Thai campaign to stop sale of Lehman property assets

Thai campaign to stop sale of Lehman property assets
Justine Lau and Sundeep Tucker
December 4 2009

A Bangkok-based property company has stepped up its campaign against the sale of assets in Thailand owned by Lehman Brothers, in a move that could further hamper the work of the liquidators of the failed US bank.

KPMG, the professional services firm, was last year appointed liquidator of eight Hong Kong-based Lehman units, one of which had invested in a string of property deals across Thailand. KPMG has been arranging to divest some of the assets belonging to Lehman Brothers Commercial Corporation Asia (LBCCA), the main unit, and return proceeds to creditors.

However, some local interested groups are demanding right of first refusal to purchase these assets. The Financial Times reported last week that they had successfully lobbied Thai police to probe whether KPMG failed to follow due procedure when trying to sell the Lehman assets and might have circumvented local bankruptcy laws.

The investigation is at a preliminary stage, and no one has been accused of any wrongdoing.

Destination Properties, a former joint venture partner of Lehman in Thailand, has used a newspaper advertisement to warn off potential buyers of the assets. The advertisement, placed in the Wall Street Journal, claimed that legal actions were being taken in Thailand to invalidate the KPMG-led sale process.
It warned that, because a bankruptcy petition of LBCCA in Thailand had been accepted by a local court on October 23, any sale of assets three months before or after that date could be overturned by authorities.

"Any person or entity that colludes with LBCCA or KPMG in any transaction regarding the Destination Properties assets will be named (along with their directors) in these and any other ongoing criminal and civil lawsuits in Thailand or any relevant territories," the advertisement said.

Gary Murray, chief executive of Destination Properties, claimed KPMG had invited a number of foreign banks to submit bids this week for some Lehman outstanding loans in Thailand, which have a face value of about $180m.

The timing of the press announcement suggests that Destination Properties believes that asset sales could be imminent. KPMG declined to comment.

The FT reported last week that three senior executives at KPMG, liquidators of the Hong Kong subsidiaries of Lehman Brothers, had been summoned by Thai police for questioning in relation to the sale of the properties.

ft.com