HPL gave $24.6 million in advances to entities in which Ong Beng Seng has deemed interest

HOTEL Properties Limited (HPL) said on Tuesday (Aug 22) that it had provided S$24.6 million in advances to two jointly controlled entities in which its managing director, Ong Beng Seng, is deemed to have an interest.

Of this amount, S$18.2 million was made to Great Western Enterprises, in which Ong and board member David Fu have a 15 per cent beneficial interest each. Another S$6.4 million was made to HPL Dolomites (UK), in which Ong has a 20 per cent beneficial interest.

Ong has been embroiled in a corruption probe since July, when he was arrested by the Corrupt Practices Investigation Bureau.

The amounts were revealed by HPL in a response to the Singapore Exchange Regulation (SGX RegCo), which had asked it to give a breakdown of various transactions and their nature in the first fiscal half of the year ended Jun 30, 2023.

The query came after HPL posted an increase in “amount due from associates and jointly controlled entities” to S$56.5 million as at Jun 30, from S$49.1 million as at Dec 31, 2022. Along with this was a rise in its associates and jointly controlled entities’ non-current assets to S$956.6 million as at Jun 30, from S$912.7 million as at Dec 31, 2022.

Hitherto, the company had only attributed them to investments during the period, including equity contribution and advances of S$25 million to associates and jointly controlled entities, in which certain directors are deemed to have interest.

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HPL on Tuesday noted that its advances to other associates and jointly controlled entities amounted to S$18.8 million, while exchange realignment on advances came up to S$18.4 million. The company did not, however, give a further breakdown for these figures.

Nevertheless, HPL disclosed an S$11.5 million loss attributed to the share of results and reserves of associates and jointly controlled entities for H1 2023.

In a clarification note on Wednesday, HPL reiterated that all joint venture (JV) partners, including Ong, contributed in proportion to their equity. This was stated in a footnote in Tuesday’s disclosure.

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Elaborating, HPL said the advances were in relation to JV projects, which needed additional funding.

HPL then disclosed that Great Western Enterprises needed additional funding for its project at Paddington Square in London. Given that Ong and Fu each hold a 15 per cent equity in the JV, they have had to fork out S$3.9 million each, the company specified.

HPL also revealed that HPL Dolomites needed contributions to fund the acquisition of the remaining 10 per cent of the share capital of Alpina Dolomites SRL by HPL Dolomites (UK). Given Ong’s 20 per cent equity, he has had to contribute S$1.6 million, it stated.

Contributions from HPL for its 70 per cent share in Paddington Square and 80 per cent share in Alpina Dolomites amounted to S$18.2 million and S$6.4 million respectively, adding to a total of S$24.6 million.

Shares of HPL closed 0.6 per cent or S$0.02 higher at S$3.52 on Wednesday.