COUNTRY Heights Holdings Bhd (CHHB) has announced plans to seek arbitration in Singapore regarding the forfeiture of land owned by its subsidiary Borneo Heights Sdn Bhd (BHSB), by the Sarawak state government.
The decision was disclosed by non-executive chairman Tan Sri Mohd Anwar Mohd Nor after the property developer’s 40th annual general meeting (AGM).
“We have submitted this for arbitration, which will take place on neutral ground in Singapore. However, the process has been postponed to early February next year,” he said.
CHHB has invested over RM100 mil in the Borneo Heights project over the past 28 years and is determined to recover a substantial amount of its losses through the arbitration proceedings.
The dispute originates from the Sarawak government’s decision in May 2021 to forfeit three parcels of land – Lots 48, 49, and 51 – under Section 33(5) of the Land Code. These parcels, intended for the development of the Borneo Highland Resort were reclaimed by the state due to a lack of development progress.
In 1994, the Sarawak government had allocated 2,071 hectares of land for the development of a holiday resort in Borneo Heights, Padawan, through a joint venture between CHHB and the Sarawak Land Custody and Development Authority.
According to title conditions, the land was to be used as a holiday resort and completed by September 1999.
Due to the failure to complete the development by 2020, and the deteriorated condition of existing facilities, the state government issued a notice to BHSB to remedy the breach of title conditions and complete the resort.
Moreover, BHSB did not comply with this notice, leading to the forfeiture of the undeveloped parcels in 2021. Lot 50 which had been developed into residential lots and sold by BHSB was not forfeited.
Following the forfeiture, BHSB and CHHB sought a court declaration to annul the order. However, in March this year, the Federal Court dismissed their application to appeal against the forfeiture order.
CHHB founder and adviser Lee Kim Yew asserted that the company has not received any compensation for the forfeited land despite constitutional provisions requiring compensation for forfeited land.
“According to the Federal Constitution, all forfeited land must be compensated. Despite this, we have not received a single cent.
“Shareholders have raised concerns about the lack of compensation over the past two years,” he said after the AGM.
Lee, who established Country Heights in 1984, stressed the importance of resolving the issue through arbitration in Singapore to uphold international confidence in the company.
“Both parties, CHHB and the Sarawak government, need to settle this matter to build international confidence, as a public-listed company must fully comply with business law,” he added.
Furthermore, Country Heights’ shares closed 1.5 sen or 5.1% lower yesterday (June 26), giving the group a market capitalisation of just RM83.4 mil. The outcome of the arbitration could have significant implications for the company’s financial health and investor confidence.
The proposed arbitration in Singapore represents a critical step for CHHB as it seeks to address the forfeiture of its land and recover its investments. However, it remains uncertain if the Sarawak government will accept the group’s arbitration proposal. – June 27, 2024
