Mayor Datuk Yeo Boon Hai says he has directed Phase 2 of Kota Kinabalu Waterfront project to be put on hold until the matter concerning unpaid rental raised by over 230 investors is resolved.

"Based on the complaints received on the non-payment of the outstanding rental and others, I have directed Phase 2 of the project to be put on hold until the matter is resolved," he said in a statement, Tuesday.

He said a letter was issued on MOnday (May 28) to the developer, Sunsea Development (Sinsuran) Sdn Bhd by City Hall's lawyer, CSY Advocates & Solicitors, and a copy was given to Datuk C. K. Tan as the purchasers' representative.

Calling themselves "Oceanus 50", the investors of the Kota Kinabalu Waterfront project were seeking justice over RM38 million of unpaid rental owed to them by the developer.

THe project is a joint venture between Sunsea and DBKK Holdings Sdn Bhd (DBKK) which owns the land.

Responding to their claims, Yeo said it was unfortunate that the private rental agreement with the purchasers has not been fulfilled by the said company.

"Sometime in June 2016, the purchasers came to see me and briefed me on the problems faced by them. As I had just been appointed as the Mayor, the matter with regards to the Phase 2 of the project was not discussed and the question of assignment of Phase 2, as stated in their recent press statement, dud bit arise because I was new then. However, I did promise to look into their problems,"he explained.

He pointed out that as far as the project with Sunsea Development Sdn Bhd is concerned, City Hall has two main roles.

"Firstly, being a statutory body, City Hall must ensure that the building is constructed and completed in accordance with all laws, by-laws and other regulations.

"Secondly, as the land owner, City Hall would like to ensure the completion of the whole project so that the purchasers and investors can move in to do business. In this respect, I am happy that the Oceanus Phase 1 has been completed.

"In so far as the Phase 2 is concerned, City Hall has imposed that the development was dependent on the developer of Oceanus in settling the outstanding rental with purchasers and others. Based on the complaints received on the non-payment of the outstanding rental and others, I have directed Phase 2 to be out on hold until these matters are resolved," he said.