HPL shares tumble with Ong Beng Seng caught up in Iswaran-linked CPIB probe

SINGAPORE — Shares of Hotel Properties Limited (HPL) sank when trading opened on Friday (July 14), hit by news that its managing director, co-founder and controlling shareholder, Ong Beng Seng, had been issued a notice of arrest by the Corrupt Practices Investigation Bureau (CPIB).

The shares fell 21 cents, or 5.4 per cent, to $3.65 when the Singapore market opened. They regained some ground to trade at $3.71, down 15 cents or 3.9 per cent, at 10.19am. The counter, which is thinly traded, saw 174,000 shares trading hands.

At 7.30am on Friday, HPL said in a filing to the Singapore Stock Exchange that Mr Ong is helping CPIB with its investigation in relation to his interactions with Transport Minister S. Iswaran. No charges have been filed against Ong, who is out on bail of $100,000.

Ong will be travelling from July 14 and will surrender his passport to CPIB upon his return to Singapore.

Mr Iswaran has been told by Prime Minister Lee Hsien Loong to take leave of absence until the investigations are completed.

"It's a knee-jerk reaction to the notice of arrest for Ong" said a stockbroker who declined to be named, adding that this was not Ong's first brush with controversy involving politicians.

As managing director, Ong, 77, is responsible for all aspects of strategic planning and business development activities of the group. He also has a total interest of 60.47 per cent in HPL as of June.

HPL led consortium Cuscaden Peak, which included Temasek units CLA and Mapletree, to acquire the real estate assets of Singapore Press Holdings in May 2022.

But its core business is a portfolio of 39 hotels and resorts across 15 countries, namely Singapore, Malaysia, Thailand, Indonesia, Maldives, Seychelles, Vanuatu, the United States, Bhutan, Tanzania, South Africa, Vietnam, Britain, Italy and Sri Lanka.

HPL has interests in hotels under prestigious hospitality brands such as Four Seasons Hotels and Resorts, Como Hotels and Resorts, InterContinental Hotels, Six Senses Hotels and Resorts, and Marriott International. In addition, the group also manages its own portfolio of hotels under well-established brands such as Hard Rock Hotels and Concorde Hotels and Resorts.

In Singapore, its luxury residential developments include Tomlinson Heights, Robertson Blue, Cuscaden Residences, Scotts 28, Nassim Jade and Four Seasons Park, as well as through joint ventures with CapitaLand, The Interlace and the d'Leedon condominiums. The group also owns commercial and retail properties such as Forum The Shopping Mall and Concorde Shopping Mall.

In London, it boasts four joint-venture freehold developments, namely Burlington Gate, Holland Park Villa, Paddington Square and Bankside Yards.

HPL also runs Hard Rock Cafe outlets in South-east Asian countries, including Singapore, Malaysia, Indonesia and Thailand.

In 1977, Ong joined his father-in-law, Peter Fu, in Kuo International as an oil trader. The move thrust him into hotel and property development. In 1980, Hotel Properties was formed as a private limited company to purchase the Hilton hotel for $72 million. In 1982, the company was listed on SGX's mainboard.

HPL has been among the neglected property counters, occasionally getting a new lease of life thanks to the wave of privatisations and takeover attempts.

Speculation has swirled for two decades that HPL could undertake a mega development involving its prime Orchard Road assets around Forum The Shopping Mall, the voco Orchard Singapore hotel, and HPL House. The three "jewels" sit on an estimated 150,000 square feet of freehold land, on a prime corner of Orchard Road and Cuscaden Road.

HPL also owns a 30 per cent stake in Cuscaden Peak, which owns Paragon Mall and also a stake n a $1 billion Datacentre in Genting Lane.

Ong is no stranger to takeovers, but he is usually the hunter.

Some years ago HPL and Cycle & Carriage wrested control of Malayan Credit (renamed MCL Land) from Malaysia's Teo family.

In 2014, a private consortium headed by Ong offered to take over HPL, a move that could have led to it being delisted.

ALSO READ: Transport Minister Iswaran to remain in Singapore during leave of absence: PMO

This article was first published in The Straits Times. Permission required for reproduction.