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Court dismisses Perennial's appeal in Capitol case

Business Times
14 Nov 2017
Lee Meixian

There will be no winding up of the joint entities between Perennial Real Estate Holdings and Pontiac Land affiliate Chesham Properties, which co-developed the Capitol integrated development project. These entities jointly own its hotel, shops, residential units and theatre.

The Court of Appeal on Monday dismissed Perennial's appeal against the High Court's dismissal earlier this year declining its application to wind up the three joint entities - Capitol Investment Holdings, Capitol Retail Management and Capitol Hotel Management.

These are equally owned by Perennial and Pontiac Land (through Chesham).

A Chesham spokeswoman said the company is "pleased with the decision".

"The Court of Appeal affirmed the High Court's judgment that it would not be just and equitable to wind up the Capitol entities or to make any such orders because there is an exit mechanism available to Perennial under the respective constitution of the Capitol entities."

One exit mechanism is the option for one party to offer to sell its shares to the other at a fair value.

Perennial also responded in a filing to the Singapore Exchange that it and its entities "are considering their options and will make the necessary announcements where there are material developments on this matter".

Perennial's shares closed half a cent lower at S$0.88 on the stock market.

In April last year, Perennial had sought court action to either wind up the three joint entities or have the court order a sale or buy-out. In March this year, it lost the case and therefore made its appeal.

Full grounds for the Court of Appeal's decision have not been released yet. The Court of Appeal on Monday said it will hand down its detailed judgment explaining its rationale at a later date - a process that could take a few months, depending on the court's schedule and how much detail it plans to get into.

This outcome from the Court of Appeal is also final, insofar as these proceedings are concerned.

In an earlier judgment, a High Court Judge had noted that the iconic heritage property had "fallen into economic slumber" and its potential had been compromised after the soured relationship between the two companies stunted the progress of the development.

The partnership deteriorated to the point that the management committee had difficulty even deciding the colour scheme for the facade.

The impasse also led to a delay in the opening of the six-star hotel, The Patina, which got its temporary occupation permit in October 2015, but remains unopened as Perennial CEO Pua Seck Guan allegedly refused to countersign payments for various expenses incurred by the hotel.

The Straits Times reported that the hotel needed at least another S$11.5 million to be pumped in to start operations.

TSMP Law Corp's Thio Shen Yi represented Perennial, while Davinder Singh and Pardeep Singh of Drew & Napier represented Chesham.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.