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Judicial managers have 60 days to present proposal
THE High Court has approved an appeal by cash-strapped Poh Lian Construction to have judicial managers appointed.
The decision gives it some respite from creditors and enables it to avoid being wound up.
The 45-minute court hearing yesterday was witnessed by seven of Poh Lian's creditors, ranging from subcontractors to property developers.
Judicial managers Tam Chee Chong and Andrew Grimmett of audit firm Deloitte have 60 days to present a recovery proposal to the creditors. They will work to ensure a smooth transition for stalled projects, investigate alleged mismanagement of funds and source investors to buy out Poh Lian.
The firm's assets include a Building and Construction Authority class A1 licence, which allows it to bid for projects with no upper limit.
An affidavit filed by the judicial managers on Tuesday stated that Poh Lian's debt rose to $92.3 million in February, up from $60.6 million a month earlier. The figure excludes $82 million in contingent liabilities that the firm might owe developers if it fails to complete projects by the deadlines agreed on. Poh Lian, a unit of United Fiber System, was building some private and public residential projects and upgrading St Anthony's Canossian Secondary School before work stopped last month.
City Developments terminated its contract with Poh Lian and appointed Woh Hup as the new main contractor for H20 Residences on April 3.
Developer GuocoLand terminated both the Goodwood Residence and Sophia Residence projects with Poh Lian.
GuocoLand said it is informing buyers of units at Goodwood Residence that it has appointed Lian Beng Group as the main contractor. Work resumed on April 2. The project will get its temporary occupation permit no later than in the fourth quarter of this year, said a spokesman for the developer.
GuocoLand is in final talks with a new contractor for the Sophia Residence project and will update buyers when the deal is complete.
It will engage independent consultants to ensure that quality is not compromised on either project.
Poh Lian was also in charge of building two Housing Board Build-to-Order projects - Segar Grove and Senja Gateway. HDB said yesterday that Segar Grove's estimated completion date as communicated to buyers is in the fourth quarter.
It terminated its contract with Poh Lian yesterday and is seeking a new contractor. It said Senja Gateway should be finished in the third quarter.
HDB is working with the judicial managers to see how the work can continue, while sourcing for an alternative contractor should the judicial managers' proposal fall through.
[email protected]
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Background Story
An affidavit filed by the judicial managers on Tuesday stated that Poh Lian's debt rose to $92.3 million in February, up from $60.6 million a month earlier.
The figure excludes $82 million in contingent liabilities that the firm might owe developers if it fails to complete projects by the deadlines agreed on.
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Judicial managers suspect mismanagement at firm
APPARENT acts of mismanagement have been uncovered at Poh Lian Construction after it sank into a multimillion-dollar black hole, a court heard yesterday.
These acts will be investigated further, said Mr Tan Chuan Thye, representing Poh Lian's then interim judicial managers, Mr Tam Chee Chong and Mr Andrew Grimmett.
The two were appointed judicial managers at the High Court hearing.
"The interim judicial managers discovered that there appears to have been various acts of mismanagement. But investigations are still in the early stages and they will need more time," Mr Tan said.
The two men filed a 109-page affidavit with the court on Tuesday, detailing some of the alleged mismanagement.
It referred to two former Poh Lian employees: former senior manager for operations Thomas Ng and ex-chairman and executive director Wisanggeni Lauw.
It said Mr Ng was in charge of engaging labour suppliers to secure foreign workers for the Goodwood Residence project.
He agreed to pay the workers an hourly rate regardless of the work done, contrary to industry practice.
This payment scheme was in place for 11 months from March 2012 to February 2013.
In this period, the $21.9 million paid to labour suppliers alone exceeded the total profit Poh Lian could have made on the project - about $9.2 million.
The document stated: "There were suggestions that Mr Ng ignored internal costing analysis and reviews on the question of the engagement of the labour suppliers."
It was also stated that Mr Ng reported directly to Mr Lauw instead of his immediate superior, then chief operating officer Leong Chee Keng.
Investigations are at a preliminary stage and the judicial managers may decide, with Poh Lian's creditors, to take legal action against the firm's previous management, said the court papers.
In an affidavit filed last month, one of Poh Lian's directors, Mr Peh Pit Tat, said he was shocked to find out last October that three projects were incurring substantial losses.
The condos were Sophia Residence, Goodwood Residence and Bishopsgate Residences.
Mr Peh said Poh Lian had submitted tenders at uncompetitive prices.
"In the Sophia (Residence) project, the previous management failed to take into account the additional costs that would be payable to the sub-contractors for prolonged excavation works at the development site.
Mr Peh also said that Mr Lauw had resigned from the company in January, while Mr Ng was fired in the same month.
THE High Court has approved an appeal by cash-strapped Poh Lian Construction to have judicial managers appointed.
The decision gives it some respite from creditors and enables it to avoid being wound up.
The 45-minute court hearing yesterday was witnessed by seven of Poh Lian's creditors, ranging from subcontractors to property developers.
Judicial managers Tam Chee Chong and Andrew Grimmett of audit firm Deloitte have 60 days to present a recovery proposal to the creditors. They will work to ensure a smooth transition for stalled projects, investigate alleged mismanagement of funds and source investors to buy out Poh Lian.
The firm's assets include a Building and Construction Authority class A1 licence, which allows it to bid for projects with no upper limit.
An affidavit filed by the judicial managers on Tuesday stated that Poh Lian's debt rose to $92.3 million in February, up from $60.6 million a month earlier. The figure excludes $82 million in contingent liabilities that the firm might owe developers if it fails to complete projects by the deadlines agreed on. Poh Lian, a unit of United Fiber System, was building some private and public residential projects and upgrading St Anthony's Canossian Secondary School before work stopped last month.
City Developments terminated its contract with Poh Lian and appointed Woh Hup as the new main contractor for H20 Residences on April 3.
Developer GuocoLand terminated both the Goodwood Residence and Sophia Residence projects with Poh Lian.
GuocoLand said it is informing buyers of units at Goodwood Residence that it has appointed Lian Beng Group as the main contractor. Work resumed on April 2. The project will get its temporary occupation permit no later than in the fourth quarter of this year, said a spokesman for the developer.
GuocoLand is in final talks with a new contractor for the Sophia Residence project and will update buyers when the deal is complete.
It will engage independent consultants to ensure that quality is not compromised on either project.
Poh Lian was also in charge of building two Housing Board Build-to-Order projects - Segar Grove and Senja Gateway. HDB said yesterday that Segar Grove's estimated completion date as communicated to buyers is in the fourth quarter.
It terminated its contract with Poh Lian yesterday and is seeking a new contractor. It said Senja Gateway should be finished in the third quarter.
HDB is working with the judicial managers to see how the work can continue, while sourcing for an alternative contractor should the judicial managers' proposal fall through.
[email protected]
--------------------------------------------------------------------------------
Background Story
An affidavit filed by the judicial managers on Tuesday stated that Poh Lian's debt rose to $92.3 million in February, up from $60.6 million a month earlier.
The figure excludes $82 million in contingent liabilities that the firm might owe developers if it fails to complete projects by the deadlines agreed on.
--------------------------------------------------------------------------------
Judicial managers suspect mismanagement at firm
APPARENT acts of mismanagement have been uncovered at Poh Lian Construction after it sank into a multimillion-dollar black hole, a court heard yesterday.
These acts will be investigated further, said Mr Tan Chuan Thye, representing Poh Lian's then interim judicial managers, Mr Tam Chee Chong and Mr Andrew Grimmett.
The two were appointed judicial managers at the High Court hearing.
"The interim judicial managers discovered that there appears to have been various acts of mismanagement. But investigations are still in the early stages and they will need more time," Mr Tan said.
The two men filed a 109-page affidavit with the court on Tuesday, detailing some of the alleged mismanagement.
It referred to two former Poh Lian employees: former senior manager for operations Thomas Ng and ex-chairman and executive director Wisanggeni Lauw.
It said Mr Ng was in charge of engaging labour suppliers to secure foreign workers for the Goodwood Residence project.
He agreed to pay the workers an hourly rate regardless of the work done, contrary to industry practice.
This payment scheme was in place for 11 months from March 2012 to February 2013.
In this period, the $21.9 million paid to labour suppliers alone exceeded the total profit Poh Lian could have made on the project - about $9.2 million.
The document stated: "There were suggestions that Mr Ng ignored internal costing analysis and reviews on the question of the engagement of the labour suppliers."
It was also stated that Mr Ng reported directly to Mr Lauw instead of his immediate superior, then chief operating officer Leong Chee Keng.
Investigations are at a preliminary stage and the judicial managers may decide, with Poh Lian's creditors, to take legal action against the firm's previous management, said the court papers.
In an affidavit filed last month, one of Poh Lian's directors, Mr Peh Pit Tat, said he was shocked to find out last October that three projects were incurring substantial losses.
The condos were Sophia Residence, Goodwood Residence and Bishopsgate Residences.
Mr Peh said Poh Lian had submitted tenders at uncompetitive prices.
"In the Sophia (Residence) project, the previous management failed to take into account the additional costs that would be payable to the sub-contractors for prolonged excavation works at the development site.
Mr Peh also said that Mr Lauw had resigned from the company in January, while Mr Ng was fired in the same month.
