Midland chief Freddie Wong Kin-yip keeps mum on raising stake further
The chairman of beleaguered real-estate broker Midland, Freddie Wong Kin-yip, was tight-lipped yesterday about whether he would continue to increase his stake in the firm, but insisted it had his full support.
Facing a possible takeover bid by Midland's second-largest investor, Apex Benchmark, Wong has spent nearly HK$80 million since January to raise his stake to 18.01 per cent, from 15.35 per cent.
"Midland is my baby," he told a press briefing in Hong Kong yesterday. "It has been operating successfully for 41 years and I hope it will continue to be good."
Wong said he was confident he could lift the company from the "red sea" of its net loss of HK$204.3 million last year - the biggest since its listing in 1995.
Wong said the firm's market share had dropped slightly, but its performance would be improved after restructuring.
"I managed to overcome the market downturn in 1998 [when home prices plunged by up to 70 per cent in the wake of the Asian financial crisis] and [the severe acute respiratory syndrome outbreak] in 2003. I will make all efforts to turn the firm around," he said.
But reports by Barclays and Bocom International predict another loss this year.
Addressing the media for the first time after Apex demanded a change in management, Wong said he saw all investors as friends of the company.
Midland deputy chairwoman Angela Wong Ching-yi said the firm had replied to Apex's request for a post-results meeting, and that it was awaiting the fund's response.
To address investors' call for a management revamp, she said Midland would hire a consultancy firm to help streamline its operations and enhance its cost effectiveness.
Apex chief operating officer Mau Wang-bong confirmed it had received a message from Midland about the revamp through the WhatsApp messaging service and said it would reply after studying the proposal.
Freddie Wong said a nearly 30 per cent increase in rental expenses last year, cited by Apex as one of the major reasons for last year's loss, was due to some leases being renewed at the peak of the rental market.
In response to criticism that Midland had rented a number of outlets that he owned at high rents, Wong said premises he owned accounted for just 1.7 per cent of the firm's rental expenses.
"It was very minimal," he said.
At the same time, he said the board comprised 11 directors, of whom three were members of the Wong family.
"The board comprises professionals such as accountants and attracts lots of institutional investors," he said. "Our management is definitely not a family-run company."
Shares in Midland dropped 2.04 per cent to close at HK$3.83 yesterday.