Karambunai: Villas well-kept, investors trying to influence arbitration

Walls and floors of a villa unit that have grown mouldy because of long-term damp conditions, with Wrobel saying that some villas had water seeping from under the floorboards. — Picture by Nexus Property Owners' Association (NPOA)
Walls and floors of a villa unit that have grown mouldy because of long-term damp conditions, with Wrobel saying that some villas had water seeping from under the floorboards. — Picture by Nexus Property Owners' Association (NPOA)

KUALA LUMPUR, Nov 27 — Operators of the luxury Nexus Karambunai Residence Spa and Pool Villas in Sabah have denied investors claims that their properties were ill-managed, suggesting instead that the accusations were deliberately aimed at influencing an ongoing arbitration process.

Nexus Bay Resort Karambunai Sdn Bhd, a wholly owned subsidiary of Karambunai Corp Sdn Bhd, pointed out here that prior to yesterday's demand for Putrajaya's intervention by investors keen on recovering their RM32 million in unpaid rental income, the group had already engaged operators in an arbitration bid and was awaiting the outcome.

In a brief statement to The Malay Mail Online yesterday, lawyers for Nexus Bay Karambunai added that not only was their client engaged in an arbitration process with the Nexus Property Owners Association (NPOA), there was also a separate court matter on pause pending the disposal of the arbitration matter.

"Our client views with concern, certain of the [sic] statements which suggest that third parties should step in when those very members had submitted their differences with our client to arbitration, the said members' court action having been stayed with costs granted against them pending the arbitration process," law firm Lim Guan Sing & Co said on the statement.

"It would appear that these statements were issued and calculated to pre-empt, interfere with and influence the outcome of the arbitration process which is still ongoing," it added.

According to NPOA, 108 of the affected investors had filed for arbitration in 2011, with the arbitrator initially set to decide on November 20 whether the villa owners could even go on with the arbitration, but the decision was postponed.

Yesterday, NPOA director Tony Wrobel also claimed that some of the villas have not been properly maintained by KCB and have been literally left to rot, expressing the group's worry that the alleged neglect was causing their properties' value to plunge.

At a news conference, he showed reporters photographs, purportedly of the villa units with water that seeped out of its floorboards, leaving mould on furniture and walls, saying that the buildings also had rotting wood and rusty balcony balustrades.

Another NPOA director, Danny Danielis, claimed that around 23 units had roofs that leaked, also accusing KCB of turning some of the villas into its reception area, offices and storerooms even as rental to some of the investors remains unpaid.

But the law firm said that NBRK has continuously maintained the villas and even worked to upgrade the facilities there.

"We are further instructed that our client has continually sought not only to maintain the status of the Precinct Dilenia project but also to upgrade the facilities, which a visit to the resort and the project site will confirm."

The law firm also said that NBRK would "reserve its rights to take such legal action as may be necessary in due course to protect its image and standing".

Yesterday, Wrobel said NPOA had in the past contacted the Tourism Ministry and the government's efficiency unit Pemandu, and had even met with Malaysia's consulate-general in Hong Kong, but said the group received “no feedback” despite their efforts.

“We would like to call on the government to direct the Ministry of Tourism and Pemandu to intervene and compel KCB to meet their obligations under all agreements with the owners, and manage and operate Nexus Bay Resorts SPV in the way it was intended,” he told the media at the Le Meridien Hotel here.

NPOA, a Hong Kong registered company with four directors, counts over 100 investors from 31 countries, including the UK, Hong Kong, Singapore and Malaysia, as its members.

The investors, numbering over 100, had bought luxury seaside villas on Sabah's west coast belonging to KCB, which also owns and manages the five-star Nexus Resort Karambunai frequented by visitors of the state capital, Kota Kinabalu.

The privately-owned units of the Nexus Karambunai Residence Spa and Pool Villas — which KCB rents out to tourists as part of its resort — were purportedly sold and marketed by the company as early as 2006 under the federal “Malaysia My Second Home” programme.

With the purchase of the seaside villa units that cost around US$300,000 (RM965,460) to US$400,000 (RM1.287 million), the investors took up KCB's offer of a leaseback agreement, where they were supposed to receive a guaranteed rental income of around 7 per cent.

But the investors claimed that payments have stopped coming in since early 2011.

KCB had previously committed in a letter to NPOA to pay all the outstanding rent owed by December 2011 and promised not to default further, but the investors did not receive any further payments after an initial sum in March 2011, Wrobel said.

Recently KCB sent a letter of offer to the NPOA, offering to settle the dispute over the rental income, but the investors have rejected it, Wrobel said.

Wrobel also complained that the land titles to the villas have not been transferred to the investors, saying that this rendered them helpless and unable to take over management of the villas from KCB.

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