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Hatten Land refutes claim unit under probe for Melaka project Harbour City

SINGAPORE - Hatten Land on Wednesday addressed a claim that its subsidiary was under probe by the Malaysian authorities over its Harbour City development in the Malaysian state of Melaka.

The Singapore-listed developer was responding to a report in China Press, a Chinese-language newspaper in Malaysia, which quoted one Ng Kian Nam, a buyer of property in Harbour City, making allegations against Gold Mart Sdn Bhd (GMSB), the developer of Harbour City. Mr Ng charged that GMSB had not applied for a housing developer licence for the project, and that the authorities had agreed to investigate GMSB under Malaysia’s Housing Development Act.

It added that GMSB would initiate legal proceedings against Mr Ng for his charges.

Plans for the mixed-use development were unveiled in 2018. Harbour City, to comprise a mall, theme park and three hotel blocks, is expected to span five million square feet in built-up area when completed.

The project was to have been opened in the first half of 2020, but construction was delayed because of a legal dispute between Hatten Land and the main contractor, and also because of the Covid-19 pandemic.

Referring to Ng’s allegation about GMSB’s alleged failure to apply for a housing developer licence, Hatten Land said on Wednesday that it did not have to do so under Malaysia’s Housing Development Act because the units sold were commercial ones, not residential ones.

It added that its buyers were aware of this, “as the relevant sale and purchase agreements clearly describe the nature and specifications of the said units”.

Giving an update on the stalled project, Hatten Land said: “(GMSB) is diligently working towards the resumption of construction at Harbour City, and aiming to complete the project as soon as possible.”

It did not provide details of a completion date.

The legal dispute in 2020 that stopped construction work involved a claim of RM100 million (S$29.7 million) by the main contractor China Construction Yangtze River over the construction and completion contract for the project. The total contract value was RM818.2 million.

Hatten Land said: “The main contractor ceased work and initiated legal proceedings. However, we have successfully resolved the legal dispute with the main contractor at this point.

“Additionally, the construction progress of Harbour City was further impacted by the Covid-19 pandemic.”

Hatten Land added: “Mr Ng Kian Nam’s statement has had a negative impact on our contractors’ willingness to resume construction work, thus resulting in further delay in the project’s development and completion. Additionally, purchasers have been unnecessarily alarmed.

“(GMSB) remains committed to completing the Harbour City project and ensuring the satisfaction and confidence of our valued stakeholders and investors.”

The Straits Times reported that in March, at least 80 people, including Singaporeans, had organised a protest against Hatten Land at one of its developments, ElementX Mall in Melaka.

The buyers said they were unhappy with the long delay and that they were having to continue paying for their investments in the meantime.

In February this year, Hatten Land announced that it would terminate an existing agreement it had with Tayrona Capital Group over the proposed divestment of GMSB. The developer said Tayrona Capital Group did not comply with its obligations, including paying a consideration to GMSB. THE BUSINESS TIMES