Property developer CapitaLand has disclosed recently that Liew Mun Leong, the company’s CEO and president, had paid around $3.74 million for a penthouse situated at the 23rd level of the Interlace project.
It is not unusual for property firms’ directors to acquire units. Media reports do not usually pick up many of these transactions though property firms have disclosed acquisitions on the Singapore Exchange website.
Property consultants consider such purchases by interested persons and directors as a sign of confidence in the project. Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic said: “When the market is hot, directors and their immediate family members usually get onto the VVIP list and are able to pick the choice units.”
Under listing rule 910 of the Singapore Exchange, the sale of a unit made by a listed firm to its own director would be considered as an ”interested person transaction”, a type of transaction that should be disclosed. No disclosure, however, is necessary unless the purchases made by the director are worth three percent or more of the company’s net tangible asset value.
Fundamentally, disclosure and review of the purchase carried out by the audit committee of the company is needed to show that the transaction has not hurt the interest of minority shareholders and the company as a whole.