The Kota Kinabalu Chinese Chamber of Commerce and Industry (KKCCCI) led by its President Datuk Michael Lui (pic) has rejected an earlier proposal by developer Arah Permai Sdn Bhd to buy Town Lease Land No. 017547027 for RM40 million at an Executive Committee meeting, Tuesday. 

The subject land was alienated by the State Government under ex-rotated Chief Minister Datuk Yong Teck Lee for the purpose of erecting thereon for use as a non-commercial multi-purpose assembly hall and any rezoning of land use to other kind of development has to be submitted to the appropriate authorities for approval with additional assessed land conversion premium payable.

Yong entrusted the development of the land to the SUCCC and the United Sabah Chinese Communities Association of Kota Kinabalu (USCCA) as two equal half-share co-owners.

These two landowners on Sept 30, 2013 signed an “Agreement to Develop” the said land with Arah Permai Sdn Bhd to erect a multi-storey mixed real estate structure under commercial zoning which attracted a land premium payable of RM9 million instead of just RM1,000 if developed as a community organisation premises. 

Since then, the land premium has been reduced to RM8,224,000 by the new administration for amendment for renewal of lease and conversion to commercial and hotel if paid by March 29, 2019.

By a majority of 33 to 42 exco members, absentees being outstation or indisposed, KKCCCI on July 9 resolved to reject any proposal that consider selling off the land for RM40 million over Arah Permai Sdn. Bhd’s suggestion that such an option be available to the company which has not fulfilled its part of the “Agreement to Develop” the said land since it was signed on Sept 30, 2013.

Lui opined that community common heritage property should rightly not be looked at from an aspect of financial gain from commercial transaction, but valued as a community asset that future generations can share and benefit from a sense of belonging rooted to this land, city, state and country.

KKCCCI’s interest in the matter is derived from its membership in the SUCCC which holds half share of TL 017547027 as the registered co-owner of the 1.110 hectares together with the other registered co-owner, USCCA.

The developer Arah Permai Sdn Bhd led Francis Goh Fah Sun, USCCA led by John Lim and the SUCCC led by Mohd Gan on Sept 30, 2013, reportedly signed the ‘Agreement to Develop’ the said land. 

To a question by Daily Express, the KKCCCI executive secretary denied strongly that late Mohd Sari Tan signed any such agreement, contrary to some misinformed public perception.

Lui said he was not present at a previous meeting which recorded all 24 members of the SUCCC and 14 out of 15 members of the USCCA had consented to the suggested option for Arah Permai to buy it for RM40 million, with the sole exception of the dissenting Kota Kinabalu Hakka Association which rejected such deal.

Now the KKCCCI officially and openly also oppose such deal. “The agreement contract signed must be respected,” Lui said.  

In the ‘Agreement to Develop’, it was described as “The parties are desirous of building a 16-storey commercial block with shopping malls, multi-storey car parks including a basement car park, multi-purpose hall and hotel suites.”

In a recent meeting between Arah Permai, SUCCC and USCCA, the parties agreed that the developer shall be given the right to amend the development and building plan in accordance with the ‘Agreement to Develop’ dated Sept 30, 2013. 

However, any amendment must be based on the original terms and conditions of the agreement.

The registered co-landowners (SUCCC and USCCA) having received a sum of RM300,000 each on April 23, 2019 (RM600,000 in total) as compensation for delay of one year from Oct 10, 2018 to Oct 10, 2019, agree that the ‘Agreement to Develop’ dated Sept 30, 2013 shall remain valid and effective.

It was stipulated that the project completion period shall be 42 months commencing from Oct 10, 2019.

However, should the developer send in a letter requesting a further extension of one year to start work at Oct 10, 2020 and pay another delay compensation of RM600,000, the project completion period shall be 42 months commencing from Oct 10, 2020.

If the developer is not able to start work as scheduled on or before Oct 10, 2020, the ‘Agreement to Develop’ dated Sept 30, 2013 shall be considered terminated without refund from the landowners.

If the developer does not send a legal letter to the landowners before Oct 10, 2019 to request for a further extension of time to commence work until Oct 10, 2020 and pay the compensation for the further delay of RM600,000, the landowners will issue a legal letter requesting that the developer to immediately start work within three months from the legal letter, otherwise the ‘Agreement to Develop’ dated Sept 30, 2013 shall be considered terminated without refund from the landowners.

SUCCC was represented by its President Tan Sri Andrew Liew Sui Fatt, Datuk Wong Kii Yii, Datuk Tang Lung Sing, Thong Yong Hung and legal advisor Datuk Lawrence Thien. SUCCC and USCCA agreed that the legal firm of Messrs. Alex Pang & Co. be replaced by Messrs. Chau & Thien effective May 16, 2019.

USCCA was represented by its President Datuk Susan Wong Siew Guen, Datuk Chua Soon Ping and Datuk Wong Yit Ming.

Arah Permai was represented by Datuk Francis Goh Fah Shun and legal advisor Thomas Ting.

The developer Arah Permai Sdn. Bhd. suggested another option to the landowners, whereby, if the developer opt to purchase the subject land before Oct 10, 2019, the landowners will sell the subject land to the developer at RM40 million.

The developer also indicated that the previous payment of RM2 million and other expenses need not be returned to it.

The developer undertakes to pay the land conversion premium and the permission for one transfer cost.

If the costs to obtain the permission for the one transfer is too high, then the developer may request the landowners to grant an absolute power of attorney to the developer to deal with the land until the completion of the project or issuance of strata titles.

KKCCCI rejected such offer and conditions suggested by the developer and insisted that Arah Permai Sdn. Bhd. work to fulfil its contractual duty to complete the delayed project as stated above within 42 months latest from Oct 10, 2020 or return the land to the landowners.