Aspial's CEO running for board seat at LCD Global

Singapore

ASPIAL Corporation chief executive Koh Wee Seng, the second largest shareholder of LCD Global Investments, is seeking a board seat at LCD at its annual general meeting this Thursday and now has the backing of Hong Kong billionaire Anson Chan.

Speaking to The Business Times last week, Mr Chan, chairman of property developer Bonds Group, said he is throwing his support behind Mr Koh, whom he deems a "savvy businessman who will do a good job protecting shareholders' interests" and whose property business under Aspial Corp has complementary synergies with LCD Global.

Based on the AGM resolutions tabled, Mr Koh is offering himself for election to replace LCD's outgoing director David Ong Mung Pang, who is retiring by rotation. Aspial's corporate secretary Lim Swee Ann is also running for a board seat at LCD if executive director Iris Wu is not re-elected.

BT understands that Bonds Group's investment fund Pyrrho Investments, which owns close to 3 per cent of shares in LCD Global, had intended to recommend Pyrrho's investment director Paul Cummins as an independent director candidate, but is unable to table a resolution since it does not own more than 5 per cent of the voting shares in LCD.

According to latest SGX filings, Mr Koh has a total deemed stake of 23.5 per cent in LCD Global, including a direct 14.5 per cent stake and a 9 per cent stake held through his family-controlled jewellery and property group Aspial Corp.

The media-shy businessman, who could not be reached for comment, has been increasing his stake in LCD Global since the Lum brothers attempted to take over LCD at S$0.17 a share in April. The Lums have since made an about-turn by selling a 29.5 per cent stake in LCD to the Singapore unit of Tokyo-listed JTrust Co Ltd at S$0.30 a share, keeping just 2.25 per cent.

As part of that deal, JTrust has appointed its president and CEO, Nobuyoshi Fujisawa, and general manager Shigeyoshi Asano to the LCD board as executive directors.

LCD owns resorts and hotels and serviced residences as well as an amusement centre chain and a deemed 44 per cent interest in property consultancy Knight Frank Singapore.

Mr Chan said: "The underlying assets of LCD Global are of good quality and good value, but there are now significant clouds on the horizon."

For one thing, it is unclear if the incoming Japanese executives have the relevant business contacts and knowledge to expand LCD's business and whether they have sufficient understanding of listing rules and corporate governance outside of Japan, said Mr Chan.

For instance, a recent suggestion by JTrust in a news report to finance LCD's expansion via JTrust's Nihon Hoshou credit guarantee and loans business may constitute related-party lending, noted Mr Chan.

Other concerns include the stalled InterContinental Phuket Rawai Beach Resort project, where redevelopment plans are on hold, and the integrated development in Xuzhou in China that LCD is developing with a Chinese partner.

"Joint ventures often go sour when the heads of the two JV companies change without consultation with each other," Mr Chan said, citing the exit of LCD executive chairman David Lum in September and the impending exit of LCD managing director Kelvin Lum.

Mr Chan claims that his attempts to reach the LCD management "have been fruitless". Still, given that Pyrrho has never paid for LCD shares above S$0.19 apiece, its investment in LCD is "still in-the-money".

Pyrrho typically makes US$50-100 million of equity investments in undervalued companies and seeks to raise their values through "trigger events" such as board activism or takeovers. Last year, it stoked a bidding war for London serviced-office provider MWB Business Exchange that went into insolvency, before UK office outsourcing group Regus tabled a higher counter-bid.

Prior to setting up Pyrrho Investments, Mr Chan worked at Nomura and Evenstar Fund Management, the Asia-focused hedge fund.