Related party transactions for land deals in Johor

Little known property firm Wiley Development Sdn Bhd is buying three pieces of leasehold land with office and factory buildings in Johor from Kumpulan Perangsang Selangor (KPS) Bhd for a total of RM22.5 million.

The lands are located in Plentong, Johor Bahru, KPS said in a filing with Bursa Malaysia yesterday.

The firm is buying the properties from KPS’ indirect wholly-owned subsidiary, Toyoplas Manufacturing (Malaysia) Sdn Bhd (TMM).

Interestingly, it was revealed in the Bursa filing that Lai An is a person connected to Lim Hui Bian, 32, the chief executive officer of TMM.

Hui Bian is the daughter of Lai An, who in turn is TMM technical advisor.

It is unclear why Wiley Development is buying the properties that were acquired by TMM some 17 years ago, and have been vacant since February 2020.

The original cost of investment of TMM’s interest in the properties is RM4.2 million and this was incurred in September 2005, KPS said.

KPS, which is majority-owned by the Selangor government said the disposal is targeted to be completed by the fourth quarter of this year.

It said that upon completion of the transfer of the properties by TMM, Wiley Development intends to utilise them for investment purposes as an industrial property.

KPS added that the disposal to Wiley Development will enable the group to monetise its unutilised assets and generate cash to be channelled for other purposes including fund planned capital expenditures in line with its business plan.

The total disposal price of RM22.5 million was determined after arm’s length negotiations based on the net book value (NBV) of the properties which was RM7.5 million as at December 31, 2020, and the RM17.5 million valuation by a registered property valuer

The disposal would raise about RM20.3 million in net cash proceeds, of which RM16 million would be used by TMM to part-finance its expansion into Vietnam and the rest as the group’s working capital, it said.

KPS is expected to result in a net gain of RM12.8 million arising from the difference between the total disposal price and the NBV of the properties.

Source: NST