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Individual owners of Menara UOA Bangsar warn of possible opacity in management of UOA Reit properties

TheEdge Thu, Sep 06, 2018 06:37pm - 11 months ago

PETALING JAYA (Sept 6): Menara UOA Bangsar interim MC President Datuk Satharuban Sivasubramaniam has urged management committees of other mixed developments owned by UOA Real Estate Investment Trust (UOA Reit) to take heed of the Menara UOA Bangsar case, as he believes the fund has similar practices in managing its other properties as well.

In a three-page press statement today, Satharuban explained the reasons that caused the disputes between individual owners in Menara UOA Bangsar and major share unit owner — UOA Reit, who owns 53% of the share units in the building.

The 10-year old Menara UOA Bangsar consists of 39-storey Tower A, a 23-storey Tower B, three-storey retail units and a ten-level car park. UOA Reit owns Tower B and the retail units (Component B), while the individual owners (47%) own Tower A.

The fund is managed by UOA Asset Management Sdn Bhd, which is a subsidiary of UOA Holdings Sdn Bhd.

Satharuban said UOA Reit's insistence on keeping multiple ledgers and accounts for Menara UOA Bangsar is fundamentally wrong as separate ledgers and accounts should only be set up, after the sub-management corporations and sub-management committees of Menara UOA Bangsar are formed.

"There is a clear conflict of interest if UOA Reit is the party that decides on how the separate ledgers and accounts are to be set up. What may be in the best interests of UOA Reit may not necessarily be in the best interests of the remaining 426 private parcel owners of Menara UOA Bangsar,” he stressed.

Besides this, he noted that the previous property manager DATS Management Sdn Bhd, a subsidiary of UOA Holdings, has refused to provide an account for all the fees that it collected over the years from the motor cycle car park of Menara UOA Bangsar after it was discovered in 2017 that the motor cycle car park does not belong to UOA REIT but to Menara Bangsar Management Corporation.

As a consequence, the Menara UOA Management Corporation has had to commence legal proceedings against DATS Management to obtain an account and recover payment of the fees collected over the years.

Following these incidents, the management committee has decided to replace DATS Management with an independent property manager — Henry Butcher Malaysia (Mont Kiara) Sdn Bhd, to manage the building for better transparency.

Satharuban also disputes claims that the maintenance fee paid by UOA Reit, which is RM8.20 per share unit (psu), is sufficient to cover the cost for centralised air-conditioning and maintenance charges which the fund alleges is only RM7.49 psu.

Currently, individual owners in Menara UOA Bangsar are now paying RM8 psu (excluding air-conditioning usage and maintenance charges) monthly, while maintenance fees paid by UOA Reit include air-conditioning and maintenance charges.

The management committee has appointed an external consultant to look into this issue and revealed that it costs an estimated RM85,000 per month to provide centralised air-conditioning for all UOA REIT parcels (Component B).

"The extra payment of RM0.20 psu (by UOA Reit) entitlement only equates to RM7,258.00 per month, leaving a shortfall of about RM77,800 per month. Extrapolated to the inception of Menara UOA Bangsar, it appears that UOA REIT have benefitted to the order of RM9,330,000 in the provision of centralised air-conditioning to all UOA Reit parcels. This has been brought to the attention of UOA Reit but to date no response has been received,” said the statement.

He also revealed that UOA Reit has sent him a letter requested him to withdraw certain statements in his chairman’s report before the 3rd annual general meeting (AGM) in August 16, when they were questioned on these issues.

"I stand by what I have said in my Chairman’s Report and my legal counsel has since replied to the letter from the solicitors of UOA REIT,” he said.

Satharuban added that UOA Reit's decision to exercise its majority vote to reduce the number of Management Committee Members from nine persons to three at the 3rd AGM of Menara UOA Bangsar Management Corporation has clearly showed that the intention to stifle questioning and being called to account.

To recap, the seven minority owners’ representatives in the management committee had retracted their nominations during the AGM and Menara UOA Bangsar has failed to form the three-member management committee.

Dewan Bandaraya Kuala Lumpur’s Commissioner of Buildings (COB), which stepped in to mediate the case, has instructed the former nine-person management committee to resume their task as interim management committee for two months, until an extraordinary general meeting is held and a new management committee is formed.

Click on this link to go to the original story on EdgeProp.my

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