Friday, March 26, 2010

‘Suntec shares not held by church itself’

CITY Harvest Church (CHC) yesterday gave its first detailed comments about its $310 million stake in Suntec Singapore, two weeks after announcing that it had become a ‘co-owner’.

The statement, in response to The Straits Times’ queries, said its shares in the downtown commercial property were not held by the church itself, but by a separate ’special-purpose investment holding company’ it wholly owned.

The CHC statement gave no details of the investment company, but said it had acquired ‘an indirect minority stake’ in the holding company of Suntec Convention Centre. CHC had previously described the stake as ’substantial’ and ’significant’.

The church added in the statement that it would be uninvolved in Suntec’s daily operations and that it did not have ‘exclusive use of any areas’.

On the issue of taxation raised by the public who wanted to know whether CHC’s rental income from Suntec would be taxed, the church said its investment holding company was not a charity, and so did not qualify for tax breaks or other concessions.

It described its investment as ‘a prudent and considered decision’ that was a hedge against rental costs; its management board thus believed that the venture would not subject the assets and resources of the 33,000-strong independent church, a charity, to unacceptable risk.

The Commissioner of Charities, when asked yesterday whether this cleared up questions about the deal, said he was ’still seeking clarifications from CHC on this business venture’.

Suntec Singapore, also called Suntec Singapore International Convention and Exhibition Centre, was acquired by ARA Asset Management last year through a specially created fund for $235 million.

The fund’s investors are Suntec Reit, which is managed by ARA and owns 20 per cent, and a consortium of private investors which holds 80 per cent. CHC, through its investment holding company, is now part of that consortium.

CHC said its $310 million did not ’solely represent the cost of the minority stake’; the sum also includes rental, renovation and other costs. Its explanation comes as more questions are being raised about its Suntec stake.

As of yesterday, a March 8 posting on the subject on CHC senior pastor Kong Hee’s website had drawn about 470 comments, most thanking the church for snagging a downtown worship location. But several were critical of the church keeping mum on where the $310 million would go.

Church member Simon Teoh, a 36-year-old investment banker, for example, said he wanted to know how much would be spent on the lease and how long it would last. CHC declined to answer such questions yesterday on the grounds of a non-disclosure agreement with the consortium.

Calling for more accountability and transparency, Mr Teoh said he had two wishes – that the Commissioner of Charities would ask for the confidentiality clauses to be rescinded and that CHC would amend its Constitution so major business deals can be put to a vote among ordinary church members.

Source: Straits Times, 26 Mar 2010

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