Developer HLH walks away from $14.9 million deal for 1.3 hectares at controversial site. It’s not a setback, Shukaku says
Singapore-listed developer HLH, which had entered into an agreement to purchase 1.3 hectares of land at Boeung Kak lake has withdrawn from the deal, according a company statement.
A deal worth $14.9 million was struck between HLH and Cambodian developer Shukaku on June 19 for the purchase of the land at the controversial Boeung Kak lake site, with the intention to develop the area into business and shopping hub. But a December 17 statement from HLH posted on the Singapore stock exchange says the deal is now off.
“The Board wishes to announce that the seller and the buyer have mutually agreed and entered into a termination agreement on 16 December 2014 to terminate the SPA (Sales and Purchase Agreement) due to commercial reasons, strictly without any liability or breach of either party,” the announcement reads, without going into further detail.
A deposit of $1.46 million has been returned to HLH, the statement says.
HLH did not respond to a request for comment yesterday, but the firm’s executive deputy chairman and chief executive Johnny Ong Bee Huat had previously said that the company needed to complete a due diligence process before the deal could be finalised.
Shukaku, chaired by ruling Cambodian People’s Party Senator Lao Meng Khin, was awarded a 99-year lease of more than 100 hectares in the area in 2007, and soon after began filling in Boeung Kak lake with sand.
The lake has been the site of years-long protests, with some 20,000 people forced from their homes.
Last month, seven women were sentenced to one year in jail after they blocked the road outside City Hall in protest against the regular flooding of their homes, which are located close to the development site.
In August, protestors demonstrated at the Singaporean Embassy in protest of the HLH land purchase they say was in conflict with the government’s agreement with Shukaku to develop the land.
Boeung Kak representative Chan Puthisak yesterday congratulated HLH on their decision to pull out of the land purchase, suggesting the community’s activism played a role.
“The company [HLH] may not know that Shukaku cannot sell the land before they entered into the purchase agreement, but after the demonstration, they now know and they terminate it,” he said.
“It shows they are responsible, transparent and a company compliant with international standards,” Puthisak said.
Prime Minister Hun Sen agreed in 2011 to carve out 12.44 hectares of Shukaku’s concession for evictees, yet dozens of families are still awaiting land titles from City Hall.
“We are not banning any development on the site, we just ask for transparency from the development. Any deal [between Shukaku] should be temporarily paused until [there is] settlement for Boeung Kak residents,” Puthisak added.
The withdrawal of HLH comes just weeks after Shukaku announced that the company is ramping up development at Boeung Kak lake, with plans for their Phnom Penh City Centre project – an “eco-city” set to include hotels, housing, a business centre and more.
“There are no financial issues, and the main projects are well under way and on schedule,” Amu Pillay, the company’s head of corporate communications and public relations told the Post on December 2.
“The construction of drainage work will start in [December] 2014. The entire drainage works is expected to complete by 2017.”
Pillay acknowledged at the time that the firm could have also better managed the relocation process, but the firm was now focused on the benefits the project would bring – including jobs and park space for the community.
Contacted yesterday, Pillay did not elaborate further on the reasons for the HLH withdrawal apart from saying: “The termination of this agreement will not pose a setback to the development of the project.”