ASPL Aseana Properties Limited

27 December 2024

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF (A) ARTICLE 7(1) OF UK MAR IN SO FAR AS IT RELATES TO ORDINARY SHARES ISSUED BY ASEANA PROPERTIES LIMITED

Aseana Properties Limited

("ASEANA" or the "Company")

Legal Action

Aseana Properties Limited (LSE: ASPL), a property developer in Malaysia listed on the main market of the London Stock Exchange, today announces that the Company and its ultimate operating subsidiary, Urban DNA Sdn Bhd ("UDSB"), (collectively referred to as the "Group" or the "Plaintiffs") has, on 19 December 2024 via its solicitors, Messrs. Bodipalar & Partners, filed a legal action against the following persons:

(a)          Helen Siu Ming Wong ("Helen Wong") (a former director of the Company and UDSB);

(b)          Nicholas John Paris ("Nicholas Paris") (a former director of the Company);

(c)           Tan Hok Chye ("THC") (a former director of the Company and UDSB);

(d)          Thomas Patrick Holland ("Thomas Holland") (a former director of the Company and UDSB);

(Helen Wong, Nicholas Paris, THC and Thomas Holland shall be collectively referred to as the "Former Directors");

(e)          Jenny Lee Gyn Li (spouse of Thomas Holland) ("Jenny Lee"); and

(f)           RSMC Investment Inc ("RSMC"),

Jenny Lee, RSMC and the Former Directors shall be collectively referred to as the "Defendants". The legal action has been filed at the Kuala Lumpur High Court in Malaysia (Commercial Division) ("KLHC") via the Writ of Summons dated 19 December 2024 with the Statement of Claim (KLHC Suit No. WA-22NCC-889-12/2024) dated 20 December 2024 (the "Legal Proceedings").

A brief summary of the background facts in relation to the Legal Proceedings are set out below. 

SUMMARY OF BACKGROUND FACTS

1.     Helen Wong was appointed to the Board of the Company ("Board") on 17 June 2019 and subsequently appointed as Divestment Director in September 2019 for the sale of the Company's remaining assets (the "Divestment"). On or about 30 December 2019, the shareholders of the Company voted for the Divestment in an orderly and timely manner.

2.        On or about 24 October 2022, the Former Directors (save for THC who was not a director of the Company at the material time) purportedly approved a scheme (the "Scheme") seemingly aimed at incentivising and retaining the Company's key personnel (including Helen Wong who was at that time the Divestment Director) at 1.1% of the gross proceeds of the Divestment ("Divestment Fee").

3.         The Scheme not only provided for a Divestment Fee to be paid to Helen Wong and her team over and above the agent's commission (which is paid to the estate agent for selling the property) but it also provided for "break fees" to be paid to Helen Wong and her team (who are not employees of the Company) in the event they are removed from the Company for any reason whatsoever. The aggregate amount of the "break fees" claimed by Helen Wong and her team is USD550,000.

4.           On 14 February 2024, Nicholas Paris and THC passed a resolution, amongst others, for the Company to enter into the Loan Agreements (as defined herein) for an aggregate loan amount of USD1,000,000 (the "Purported Loans") with each of Helen Wong, Jenny Lee and RSMC, where, amongst others, an interest rate of 15% shall accrue on the Purported Loans and payable by the Company 1 year from the date of the Loan Agreements. The Company announced details of the Purported Loans on 7 March 2024.

5.          Further, on 14 February 2024, the directors of UDSB passed a resolution, amongst others, for UDSB to enter into the Charge Over Land Agreements (as defined herein) over 30 unencumbered properties owned by UDSB (namely 30 units in the hotel owned by UDSB known as The Ruma Hotel and Residences) valued at approximately USD6,555,000 based on a valuation report dated 18 February 2022 ("Subject Properties") as security for the Purported Loans ("Charges").

6.          On 23 September 2024, Helen Wong, Jenny Lee and RSMC, via Messrs King & Wood Mallesons, issued a letter to the Board of Aseana, inter alia, stating that:-

(a)          Helen Wong has "ceased" to be a director on the Board as of 30 July 2024. As such, pursuant to the Loan Agreements, the full amount of Purported Loans together with interest becomes immediately due and payable.

(b)          A sum of US$1,150,000 is due and payable (being the principal and full interest amount) under the Loan Agreements.

7.         Subsequent to the above, on 29 November 2024, Helen Wong, Jenny Lee and RSMC, via a Malaysian law firm, Messrs. Haris Ibrahim Kandiah Partnership, issued three Form 16D notices (Notice of Default with respect to a Third-Party Legal Charge) in respect of the Subject Properties ("Form 16D Notices"), inter alia, alleging that there has been default in payment of the Loan Agreements and failure to remedy the same within one month would result in Helen Wong, Jenny Lee and RSMC applying for an order for sale of the Subject Properties.

THE PLAINTIFFS' CONTENTION

8.          With respect to the Divestment Fee, the Plaintiffs contend that Helen Wong and her team engaged third party estate agents in Malaysia to effect the Divestment and paid commissions in excess of the maximum commission rate of 3% of the property's sale price as prescribed by the Valuers, Appraisers and Estate Agents Rules 1986 of Malaysia ("VAEA Rules"). Further, the Plaintiffs contend that Helen Wong and her team are not entitled to the Divestment Fee as this is in contravention of  Section 22C of the Valuers, Appraisers and Estate Agents Act 1981 of Malaysia ("VAEA Act"), which provides that no person shall act as an agent for commission, fee, reward or other consideration in respect of any sale or other disposal of land and building and of any interest therein unless such person is a registered estate agent and has been issued with an authority to practice under the VAEA Act. The Plaintiffs contend that Helen Wong and her team are not registered estate agents as required under the VAEA Act and therefore not entitled to any commissions for sales of properties of the Group in Malaysia.

9.           With respect to the Purported Loans, the Plaintiffs contend that the proceeds of the Purported Loans to the Company were utilised by the Company to pay directors' fees, consultant fees and other such fees and expenses with an interest of 15% charged on the Purported Loans, which contravenes Section 17A of the Moneylenders Act 1951 ("MA 1951") which prescribes  that the interest of a secured loan shall not exceed 12% per annum and only moneylenders licensed and regulated under the MA Act are entitled to lend monies at interest and in this case, take security interest over the Subject Properties.

10.        With respect to the Charges over the Subject Properties, the Plaintiffs contend that this is excessive and onerous when the Subject Properties are valued at approximately USD6,555,000 based on a valuation report dated 18 February 2022 whereas the outstanding principal due under the Purported Loans is USD1,000,000. Further, the 30 Subject Properties are units in the hotel owned by UDSB known as The Ruma Hotel and Residences (the "Hotel"). Prior to the units being charged to Helen Wong, Jenny Lee and RSMC, UDSB held and controlled 132 units out of a total of 253 units forming a majority as the strata unit holders. If the 30 units charged are sold or disposed, UDSB will only hold 102 units out of a total of 253 units thereby losing control of its majority as strata unit holders which will hinder its ability to sell the Hotel as a controlling strata bloc. By creating Charges over the Subject Properties and disposing the same, the Plaintiffs contend that Helen Wong, Jenny Lee and RSMC have acted in a manner detrimental to the financial standing and stability of the Company.

11.         The Plaintiffs further contend that Helen Wong and her team are not entitled to the "break fees" given that Helen Wong was not removed as a director (but instead not re-elected as a director of the Company at an annual general meeting of the Company held on 30 July 2024, details of which were announced by Aseana on 30 July 2024) and that such "break fees" are in breach of the Articles of Association of the Company. 

LEGAL PROCEEDINGS

Arising from the above, the Company has commenced the Legal Proceedings and is claiming various reliefs against the Defendants. In addition, the Plaintiffs have applied to restrain Helen Wong, Jenny Lee and RSMC from taking any steps to enforce and/or implement and/or acting upon in any manner whatsoever the Charges and commencing any foreclosure proceedings pursuant to the three Form 16D Notices dated 29 November 2024 in respect of the Subject Properties ("the Injunction Application").

On 23 December 2024, solicitors for Helen Wong, Jenny Lee and RSMC, Messrs Haris Ibrahim Kandiah Partnership, have given an undertaking that Helen Wong, Jenny Lee and RSMC will not be commencing any foreclosure proceedings arising from the Charges pending disposal of the Injunction Application.

Further announcements on any material developments in connection with these matters will be made by the Board of Aseana as and when it is appropriate and/or necessary.

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