ST : Woman loses battle to save her property firm

Oct 14, 2010

Woman loses battle to save her property firm

Court orders winding up of debt-ridden Consult Asia

By K.C. Vijayan

A BUSINESSWOMAN here has failed to stop her debt-ridden firm, property developer Consult Asia, from being wound up.

High Court Judge Lai Siu Chiu, who ordered the winding up of Ms Florence Koh's firm, has approved the appointment of FTI Consulting as liquidators for Consult Asia.

FTI will move in to search and recover assets the firm may have, in order to settle its debts.

Ms Koh, 46, a former lawyer, has been battling for the last five months to keep a grip on her firm, which began in 1993 as a management consultancy and went on to become a developer. She had owned all but one of the firm's one million shares.

In December 2006, she approached DB Trustee (Hong Kong), a Hong Kong-based subsidiary of Deutsche Bank, to underwrite a loan of $54.6 million.

To secure the loan, she pledged Consult Asia's assets to DB as collateral.

When Consult Asia started defaulting on the loan in August 2008, DB Trustee sought repayment.

Receivers moved in that month, seizing two of the firm's key properties and selling them, retrieving $40.8 million.

One property was a refurbished conservation house with a six-storey extension in Balestier Road; the other was a plot of land at the junction of Still and Changi roads, which had been earmarked for development into a mall-cum-residence.

With $40.8 million in returns from the sale, DB Trustee was still owed some $26 million as of July, said court documents.

This outstanding sum led to Monday's move to wind up the firm.

The firm, through its lawyer Nicholas Narayanan, objected to the High Court move to liquidate it on the grounds that the two properties had been sold at less than what they were worth; Mr Narayanan said a valuation report estimated that they could have fetched about $75 million, which would have cleared its debts and forestalled the liquidation.

To Consult Asia's making a claim against DB Trustee for the undervaluation, DB's lawyers countered that Consult Asia should have sued the receivers and managers appointed to handle the sale if they were unhappy.

For Ms Koh, the court order is her third setback in five months. In July, she was ordered to pay a $20,000 fine for being in contempt of court; she had repeatedly failed to hand over records sought by receivers and managers. Two months before that, she was ordered to personally bear legal costs for two cases she lost in the Court of Appeal involving the firm.

vijayan@sph.com.sg