KRISTAL GOLF RESORT
MINUTES OF EXTRAORDINARY GENERAL MEETING (EGM) OF MEMBERS
Date : 9 September 2007
Time : 2.30 p.m.
Venue : Green House Coffee House & Restaurant, Bukit Tambun, Simpang Ampat
Present
Name - Designation
1 Mr Billy Yeoh - Pro-Term Action Committee
2 Mr Shotaro Ishihara - M.D. Suasa Kristal (M) Berhad
3 Mr Tan Beng Hong - PB Trustee Services Bhd
4 Mr Ravi Krishna Iyer - PB Trustee Services Bhd
5 Ms Jothirani Krishnan - PB Trustee Services Bhd
6 Ms Teh Shu Ting - PB Trustee Services Bhd
7 Ms Christine Peter - PB Trustee Services Bhd
Members attending in person 159
Valid Proxies 59
Total Attendance 218
Minutes of the meeting
The meeting was called to order t 2.45p.m. by Mr Ravi Krishna Iyer. He welcomed all members who were present. The quorum for the meeting was confirmed with 159 members present in person and 59 valid proxy forms received.
Appointment of chairman for the EGM
Mr Billy Yeoh was appointed to Chair the EGM proceedings
1. Purpose of the EGM
1.1 Mr Billy Yeoh informed members that PB Trustee Services Berhad (the “Trustee") has called for this EGM to explain to members on the events that have and transpired that have led to the current status of the Kristal Golf Resort (the “club”). Mr Ravi briefed the members on behalf of Trustee.
1.2 The members would also be briefed by Mr Shotaro Ishihara, the M.D. of Suasa Kristal (M) Bhd (the “operator “) on his explanation with respect to the whole episode of events.
1.3 Thereafter, the forum would have to elect and endorse a formal Action Committee which would then act on behalf of the members, be given the full mandate to decide and take appropriate actions to protect and safeguard the interest of members in regard to the ongoing crisis in the Club. The Action Committee would also be given the powers to collect contributions from members to fund all activities and action to be pursued and liaise with Trustee accordingly.
1.4 Thereafter, resolutions from members on the further course of actions to be pursued would be tabled/passed, to be acted upon by the Action Committee and Trustee.
2. Briefing by Trustee
2.1 Mr Ravi from the Trustee informed members that on 23/07/2007 (Monday) morning. Trustee had received a fax notice from M/s MustaphaRaj Sdn Bhd (the "R&M") informing that they have been appointed as receivers and managers of Suasa Kristal (M) Bhd (the "operator" of the club) by Pengurusan Danaharta Nasional Berhad ("Danaharta") as holders of Debenture created on the properties on which th 1ub is situated.
2.2 Trustee was shocked with the fax notification and sought to obtain further information & c1arifcation from the R&M. Trustee was unable to speak to the persons in chargeuntil 30/08/2007. afterwhich, they managed to speak with a representative of the R&M who verbally recited the chronology of events to the Trustee.
2.1.1 The properties of the club had been charged to a financial institution in the 1990’s by the operator for some loan facilities. which had turned non-performing during the financial crisis of the late 90’s.
2.1.2 Subsequently, the loans and the security thereby created had been taken over by Danaharta under a special statute governing the operations of Danaharta.
2.1.3 Danaharta has been sourcing for potential purchasers for the property through advertisements in their property magazines over the years. They had sold the club’s properties by private treaty pursuant to powers given under Pengurusat Danaharta Nasional Act and have now appointed the R&M to take possession, vacate the occupants and handover vacant possession to the purchaser.
2.1.4 Thus, upon instructions from Danaharta, th R&M have moved in and sealed the club premises, secured the property for eventual hand-over to the purchaser. The property would thus not be used as a golf course thereafter.
2.3 Trustee further inquired on the status of the members’ interests pursuant to Kristal Golf Resort. It was informed that the members would have no legal rights against Danaharta, or the property. Their claims of interest would be against the operator, as a company, and they would stand as unsecured creditors to seek any remedy to their rights.
2,4 Further requests to the R&M for funding to organize the EGM of members, seeking their attendance in the EGM. request for information on the purchaser and a copy of the Sale & Purchas agreement, have all been declined and the R&M have firmly informed Trustee that they are not obliged to accede to any such requests from members or Trustee.
2.5 Question by Mr Ong Cheow Chan (M’ship No.30339)
What are the roles and responsibilities of the Trustee in protecting the interest of the members of the club?
The Trustee has a duty to ensure the Operator complies with the guidelines issued by CCM on operations of the club, compliance with all the terms and clauses in the Trust Deed and generally to ensure the club’s operations are ongoing as nonnal.
However, the trustee’s legal powers are limited, as they cannot inquire into the internal financial affairs, or management of the Operator at company level. Neither does the Trustee have the power to control or regulate the decisions by the Operator as a Company with regards to management the company’s internal financial affairs, including borrowing decisions or encumbrances on properties owned by the company.
Trustee regulates the Operator’s obligations to the members, with regards to the provision of Clubs facilities as promised under the Trust Deed and management of the trust funds covered in the Trust Deed.
2.6 Trustee informed members that the Club membership currently stood at 800 active members, inclusive of 300 Japanese members. Besides this, there were 600 members in default. The club’s Sinking Fund stood at RM3,003-00 as at 31/08/2007. The Operator had not remitted the sinking funds to the Trustee for the last 7 years. The operator had utilized the funds for repairs and replacements to the club’s facilities.
2.7 In addition, the Trustee is currently owed Trustee fee of RM1O,500 and apart from this, the Trustee has thus far incurred expenses and disbursements of RM6,502.65 in counection with convening this EGM.
3. ExpIanation’from the Operator (by Mr Shotaro Ishihara)
3.1 Mr Ishihara apologized to all members for the events that had transpired and the status of the club now. It was not his wish to see the Club at this state.
3.2 Brief History of Kristal Golf Club The Club started operations in November 1994 and things were going very well. Most of the development projects also started in 1997. Everything was fine until financial crisis hit the country in 1997, after which many of the development projects had been delayed or stalled.
3.3 The operator ran into financial difficulties as Golf Club operation was no longer profitable in view of dwindling incomes and higher overhead costs. This was made worse by defaults in membership subscriptions by numerous members.
3.4 Consequently, the bank borrowing undertaken by the Operator for the development of the Club and related projects took a turn for the worse and was not being serviced promptly. The loans became non-performing and subsequently the bank sold the loans and underlying securities to PDNB. Mr Shotaro Ishihara had undertaken numerous measures to cut costs in many ways to ensure the sustainability of the Club.
3.5 Mr. Ishihara had several meetings with PDNB to resolve the non- performing loans and worked very hard to introduce many interested purchasers with offers to PDNB. but all these offers were declined by PDNB, citing that the offers were not to PDNB’s expectation since the sums offered were lower than PDNB’s price.
3.6 Mr Ishihara further highlighted that PDNB, knew very well that the properties comprised a GoIt Course and related facilities, for which members of the public have paid substantial sums of money to acquire membership rights to use these facilities. Thus, PDNB should have exercised reasonable consideration to offer the underlying properties for sale to potential Golf Club operators, rather than just sell the properties to any party, like in this instance, to a party which does not intend to continue the Golf club operations, thereby depriving innocent members of their rights to play golf and use the facilities of the Club.
3.7 Mr Ishihara also informed members that PDNB is said to have sold the properties for a sum of RM21 million. The sale s said to have made at end of 2005 with only an earnest deposit paid by tlie purchaser, The Sale & Purchase agreement was purported to have been made only this year with payment of 10%. Mr ishihara said it is so unusual for a property transaction to drag for almost 2 years from the time earnest money is paid to signing S&P. He doubted the genuineness of the purported sale.
3.8 Mr ishihara said that he had subsequently also proposed another investor with an offer for RM22 million to PDNB. But there had been no response from PDNB.
3.9 Mr Ishihara further assured members that he would assist members in any way he can to protect their interests and to acquire back their rights as members of the Club.
4. Questions by Members and explanation by Trustee/Operator
4.1 Why Sinking Fund was not raised up during the previous AGM? How to go about it? (Mr Ong Cheow Chian -3O339)
The Trustee said that they had, on various occasions, reminded the Operator on the requirement to remit sinking fund contributions to the Trustee but the Operator had failed to do so due to cashflow problems, although they had utilized the Sinking Funds monies for the repairs and replacements done to the Clubs’ facilities, which is a legitimate use of the Sinking Funds. Trustee have also verbally informed CCM of this matter while the Operator has also said they have informed CCM of the same.
4.2 Trustee should protect the members, but Trustee didn‘t inform the members about the Club being taken over by receivers earlier, then how the Trustee is going to protect the members? (Datuk Dr. Yee Thiam Sun M0448)
Trustee said they were unaware of the actions of PDNB as Trustee was not notified by the parties earlier. Upon being notified, Trustee has done everything necessary, including numerous calls to R&M and PDNB, sought a meeting with R&M over the issues, had a meeting with CCM to brief CCM on the matter and seek advice, and convened this EGM of members at the earliest possible time upon obtaining the membership register from the R&M in order to seek members’ directiops on the further eøurse of action.
4.3 Members should retain a solicitor and get gai opinion and the Trustee ha the option on whether they want to continue to assist the members or not (Mr Billy Yeoh See Ling-M1577)
Trustee informed members that they would continue to act as Trustee under the Trust Deed to assist members in whatever ways possible to seek remedy for the members’ predicament.
4.4 Is there any membership sold after 23 July 2007? And is there any evidence on what had the operator done in terms of bringing in buyers? (Mr Ooi Eng Hock- M31457)
Mr Ishihara said that no membership was sold after 23/072007, as the Club had been scaled and the Management of the Operator evicted from the premises. Mr Ishihara also said he has evidence supporting his activities in introducing potential buyers to PDNB.
4.5 What are the options available to the members? Is the Trustee and operator willing to help them? Why has Trustee not brought any solicitors from KL to assist/advise members? (Mr Ong Cheow Chan -30339)
Mr Ravi said that PB Trustee Services Berhad is still effectively the Trustee for members of the Club. Trustee would be willing to assist the members and would like to know what the members want to do further, Mr Ravi said that the Trustee does have their own panel solicitor in KL but was not sure whether the members want to retain solicitors familiar to them from Penang region. The Trustee was informed that the Operator has invited two solicitors to advise members at the EGM and they are present.
4.6 The Chairman invited the solicitors to advise the members on their legal position, current status of their rights and course of actions that they can pursue.
5. Explanation from Solicitor (Mr Daniel Ng)
5.1 Mc Daniel Ng advised members that they currently have a licence hg±ernent with the Operator to enter the c1upremises and use the clubs facilities, which is not a proprietary right, andthis right can he revoked by the Operator anytime.
5.2 When the members lose the right to enjoy their privileges under the licence agreement, they have a course of action under contact against the Operator, Suasa Kristal (M) Berhad. Should the members sue the company and get an order df winding up against the company, it would only be a paper judgement and they would stand only as unsecured creditors with other creditors of the company.
5.3 The members must find an effective way to handle this problem. His suggestions were to question the R&M’s actions whereby the R&M has two options :
1. Either to sell the Club without any obligation to members, OR
2. To sell the Club to the right party whereby the member interests are protected.
5.4 The right party which can decide on this issue would be a judge in a court of law, which means the members need to bring an action in the court. PDNB would probably argue that they are a secured creditor as against the members, who only have a contractual agreement. Thus PDNB would deny any obligation or responsibility to the members.
5.5 Looking at another branch of law, we can ask to review the actions of PDNB and the R&M on whether their actions are reasonable and justified. Here, members may ask the court to grant an injunction to prevent the sale from being concluded and to ask the court to direct a proper sale process by way of open tender, wherein all interested parties would be given a chance to bid for the properties, including members who have the funds.
5.6 Datuk Dr. Yee Thiam Sun -M0448 put forward a motion to make a public appeal to all relevant government bodies, seek and ensure that the land which should be currently gazetted as recreation land, is still maintained as a golf course to secure the public interest of the hundreds of members, who are innocent members of public.
6. Election of Action Committee (AC)
6.1 - Trustee invited members to put up nominatio and elect members to the Action Committee which can then representll members and pursuing actions n behalf of members.
6.2 The following Action Committee comprising 9 members was elected by members by show of hands, in the election process conducted by Trustee.
Chairman : Mr Billy Yeoh See Ling (M1577)
Vice Chairman: Representative of Malay members to be appointed by the Action Committee later
Secretary : Mr Lau Heng Loon (C11781)
Treasurer : Mr Ng Looi Seng
Committee Members:
1. Mr Pang Zip Yiap (M0913)
2. Mr Eng Teik Moh (30938)
3. Mr Michael Geh
4. Mr Koay Ewe Sneah (M0077)
5. Representative of Japanese members to be appointed by the Action Committee later.
7. Chairman’s Address and Motions Passed
7.1 Mr Billy Yeoh, as Chairman of the Action Committee (the AC), thanked all members for their co-operation and support during the election process and thanked the Trustee for conducting the elections.
7.2 The Chainan tabled a motion seeking members’ mandate for the Action Committee to take all decisions deemed necessary to pursue relevant actions in seeking to protect interest of mernber and to seek remedy, redress and restitution of members’ losses. The motion was approved unanimously by all members present.
7.3 The Chairman further said that the first order of business the for AC would be to hold their first meeting within a week, then to retain solicitors to seek legal advise before pursuing further. The AC would also liaise and work with the Trustee on forthcoming issues and actions.
7.4 Datuk Dr. Yee Thiam Sun -M0448 suggested that the AC should make a press statement/announcement on the predicament of members soon, in order to put all Government organs and relevant authorities to notice on the current state of affairs. This would invite promptr action from the relevant parties and response from PDNB anR&M. Members agreed for the AC to proceed.
8. Other Matters Arising
8.1 Mr Billy Yeoh proposed that all members contribute o a fund that the AC can utilize to pay for expenses related to the actions to be taken to protect members’ interest henceforth, at RM200.OO per Golf Member and RM8O.OO per Family Member. This proposal was approved by all members present and the AC commenced collection for the fund
immediately.
With no further matter to discuss, the meeting was adjourned at 5.45 p.m.
Prepared by:
Ravi Krishna lyer
Manager PB Trustee Services Berhad
Confirmd by:
Billy Yeoh See Ling (Mship No.M1577)
Chairman
Action Committee
Tuesday, October 16, 2007
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