KUALA LUMPUR, Aug 29 — IOI Properties Group Berhad announced yesterday that its board of directors has decided not to accept the offer from Group CEO Lee Yeow Seng (LYS) to acquire Shenton 101 Pte Ltd, the entity responsible for redeveloping Shenton House, a commercial property in Singapore.

The board, excluding LYS and Datuk Lee Yeow Chor who abstained from the decision, concluded that proceeding with the acquisition would not be in the best interest of the company at this time, it said in a statement yesterday.

The decision was influenced by the Group’s existing investments and projects in Singapore, including the IOI Central Boulevard Towers, the W Residences — Marina View, and the upcoming W Singapore — Marina View luxury hotel.

Additionally, the board considered the recent capital commitments of IOIPG, such as the acquisition of W Kuala Lumpur, Courtyard by Marriott Penang, and Tropicana Gardens Mall, as well as the potential need for additional funding if the Shenton House project were to proceed.

To manage potential conflicts of interest arising from LYS’s involvement in the redevelopment through Shenton 101, IOIPG has entered into two management agreements with Shenton 101.

These agreements include a Project Management Agreement with Multi Wealth (Singapore) Pte Ltd, a subsidiary of IOIPG, to oversee the redevelopment of Shenton House, and a Property Management Agreement with Wealthy Link Pte Ltd, another IOIPG subsidiary, to manage the property.

The management agreements allow IOIPG to direct the development of the property in a way that mitigates competition between IOIPG and Shenton 101.

The agreements also provide IOIPG with a right of first refusal, giving the Group priority to acquire or match any third-party offer if Shenton 101 or LYS decides to sell any part of the property or their equity interest.

A global accounting firm has been appointed as a third-party adviser to benchmark the financial terms of the management agreements.

The adviser has confirmed that the terms are on normal commercial grounds and not detrimental to the interests of Multi Wealth and Wealthy Link.

As the management agreements are considered related party transactions under Bursa Malaysia’s listing requirements, IOIPG has stated that the percentage ratio of the transaction does not necessitate shareholder approval.

However, in line with good corporate governance practices, IOIPG plans to convene a general meeting at the request of LYS to address the conflict of interest situation.

This meeting will be announced at a later date.