they take control, and especially if they take management control as well, the move can destroy value.
Some of PNB's property purchase and privatisation acts in the past have not been particularly successful, if at all. The major reason is key staff leave after GLCs take control. That's a phenomenon that's happened quite a few times.
So far, PNB's stake in SP Setia had not been a problem. PNB had its two board representatives and it was quite satisfied with its stake. A balance seemed to have been reached with senior management, especially Liew who is also a major shareholder.
But that has been thrown askew with PNB's latest move. Part of the solution will be to convince the market that there will not be management interference unless things go wrong. But the only assurance of that is if stakes are far below 50%, perhaps not more than 30%.
PNB is primarily a passive investor. Thus its motivation should not be to stop dilution of its shareholding or moves to widen shareholding among companies it owns. Control should not be its primary aim.
Instead, it must focus on getting best value for its current stake, which may well be achieved by continuing to be clearly a passive investor. That's better than having a bigger stake in a less valuable company. Perhaps it could have put its RM3bil in other investments. But it looks like it's a bit too late for that.
l Managing editor P Gunasegaram is plainly perplexed by PNB's bid to take over SP Setia. Any explanations?
Leave it to the real businessmen !
ON THE BEAT WITH WONG CHUN WAI
Questions are being raised as to why Permodalan Nasional Bhd is making a takeover bid on SP Setia, a reputable housing developer.
IT may not have caught the attention of ordinary Malaysians but it is a big story that is now the hottest topic among the business community.
Housing developer SP Setia is a reputable name that many Malaysians are familiar with because of the quality homes it builds.
It has also ventured outside Malaysia and made its presence felt in Vietnam, Australia, Singapore and even Britain.
The man at the helm of SP Setia is 52-year-old Tan Sri Liew Kee Sin, a down-to-earth bank officer-turned-developer.
Some would even say SP Setia is Liew Kee Sin and Liew Kee Sin is SP Setia.
Fiercely proud of his humble beginnings in Johor – his father was a lorry driver – the Universiti Malaya graduate wanted to study law but was offered economics instead.
SP Setia started off as a construction company – a syarikat pembinaan as conveyed in its initials SP.
Liew turned it into a big-time property developer when he injected two projects – Pusat Bandar Puchong and Bukit Indah Ampang – into the company in 1996.
Liew has faced many challenges but he is now looking at the biggest fight of his career – one that is heavily staked against him.
Permodalan Nasional Bhd (PNB), the country’s largest asset manager and owner of 33% of SP Setia, is making a bid to take over the company.
On Friday, PNB bought an additional 23.5 million shares in the open market for RM3.868 a share, just 3.2 sen shy of its proposed takeover price of RM3.90.
PNB, with a RM150bil cash chest, is seeking to raise its stake to over 50% with its RM3.90 offer, which is about an 11% premium over the closing price before the announcement of its notice of takeover.
Such a takeover bid is not unusual in the corporate world, and more so when Liew only has an 11.3% stake in the company.
Other major shareholders of SP Setia include the Employees Provident Fund (EPF) with 13.4%, Kumpulan Wang Amanah Persaraan with 5% and over 40% are in the hands of minority shareholders. But the manner in which it was done has led to much unhappiness.
Despite having two PNB directors on the board, there was no courtesy of a verbal notification prior to the takeover move.
The general offer notice only reached the company on Wednesday at 8.30am, just before the market opened.
Some may argue that the element of surprise was for strategic reasons but there was still no call even after news broke out of the takeover bid.
In a nutshell, relations have been strained.
PNB has issued a statement saying it wishes to maintain the management team, which is known to be fiercely loyal to Liew, but no one is sure how events will unfold in the coming days.
However, questions have been raised as to why PNB is wanting to take over a company that is being run competently instead of remaining as a passive investor that is satisfied with good investment returns.
If the Government is actively pushing for the private sector to be the engine of growth, we have the right to ask why the GLCs are competing with the private sector.
Widening its shareholding base is one thing but controlling private companies will lead to speculation over its agenda, cause unnecessary concerns as well as send the wrong signals.
The whole exercise will cost PNB RM3bil, which is chicken feed to them, but there are political and economic ramifications that the country’s leaders should take note of.
It may not be such a grand scheme in the end for PNB if Liew decides to leave SP Setia and set up his own venture, and gets his senior management team to join him.
PNB may then find itself in a spot even after gaining control of the company.
No one would believe that there would not be interference from PNB, so let’s not kid Malaysian investors.
Civil servants who manage public funds should leave the business of running businesses and making money to the real businessmen.
Star Media Group managing director and chief executive officer Datuk Seri Wong Chun Wai (right) presenting a souvenir to Liew. With them is specialist editor M. Shanmugam.
Entrepreneur Liew Kee Sin from SP Setia to Eco World, passing the baton to the right person
