This article first appeared in The Edge Malaysia Weekly on February 19, 2018 - February 25, 2018

AS a Chinese proverb goes, two tigers cannot live on one mountain. This seems to be the case at DBE Gurney Resources Bhd. 

Early this month, the Perak-based poultry firm — founded by the Ding family — proposed to venture into property development. This should not come as a surprise, considering that DBE Gurney saw the entry of a new substantial shareholder — Doh Properties Holdings Sdn Bhd — with an 8.76% stake via the conversion of redeemable convertible notes (RCNs) last December.

Doh Properties is the vehicle of the Doh brothers, namely Datuk Doh Jee Chai, Datuk Marcus Doh Tee Leong and Datuk Jimmy Doh Jee Ming. The brothers are the sons of Datuk Doh Neng Chiong, a prominent businessman from Sitiawan, Perak.

The emergence of Doh Properties at DBE Gurney has diluted the shareholding of group managing director Datuk Alex Ding Seng Huat, who held a 10.94% stake as at March 24 last year, according to its latest annual report.

DBE Gurney operates six sets of incubators that generate 12 million hatching eggs a year as well as 11 broiler farms that produce 10 million chickens a year. It also owns HARUMi, the country’s first halal-certified local fried chicken brand, developed with Taiwanese expertise.

DBE stands for Ding Brothers Enterprise, a company co-founded by its executive chairman Datuk Ding Chong Chow and his brother Ding Choon Yung in 1986.

Today, Alex — Choon Yung’s son — is no longer a substantial shareholder of DBE Gurney. However, he remains as the managing director and the second largest shareholder with an estimated stake of 4.88%.

The recent business diversification and change of major shareholder in DBE Gurney has sparked speculation that the Ding family would exit the group. Rumours are also rife that DBE Gurney is looking to hive off its traditional poultry business back to the Ding family as the Doh family intends to transform the company into a pure property developer.

When contacted, Alex refuted the speculation, stressing that everything remains unchanged. “At this point in time, we (the Ding family) don’t have plans to exit the company. We will keep our shares and we don’t plan to sell the poultry business [back to my family]. We are still the shareholder of DBE Gurney and we are still on the board,” he tells The Edge over the phone.

He also clarifies that the emergence of Doh Properties at DBE Gurney is not a hostile takeover, saying that the Doh family is a friendly party.

“No, they (the Doh family) did not [ambush us]. They wanted to acquire some shares on the open market, some from the RCN conversion, so we welcomed them as a friendly partner. We have known each other for a long time and we have been in a good relationship for so many years,” he says.

“DBE Gurney is a public-listed company. If certain investors have confidence in our company, they can acquire our shares from the market in whatever way. They don’t need to ask for our consent, they have a free hand to do it. There is no issue on that.”

So, who are the Doh brothers?

The Doh family is well known among Sitiawan folk and has played a major role in shaping and developing the property sector in the fast-growing region.

Patriarch Neng Chiong founded the family’s flagship companies — Yik Wang Development Sdn Bhd and Setia Awan Holdings Sdn Bhd — in the 1980s.

Since his retirement in 2005, Setia Awan — mainly involved in property development, hotels and resorts, property management and plantation — has been helmed by his three sons.

The eldest son, Jee Chai, 46, is now a major shareholder in DBE Gurney with an indirect stake held through Doh Properties. It was reported that Jee Chai studied “econometrics” at the University of Bath, the UK, and he is in charge of plantation investment and Coral Bay Resort on Pulau Pangkor.

The second son, Marcus, 42, was appointed a non-executive director of DBE Gurney on Dec 20 last year. He was the marketing manager of Coral Bay Resort between 1998 and 2003 before he became the managing director and executive director of Setia Awan.

Meanwhile, Jimmy, 38, the youngest of five siblings that include two sisters, was redesignated executive director of DBE Gurney on Jan 16. He has more than 17 years of working experience in business development and property construction.

Alex points out that two representatives of the Doh family were invited to join the board of DBE Gurney as the Ding family feels that the group could tap their expertise in the property sector.

“The poultry business is still inside the group. Even though they (the Doh family) are holding a substantial stake now, they have no experience in the poultry business. That’s why we are going to work together to grow both businesses at the same time,” he says.

In a move to diversify into property development, DBE Gurney’s wholly-owned subsidiary, DBE Development Sdn Bhd, will team up with Misi Jutari Sdn Bhd to develop an affordable mixed-use project in Bota Kanan, Seri Iskandar, Perak, with an estimated gross development value of RM24.5 million.

Spanning 3.765ha, the project will comprise 10 single-storey semi-detached houses, 85 single-storey terraced houses, three double-storey shophouses and 16 single-storey shophouses.

DBE Gurney executive director Jimmy Doh said in a recent statement that the group intends to diversify further into construction-related businesses to complement its property development venture. “We will undertake construction work of identified projects/contracts to be procured from time to time.”

To recap, in April 2015, DBE Gurney proposed the issuance of RCNs to raise up to RM50 million.

It signed a conditional subscription agreement with Advance Opportunities Fund and Advance Capital Partners Pte Ltd to raise the amount in four tranches. The RCNs, which carry an interest rate of 2% per year, mature this year.

It is learnt that Advance Capital Partners has sold a minor portion of the RCNs to the Doh family while a major portion was converted into shares and subsequently offloaded on the open market.

Of the amount raised, DBE Gurney allocated RM20 million for the repayment of bank borrowings, RM20 million for future acquisition of poultry farms, upgrading of production facilities and construction of a cold room, and RM5 million for working capital. A sum of RM5 million was also allocated for expenses for the proposed corporate exercise.

To date, according to Alex, some RM38 million has been spent. “We still have about RM12 million reserved for our expansion, but we need to seek the authorities’ approval to vary the utilisation of the proceeds for the property business.”

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