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Olive Tree Estates says key executive departures are 'very natural'

PROPERTY company Olive Tree Estates (OTE), in response to the query about a flurry of key executive departures, told the bourse regulator that the resignations came as it shifts its business focus and strategy to emerging markets and affordable housing.

Singapore Exchange Regulation (SGX RegCo) had asked Olive Tree Estates on Oct 25 for its sponsor and board's assessment on the resignations of its key management members, including business development director, chief financial officer (CFO), project manager and chief operating officer (COO) in the past year.

The Catalist-listed property player in a statement on Tuesday told the regulator: "This human-capital reorganisation is a very natural and necessary part of OTE's growth and development as the company continues to reshape its mission and sharpen its execution capability."

In the past year, the company saw a few key executives quitting, beginning with the resignation of the project manager in July 2018, and more recently, the departures of the CFO in August and business development director on Oct 23.

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OTE said that it has sharpened its focus to provide quality affordable housing to the masses in emerging markets as part of an integrated social impact solution strategy. And it does not intend to increase its exposure to the Singapore real estate market. In fact, it has been divesting its remaining inventory of industrial assets.

It has since ventured into the affordable housing market through joint ventures with a reputable Vietnamese developer, National Housing Organisation. In its initial development plan, it proposes to build more than 4,000 residential housing units and offer early childhood education, healthcare services, social services and various other amenities for the benefit of the communities.

"With the shift in business focus and strategy (and the divestment of our Singapore-based properties over time), some members of the team have left to pursue their personal interests while others with a more direct interest in and passion for the company's current mission have come on board," said OTE.

Also, it has hired a country director for Vietnam as well as a Vietnam-based manager to help oversee its growing exposure in the country. The company has hired and retained a number of senior and managerial personnel as well, to assist with its execution roadmap on the social impact front.

"It is the board's assessment that the company's new hires will enhance the growth profile of the company while the departure of the above-mentioned staff will not be detrimental to the group's operations. OTE's scope of business and influence continue to increase and the company is actively hiring to improve the depth of its bench strength across its new domains and business units," the company said.

The sponsor, OTE said, is aware of these developments and "concurs with" the board's assessment. Together with the nominating committee, the sponsor confirmed that no concerns were raised by the departing staff and no whistles blown in relation to the company.

On the regulator's question of finding replacements for the roles, OTE said that because it has shifted its focus and strategy, it needs to secure new competencies and talent to support its growth and expansion.

"This being the case, not all the roles necessitated replacements."

OTE shares ended flat at 6.2 Singapore cents on Tuesday.