ON April 15, outgoing S P Setia Bhd president and CEO Tan Sri Liew Kee Sin bade farewell to an audience of 1,000 at Istana Budaya in Kuala Lumpur.
It was the opening night for the broadway musical Jersey Boys in Kuala Lumpur. It was also S P Setia’s corporate night. The two-and-a-half-hour show told the story of the formation, success and eventual break-up of the 1960s rock n’ roll group The Four Seasons, with each of the four members sharing their perspective.
Liew in his opening speech gave his perspective of the road ahead for him. His last day at S P Setia is April 30.
He told the audience that the company he started in the 1990s with Datuk Voon Tin Yow had a small capital.
“At its height, S P Setia’s market cap reached nearly RM9bil (about RM7bil today). It has 4,782 acres of undeveloped land worth RM102bil, and unbilled sales of more than RM9bil,” Liew said. He said if he had told anyone that he would one day be selling residential units in London with an average price of £2,300 per sq ft, no one would believe him, but that was exactly what was happening today.
On May 1, Liew, as chairman of Battersea Project Holdings Co Ltd (BPHC) will be launching Phase 2 of Battersea Power Station. The project is a 40:40:20 joint venture with Sime Darby group and S P Setia taking an equal stake each and the Employees Provident Fund the remainder.
“I have served my country and I now leave this company in capable hands,” he said.
He then singled out Voon, the chief operating officer who takes over as acting president and CEO from May 1 to April 20, 2015.
“I am leaving it all to you. Can (do) or not?” he asked Voon. Voon gestured in the affirmative.
As usual, there is much drama surrounding Liew. Those few minutes could have been a teary-eyed event but that’s not Liew. Instead, he hinted at the path he has set for himself. He said American military leader General Douglas MacArthur too served his country.
“At the American Congress, he ended his speech with a line that has become well-known today. He said old soldiers never die, they just fade away. But this old soldier (pointing to himself) is going to rise up.”
How the next chapter unfolds for the entrepreneur – the youngest son of a lorry driver and rubber tapper – is anyone’s guess.
At about RM7bil, S P Setia has one of the largest market cap in the property sector. Since the PNB takeover moves in September 2011 until yesterday, S P Setia shares touched a high of RM4.01 on April 2, 2012 and a low of RM2.74 on Feb 6, 2014. On Friday, its share price closed six sen higher at RM3.05.
Moment has arrived
Earlier this week, Liew sold his last 2.76% block of S P Setia shares amounting to 67.79 million at RM3.95 apiece, a price agreed upon after the hostile takeover by government-linked company Permodalan Nasional Bhd (PNB).
The agreement was that he will remain until March 2015. There have been hints that he may leave early. That moment has arrived.
Liew seems to have paced himself well for the departure. When the first phase of Battersea Power Station was unveiled in Kuala Lumpur early last year, StarBiz asked if he was buying any vehicle to replace the one he will be losing. His son’s name Tian Xiong, then 22, has popped up as a director in a little-known company.
“I am training my son (who was with him then) to be a developer,” he said.
Several months later, Tian Xiong emerged as a director of Eco World Development Sdn Bhd together with former S P Setia directors Tan Sri Abdul Rashid Abdul Manaf and Datuk Eddie Leong Kok Wah. Within a short span of less than a year, the unlisted Eco World has amassed more than 3,000 acres in Penang, the Klang Valley and Johor with a gross development value (GDV) of more than RM30bil. This exercise has also resulted in quite a bit of debt, probably to the tune of about RM2bil, a source reckons.
Yesterday, listed-vehicle Eco World Development Group Bhd (EcoWorld) announced a proposed corporate exercise to acquire the development rights of eight projects from the unlisted vehicle, increasing the listed vehicle’s land bank from 1,326 to 4,433 acres with a GDV of RM43.5bil.
Sources say Liew will become an EcoWorld director in early May but he will leave the running of the show to president and CEO Datuk Chang Khim Wah. Liew will remain as chairman of Battersea Project Holdings Co Ltd (BPHC) until September 2015 and oversee the Qinzhou Industrial Park project in China. The £8bil (RM43.92bil) Battersea project is slated for completion in 2022. All three partners in the Battersea project – Sime Darby, Sime and EPF, will have a turn at heading BPHC.
Sources say Sime Darby has informed Liew that it is willing to give up its turn and would like him to stay on as chairman until 2018. By any measure, Liew has been the main driver from the start.
On the domestic front, there has been speculation that Liew aspires to create “a bigger S P Setia”, hence the aggressive land accumulation. However, this may be a tough act to follow.
Another theory is that he wants to close a chapter and move to the next.
Tian Xiong, now 23, may be his motivating factor. Liew may just want to built a legacy and train Tian Xiong. Those who know him say two things consume him today – work and his children.
In order to do that, Liew will need more than money and land, important though they may be. A team player from the start, he has succeeded in building a loyal following, be it staff, customers or financiers.
Says a young employee: “There were times when I wanted to leave. But after Tan Sri spoke to all of us, I changed my mind. He has this ability to motivate you to strive harder.”
Says a senior employee: “He gives you back your self-respect.”
Liew, it seems, holds 20 meetings talking to different levels, every six months. A source says of EcoWorld’s 350 staff, 250 are former S P Setia employees. S P Setia has about 1,800.
Post-Liew, Voon will be acting president and CEO “until PNB finds a replacement”. S P Setia’s CFO and executive vice president Datuk Teow Leong Seng has also tendered his resignation. His last day will be July 31.
Non-independent, non-executive director Tan Sri Lee Lam Thye has also resigned.
Sources say with so many crossing over, the EcoWorld group will build on the same S P Setia template to shorten its learning curve. Liew, 56, took 24 years to build S P Setia to what it is today. EcoWorld need not go through the same growing pains. The benefit of experience and knowledge of building a company will be transplanted into EcoWorld. That, together with Liew’s reputation as the number one property man in town, should ensure that deals are easier to get done at EcoWorld then it would have been for any other fledgling company.
EcoWorld will follow three well-trodden paths – growth, transparency and governance. It aims to have RM2bil sales this year and RM3bil next year. The company recently launched the RM1bil EcoSky project situated on a 9.6-acre freehold site along Jalan Ipoh in Taman Wahyu, Kuala Lumpur. In Johor, it launched its maiden project, EcoBotanic@Nusajaya, last year and is planning the launch of two township projects – EcoSpring and EcoSummer located in the Tebrau growth corridor – in Johor in May.
Both projects, on a 242.80ha site with a combined GDV of RM5bil, will keep the company busy.
What EcoWorld gets once Liew joins the board will be his foresight. It’s almost like he has the innate ability to sniff trends and see the big picture. It is said that Liew gets a feel of a market, especially abroad, by immersing himself into an area he is thinking of expanding to.
Much of that has come from experience, and his sense of timing the market has largely been a success.
The biggest attribute he has, according to those close to him, is his marketing and communicating skills.
“He is able to read what the public wants and truly understands marketing and branding. It’s not about fancy fonts but execution.”
That, and delivering housing products few can match, has seen a legion of loyal buyers follow the company’s every launch. There is hope within EcoWorld that this will continue once Liew comes on board.
That trust also extends to the financiers. Bankers seem to accord Liew the respect given his track record and, so far, that has worked out for EcoWorld which has had no issues in raising funds for the many projects it is embarking on.
The feeling is that bankers will give him at least a couple of years to deliver and he will likely do so because he has sold plenty of houses in the past and EcoWorld is focused on the bread-and-butter segment where there is plenty of demand.
“The man (Liew) has not slowed down and he has never been so busy,” says a source.
Liew may continue to take the big picture perspective and leave the day-to-day routine to his trusted lieutenants.
That will free him up for a lot more strategising.
In between jetting to London to oversee the Battersea project, EcoWorld too is scouting for projects abroad, much in the vein S P Setia is doing today.
At yesterday’s press conference, EcoWorld president/CEO Datuk Chang Khim Wah did not dispute about EcoWorld venturing abroad. “We like to be in countries we know, at the right time and right place,” he says.
Says a property consultant who declined to be quoted: “If you look at S P Setia, it grew after the Asian Financial Crisis in 1997/98 when other developers, who had focused on the high-end residential sector, were suffering.
S P Setia provided the bread-and-butter housing that people were able to afford. It downsized its units in both Johor and Setia Alam, and instead of double-storey, built single-storey in Johor. This reduced revenue but there were sales.
“The company was agile and the market helped him. That is basically the story of S P Setia. He hanged on to a formula and made it better. If you consider EcoWorld’s offerings today, they are also in the bread-and-butter housing, but because prices have moved up, their prices too have move in tandem with today’s prices.
“S P Setia balanced itself with different products. EcoWorld has EcoSky, a condominium project in Taman Wahyu.
It also has townships in Johor. S P Setia went international and regional in order to balance sales if the domestic market suffers. EcoWorld may do the same, a source says.
The next poser for EcoWorld would be the many lieutenants and generals in a small upstart, aggressive though it may be. Chang’s forte is in Johor.
EcoWorld, says a source, will not remain in Johor. It has already amassed land in the Klang Valley and Penang.
In time to come, it may have more than one CEO. And if it truly takes the path of S P Setia by going international, it will need a trusted loyalist to head the international market.
“Having tasted success overseas in S P Setia, EcoWorld will not want to remain under the coconut shell,” says a source.
Liew does not seem to be slowing down but seems to have a second wind and chance in building a legacy. And he hinted at the opening night of Jersey Boys: “This old soldier is going to rise up”