Tycoon Oei Hong Leong further sells stake in Raffles Education; now owns less than 1%
Singapore
BILLIONAIRE Oei Hong Leong cut his stake in Raffles Education to 0.78 per cent amid an ongoing spat with the mainboard-listed private education service provider.
This followed his selling down from a stake of 10.16 per cent in Raffles Education on Oct 18 to 7.34 per cent. That sank the shares to a then 52-week low to S$0.061.
The counter shed 0.4 cent to a low of S$0.059 on Tuesday (Oct 26).
In spite of being against the firm's founder and chief executive Chew Hua Seng since 2017, Oei had been Raffles Education's substantial shareholder.
But his disputes with Chew burst into the public arena in recent weeks over corporate governance he alleged had fallen short, including the salaries Raffles Education paid to Chew and his family members working at the firm.
Several directors are now under investigation over the firm's two-month lag in the disclosure of Malaysia's Affin Bank's lawsuit in May against Raffles Education's Malaysian units for immediate repayment of RM410 million (S$133 million).
Meanwhile, it listed in its response to queries by frontline regulator Singapore Exchange Regulation Company (SGX RegCo) interested persons transactions (IPT) tables, and answered questions around significant related party transactions, interested party loans and valuation of properties.
On SGX RegCo queries on Chew's loans, the firm said that the debt as at FY2021 to June amounted to S$9.5 million, of which S$8.3 million went to Wanbo Institute of Science and Technology for a new campus in Hebei, China.
And Chew was owed S$10.9 million in total as at end FY2021, Raffles Education said.
SGX RegCo quizzed it on the valuation of its investment properties, from which the firm had recorded a fair value gain of S$13.8 million in FY2021.
These properties are located in Langfang City, China, and comprise both education facilities and commercial spaces such as a shopping mall and a bank. The properties were valued at 1.3 billion yuan (S$274 million) as at Jun 30, by independent valuer Cushman & Wakefield.
An income capitalisation approach was used in valuing the properties as most were held for letting and receiving rental income. The market comparison approach was also used as a check. This approach assumes the sale of each property in its existing state by referencing comparable sales evidence in the relevant market.
"The Langfang investment properties were valued at higher fair value due to the improved long-term income capitalisation profiles, taking into account the generally improved property market profile in Langfang," said Raffles Education in the filing on Oct 26.
It disclosed that the salary it paid to its former non-executive director Liu Ying Chun, who retired on Oct 30, 2020, was partially in his capacity as CEO of Oriental University City Hong Kong and partially in his capacity as a Raffles Education employee. No director fees were paid to him.
Finally, SGX RegCo asked its audit committee (AC) to comment on the independence and effectiveness of Raffles Education's internal audit. The AC responded by stating that the internal auditor Baker Tilly Consultancy (Singapore) had unfettered access to Raffles Education's documents, records, properties, management and the AC. Baker Tilly also does not provide any other services to the private school operator.
The AC reviews and approves the annual internal audit plans and reviews the scope and results of the auditor. Baker Tilly did not find any material control deficiencies and all minor control deficiencies were rectified, Raffles Education said.
