TYCOON Tan Sri Lee Kim Yew’s passion to grow Country Heights Holdings Bhd (CHHB) seems to never wane. The adviser-cum-deputy chairman has strategised plans to recharge the company, which he founded 30 years ago, so that it will regain its glory.
Come next year, CHHB may undertake a slew of corporate exercises, including asset injection and revaluation of its properties and 6,000-acre landbank, Lee tells The Edge in a three-hour-long interview at his posh lakeside country-style bungalow in Mines Resort City, Kajang.
“I have come up with a lot of plans for CHHB. After six months, CHHB should finish paying off its loans carried from 1997 … Within 36 months, I want to make our shareholders rich, including myself,” pledges the 59-year-old billionaire, who assumed the adviser’s post with a monthly fee of RM225,000, at the start of the year.
“I am advising the board of CHHB to give the shareholders 10% dividend in the next quarter. A profitable company with debts can still declare dividends. CHHB can afford to pay 10% dividend now.”
According to Lee, CHHB, after lying low since the 1997/98 Asian financial crisis, will see exciting times ahead. The medium-sized property company will be transformed into a property giant engaging in mega projects within 36 months.
Lee, who was forced to step down from the helm in 2007 due to CHHB’s weak financials, believes that he could bring the company into the league of the big boys by injecting his personal properties and assets into CHHB.
He plans to sell a 51% stake in all his projects to CHHB in exchange for the company’s shares and dispose of the remaining 49% stake to strategic partners such as major China-based property developers.
Lee’s projects include a RM3 billion Bukit Beruntung golf resort development covering 2,100 acres, rubber estates in Mentakab, Pahang, an oil palm plantation in Kelantan and 250 acres of lake/land in Mines Resort City.
“By injecting huge projects into CHHB, the company will expand faster and become a mega developer,” Lee says.
In fact, his focus now is on Mines Golf City in Bukit Beruntung. This project will see a 63-hole golf course, a driving range, specialist shops and a residential component consisting of 900 bungalow lots. Mines Golf City is a joint venture between CHHB and Lee’s privately owned company.
Lee says after CHHB has pared its loans, he will advise the company to go to the market to raise funds via corporate exercises. The new funds will be used to finance its new projects, including the RM11 billion Wellness City overseen by his second daughter.
Lee believes past negative news surrounding CHHB’s overgearing and his failed oil palm project would not affect CHHB’s fundraising exercises.
Instead, he chooses to see himself as a righteous and honourable businessman. “CHHB and I have never defaulted on any loan or asked banks to take haircuts even during our most difficult times.”
Although CHHB did apply to extend the maturity for its 1996/2009 bonds, downgrades by Rating Agency Malaysia scuttled its plan.
“As banks could no longer hold the uninvestable-grade bonds, I personally bought the papers from them before maturity. In fact, I should have a good image for being honourable as I did not choose the easy way out by allowing defaults, as many others did at that time.
“By right, I should have strengthened my reputation as a righteous and honourable person. I did all the right things, including paying off all scheme holders of the failed oil palm project. The karma I get now is tremendous,” says Lee, a staunch Buddhist, whose current assets are worth RM2 billion to RM3 billion.
Lee, once touted as the most innovative developer for pioneering the country-home concept, has stayed out of the limelight since 1997 due to negative news arising from CHHB’s heavy borrowings and his personal debts.
Coming from a humble background, Lee’s fortune began to rise when he started the development of high-end residences — Country Heights — in Kajang in 1986. News of the then prime minister Tun Dr Mahathir Mohamad becoming his first customer had helped attract corporate figures and leading politicians to make a beeline for new houses there.
However, his fast and furious expansion of CHHB and personal properties was halted by the Asian financial crisis. Most news generated during the crisis had not been favourable to Lee.
But now, this debt-free businessman is ready to bounce back and start a new lease of corporate life.
He has every reason to redeem himself.
CHHB, in which he holds about 60% equity interest, has slashed its loans to about RM200 million from a high of RM1 billion. On the personal front, Lee has sold Sunrise Bhd to settle his loans totalling RM380 million.
Last year, he paid off participants fairly in a failed oil palm growers’ scheme started by him in Kelantan in 2007.
In the frank interview, Lee indicates that he wants to steer CHHB again, although his eldest daughter is now the CEO.
He says he wants to be the chairman of CHHB when Gen (rtd) Tan Sri Mohamed Hashim Mohd Ali, a brother-in-law of Mahathir, retires. “At the moment, I am deputy chairman. One day, when Gen Hashim retires, I hope I can be the chairman.”
If all his plans for CHHB come to fruition, it will not be difficult for Lee to be on top.
CHHB shareholders had enjoyed dividend payments of 11% to 15% during CHHB’s glory days. But since 1997, no dividend has been paid.
CHHB’s share price hit a high of almost RM12 during its prime. But in 2009/10, it plunged to a low of 50 sen. It was not until late last year that there was a return of interest in the stock. CHHB shares ended at RM1.37 on Oct 9 versus its net asset value per share of RM2.96.
By injecting huge projects into CHHB, the company will expand faster and become a mega developer.” — Lee. Photo by Kenny Yap
This article first appeared in The Edge Malaysia Weekly, on October 13 - 19, 2014.