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Denise Tsang

Directors of Playmates Properties Holdings, controlled by the family of chairman Chan Tai-ho, were yesterday criticised for the company's heavy debt and share option incentives.

  At the annual general meeting, about 50 minority shareholders expressed their disappointment over a sharp rise in bank loans to $1.58 billion amid a 93.7 per cent plunge in attributable profit last year.

   This led to gearing ratio soaring to 37 per cent from 29 per cent in 1994.

  The shareholders blamed declining profits over the past two years on an apparently disorganised management team. They said the management did not deserve being awarded share options.

  They questioned why 17 million share options were given to the four executive directors as a bonus despite the company's relatively poor performance.

  Executive director David Yu Hon-to said there was no linkage between the company's performance and the share options scheme.

  'We grant share options to our employees as incentives and encouragement,' he said.

   The outstanding borrowings and annual interest of $100 million resulted from the acquisition of properties including Shui Hing House.

    Executive director Clara Chan Law Kar-ling said the company would be able to repay the loans with this year's rental income.

  In addition, there would be revenue from the sale of the remaining 30 per cent of Village Garden and other development projects.

   'Rental income is expected to increase to $170 million from $130 million last year,' Mrs Chan said.

  She said there would not be any cash-flow problems and she ruled out any fund-raising exercise this year.

  Directors blamed the slide in attributable profit to $8.2 million from $130.3 million in 1994 on the slump in the property sector.

   One shareholder said the explanation was 'far from satisfactory', saying that some rivals did see profit growth in spite of the tough climate.

   'The company is disappointing in terms of financial results and management,' the shareholder said.

   At the meeting, shareholders approved changing the firm's name to Prestige Properties Holdings. Its Chinese name will remain unchanged.

   'The name Playmates doesn't suit a property company,' Mrs Chan said.

  DIRECTORS TAKEN TO TASK ON: Raising the company's bank debt to $1.5b Rewarding themselves with share options A decline in net profit of 93 per cent 



Playmates under fire over rise in debt and share options