Sze Yi Association West Coast opts for completion of Wisma Tiong Hua project
The RM40 million offer from Arah Permai Sdn Bhd to acquire the Wisma Tiong Hua land in Karamunsing that is jointly owned by the Sabah United Chinese Chambers of Commerce (SUCCC) and the United Sabah Chinese Communities Association of Kota Kinabalu (USCCAKK) is officially off the table.
Arah Permai, the developer of the project, has notified both associations by a letter dated July 29, 2019, stating that it was resolved in their meeting that the company could not acquire only half of the ownership of the land since SUCCC has decided against selling its share in its meeting on July 14 this year.
As such, the company will comply with the originally signed joint venture (JV) agreement, which is to develop the Wisma Tiong Hua project.
The letter, signed by Arah Permai executive director, Datuk Francis Goh, also stipulates that the company will complete the development as scheduled.
Upon receipt of the letter, USCCAKK issued instructions to its 15 member associations by letter to decide whether they are in favour of continuing with the JV project or to cancel the JV agreement and bear the legal fees, should the matter goes to court.
For the first option, Arah Permai will continue to undertake the project, and, upon completion, both associations will receive a banquet hall, eight office lots, two meeting rooms and 40 percent of the parking spaces.
While the developer has given a RM2 million deposit to USCCAKK and SUCCC when the agreement was signed in 2013, and paid RM500,000 in expenses on behalf of the associations, the two associations would still have to bear RM8.224 million in land conversion premium.
The developer has agreed to pay the premium in advance and to deduct half of the revenue from the banquet hall as repayment.
The second option entails canceling the JV agreement and repay the RM2.5 million and other losses to the developer, which could rake up to a few million ringgit.
USCCAKK also estimates that the court case that could ensue may drag on for years and could incur another hundreds of thousands of ringgit. Should the court rules in favour of the developer, all 15 associations under USCCAKK will have to bear the compensation costs equally.
USCCAKK president, Datuk Susan Wong Siew Guen, said, all 15 member associations would have to inform USCCAKK about their decision by August 30 this year.
Wong said, the Sze Yi Association West Coast, Sabah which she leads, has opted for option one in its executive committee meeting on Wednesday, which was to allow the developer to complete the project.
She said her personal wish was for the association to not have to go to court and to be freed of the RM8 million debt that both USCCAKK and SUCCC had to bear and to repay the developer.
“We have explained to the committee members (of Sze Yi Association West Coast, Sabah) yesterday, and they have indicated that they would rather receive less commercial lots than to be buried in debt,” she told the media yesterday.
Wong said that whether the banquet hall would be profitable or otherwise remained uncertain, but either way, both associations would still have to pay the management fee.
“If the majority of the 15 associations under USCCAKK choose the first option, we hope to renegotiate for better terms, especially to do away with the RM8 million debt,” she said.