Country Heights Holdings Bhd (CHHB) is requesting a refund of its RM6 million deposit on Heritage Tower in Seri Kembangan, which it acquired through an auction in December 2021.
Heritage Tower is a 10-storey office building that spans 343,405 square feet (about RM174.72 per sq ft). It was developed more than 10 years ago by Heritage Lakeside Developments, a private vehicle of Tan Sri Lee Kim Yew, the founder of CHHB.
The property was charged under a loan arrangement and was subsequently put up for auction in December 2021, by licensed auctioneer Ng Chan Mau & Co. Sdn Bhd, who represented and was appointed by Maybank, as part of claiming back a loan amount.
This was reportedly Ng Chan Mau & Co's third attempt to auction off the property.
According to CHHB in a stock exchange filing, the first auction was held on August 20, 2021, with the reserve price of RM60 million, while the second auction was held on October 8, 2021, with the reserved price of RM54 million but there were no takers.
CHHB decided to purchase the property via its wholly-owned subsidiary, Country Heights Sea Resort Sdn Bhd (CHSRSB), under the auction system.
It designated Golden Touch Investment Bank Ltd (GTIB) as its representative to bid for the property in December 2021.
CHSRSB signed a Memorandum of Contract with Ng Chan Mau & Co on December 9, 2021, following its successful bid for the property for RM60 million, and paid an RM6 million deposit.
CHHB informed Bursa Malaysia that the RM60 million purchase price was determined by CHSRSB's highest bid in the public auction.
In the filing, CHHB stated that the acquisition is in line with its overall corporate exercise and transformation plan to increase the group's capitalisation, value, and economies of scale.
However, during a recent inspection of the Heritage Tower, CHHB was shocked to see the current state of the property.
CHHB told Bursa Malaysia on April 8 that it will not complete the auction property and is seeking a refund of the RM6 million deposit it paid.
It said the building's condition is significantly different from the time CHSRSB first sighted it.
CHSRSB will also not pay the balance consideration of RM54 million within 120 days of the Memorandum of Contract entered on December 9, 2021, for the acquisition of the property, CHHB said in the filing.
When contacted, CHHB managing director Datuk Jared Lim told NST Property that Heritage Tower looked more like it was a construction site.
"We purchased the property because we thought it was a good buy to add to and expand our commercial portfolio. At the auction, the property is what you see what you get so we put down an RM6 million deposit after we won the bid.
"However, as the transaction neared completion and we went to inspect the building, we discovered it to be completely different than what we saw at the auction. The previous tenant, who left in April 2020, stripped everything from the building, and it now resembles a construction site.
"We returned to the auctioneer and informed them of the situation. We imposed a condition in the form of a written letter. It's either they revert to their original state when we first saw it, or they cancel the transaction and refund our RM6 million deposit. We haven't heard from the auctioneer yet," Lim said.
The Heritage Tower is being auctioned off again by Ng Chan Mau & Co, according to the firm's website.
The property's reserve price has been set at RM60 million, and the auction will take place next Thursday (May 12).