EGM Update: Calvary Church to Sell Church Properties

As the Calvary Convention Centre (CCC) gets built, the pressure on Senior Pastor Prince Guneratnam (PG) and his Deacons to raise the money to pay the Contractors also begins building up.

The slowdown in members’ giving and the failure to secure additional loans despite the assistance of Exsim, is forcing PG to resort to premature selling of the bungalows around the main Church Sanctuary in Damansara Heights. 

At a specially convened EGM last Friday, 20 April 2012, he sought the approval of the members for a general mandate to sell 5 out of the 6 bungalows to raise the shortfall in funds required to complete the CCC. 

CCC Progress Update

Before the Resolution was put to the vote, Deacon Ngeow Zoo Gin presented an update of the progress of the construction of the CCC. He informed the members that the physical completion is expected to be in August this year, with the Certificate of Fitness anticipated to be issued by March next year. The Church hopes to be able to hold the Good Friday and Easter services at the CCC next year.

Financial Update

He shared that the challenge is to raise RM97.6 million being the Balance of the Construction Cost of RM200 million by 31 December this year. 

The Church projects an Income Surplus of RM5.8 million for the rest of this year including fund-raising and after netting off the Interest Payable to the Banks on the loans drawn down. 

The balance of the loans available for draw down is RM28.8 million while the balance of Sales Proceed of the commercial land due from Exsim is RM36.5 million. 

After taking into account of the above, the net cash shortfall is RM36.5 million.

Proposal to sell Bungalows

To partly meet this required funding, a mandate is now being sought from the members to sell the 5 bungalows.  

Deacon Ngeow explained that based on the valuation done on one of the bungalows in April last year which was RM400 per sq ft, the total estimated value of the 5 bungalows is RM22.7 million. A recent verbal estimate by the same Valuer puts the market price at RM450 per sq ft.

CT notes that, in his estimation of the value of the bungalows, he did not elaborate whether he imputed any value for the building or taken into consideration the fact that all the bungalows are not “livable” as they have been renovated for Church ministry use. 

He has also obviously not considered the possibility that a few of the bungalows, being situated nearby or adjoining the main Church Sanctuary may not be able to sell or be able to fetch the market price that he expects.

He said that the bungalows may be sold either individually or on an en-bloc basis. There are discussions ongoing with several parties for sale on an en-bloc basis. The sale of the bungalows may be an outright sale or a sale with an option for the Church to buy back. 

Resolution Proposed

The Resolution proposed encompasses the following points:-

1.    That the Board of Deacons is authorized to sell any or all of the 5 bungalows along  Jalan Damansara Permai namely the Antioch Bungalow (No. 2), Capernaum Bungalow (No. 3), Berean Bungalow (No. 15), Bethel Bungalow (No. 21) and Bethlehem Bungalow (No. 27) on the following terms:-

a.  That the Sale Price be fixed at an average market price at the very least, determined after 2   independent Valuations have been carried out in respect of the property or properties intended to be sold.

b.  That the property or properties be sold to person/s or body corporates who are not in a conflict of interest position with members of the Board of Deacons or Pastors.

c.  That the terms of the sale may, if required, include a buyback clause at a price of up to 35% higher than the Sale Price, exercisable over a 5-year period.  

d.   That the proceeds of the sale/s, be used exclusively to defray the cost of such sale/s and to fund the continued construction of the CCC.

e.   That the full details of the sales/, once transacted,  are notified by displaying such details on the    Church notice board or the next General Meeting immediately following such transaction.

2     That the Trustees of the Church and the relevant members of the Board of Deacons be authorized to execute all documents.

3.   That this Resolution will be valid until 2014 AGM or unless sooner revoked.

The Resolution was put to the vote and was approved by the members. Out of the attendance of 310 members at the EGM, only one lone brave hand went up to object to the sale of the bungalows. 

Proposal to set up a SPV to manage CCC

Deacon Chow Sang Hoe presented a preliminary report on the issue of maintenance of the CCC and marketing of the facilities to the public to generate income to cover the maintenance costs. 

The present decision of the Board of Deacons is to set up a separate entity outside the Church to run the management of CCC. Towards this, the proposal is to incorporate a new company, that is, a Special Purpose Vehicle (SPV) to be owned and held by a professional Corporate Trustee in trust for the Church or a Trustee Company set up by the Church. 

The SPV, will, in turn, appoint external service providers to maintain and to market the facilities. The committee had approached 13 service providers and 8 had expressed an interest to handle the functions. From the 8, the committee has selected 5 to submit their proposals by end of this month. However, 1 service provider has since declined while the remaining 4 service providers have yet to submit their proposals.  

Deacon Chow lamented that it is a challenge to get a service provider for CCC because  the church has imposed a requirement that Sundays are reserved for the Church’s use. He acknowledged that in the secular world, most exhibitions, forums and seminars are held over the weekends and therefore, it is hard to market CCC’s facilities. He appealed to the members to pray for this matter.

CT Comments

Although the Resolution to sell the bungalows was passed, the actual sale of the properties will be challenging. The close proximity of the bungalows to the main Church Sanctuary will be a matter of concern as well as a bargaining point for potential buyers due to the traffic congestion and parking problems on Sundays and during other services on weekdays. 

Even if PG goes back on his earlier assurance that he will not sell and close down the main church here (it is highly probable that he will sell, out of desperation to raise funds), the buyers will still be concerned what the future development will be on this site.  

On another note, even if all the 5 bungalows are sold for RM22.7 million (assuming any further appreciation balances out the cost of sale), there will still be a shortfall of RM3.8 million for this year. This is on the assumption that Exsim pays up the RM36.5 million this year as projected by Deacon Ngeow.

However, this is a big question mark. Under the Terms of Sale of the commercial land to Exsim, Exsim has the right to terminate the Sale and Purchase Agreement, should they fail to obtain the Development Approval from the authorities. If this happens, the church has to refund every sen paid by Exsim todate. 

This will be disastrous to the Church!

CCC : Calvary Church Begins Loan Drawdown

Senior Pastor Prince Guneratnam (PG) must be going through dreaded times.

The road to fulfilling his vision of building a mammoth monument (Calvary Convention Centre or CCC) to glorify God has certainly not been easy. 

Although one may argue that it is never easy when one does the will of God, the same also holds true when man’s vision gets clouded with God’s vision and man believes his vision is God’s vision. 

However one looks at it, the road that PG has taken surely looks like one that will lead Calvary Church into many years of financial bondage, beginning with this latest drawdown of the Bank Loan.

Does God need to borrow money from man’s banks to fulfill His vision? 

Our Bible declares that God is the Creator of the heavens and the earth and He owns the “cattle on a thousand hills” (Psalm 50:10). Our God is a mighty rich God and He has no problems fulfilling His vision. 

Alas, for PG, he has to resort to Bank borrowings to fulfill his vision. The money is just not coming in as he had hoped for, as members become numbed to his incessant barrage of “give, give, give” from the pulpit and the constant insinuation that God will not bless if they do not give. This “spiritual threat”, is of course, unbiblical. God blesses because he is a good God, not on the basis of our giving as we cannot “earn” His blessings.

Hence, PG has no choice but to draw down on the Loans granted by Alliance Bank and Public Bank. 

Last Sunday, the Church announced that they have drawn down RM14 million to pay the Contractors and the Interest Payable on the Loan Amount drawn down comes up to RM70,000 a month.

What does the future hold for Calvary Church from now on?

When the total loans of RM43 million from both Banks are fully drawn down, the Interest will amount to RM215,000 per month or RM2.58 million per year.

This does not even take into account the Principal payment. If the RM43 million loans are to be repaid over, 10 years, it will come up to another RM358,000 per month or RM4.3 million per year.

The combined interest and principal payment will eventually be a whopping RM573,000 per month or RM6.88 million per year for 10 years! 

This is just mind-blowing and poses a huge question mark over the Church’s ability to repay the Banks and the future fate of Calvary Church, considering that the income surplus for 2010 was only RM6.1 million. The cost of maintaining the CCC is not even taken into account.

Will the construction of CCC be completed with the full drawdown of the Loan sum of RM43 million?

The answer is NO. Even with full loan drawdown, the Church is still short of RM75 million to complete Phase 1 of CCC. The Exsim land deal is supposed to generate a cash inflow of RM55 million to the Church but this is spread out over at least 4 years. 

Therefore, in the interim, PG will have to raise between another RM55 to RM65 million, assuming Exsim will pay between RM10-20 million upfront on the deal.

PG certainly needs a giant panadol!

Footnote: CT has amended the loan repayment figures in the above article, following verification that the loan period is only 10 years. The original article had assumed a loan period of 15 years.

Calvary-Exsim deal becomes riskier

At the recently convened Calvary Church EGM on 16 Dec 2011, the Board of Deacons sought the approval of the members to vary the terms of the Calvary Church-Exsim Development Sdn Bhd joint venture on the commercial plot of land adjoining the Calvary Convention Centre (CCC) project.

The variation sought was to allow the title and ownership of the land to be transferred to Exsim upon the receipt of the amount of RM20 million, out of the total agreed purchase price of RM55 million. The variation was approved by the members.


Under the previously approved terms, the title to the land was to be transferred to Exsim only after the receipt of the full sum of RM55 million. However, this situation is not desirable as it would mean that Calvary Church, as land owner, will be a party to every sale and purchase agreement that will be signed in respect of the apartments sold. This, in turn, will result in severe tax implications as highlighted in our previous article on this issue.

(Read Calvary Enters JV with Property Developer dated 22 October 2011.)


One of CT’s readers had sent the article to all the deacons and pastors of Calvary Church, and having taken note of the concerns raised by CT, the Deacons have now come up with the above variation in the terms.


Whether this new revised Agreement will enable the church to avoid Income Tax on the Church’s share of profits from the Development, is too early to tell. Such a risk remains, so does the questions of ethics. Jesus did say that we ought to “give to Caesar what belongs to Caesar” when He was asked if one should pay taxes.


Aside from the issue of tax, the new revised terms, raises a new risk. Previously, the title was to be transferred to Exsim only after the full sum of RM55 million is received. If the Development project is successful, Exsim will have to pay the Church in full in order to secure the title to the land and to enable them to sub-divide and transfer the strata titles to the apartment purchasers.


Now, if the title is transferred to Exsim after they pay only RM20 million, Exsim is no longer under any pressure to pay up the balance RM35 million.

Exsim may have promised to pay the RM35 million in staggered payments over the next 4 years and this may be clearly stated in the agreement but the fact is the church has no collateral or further control over the land. Exsim can very well stretch out the payment over the next 10 years or ask for a discount. In the worse case, the matter may end up in the civil courts for years.


Two Directors of Exsim have agreed to guarantee the RM35 million balance amount but however, their personal net worth is unknown and therefore, it is difficult to ascertain if their guarantee is worth the outstanding debt. Besides, enforcement of guarantees can only be commenced after ALL ATTEMPTS of recovery from Exsim have been executed.


This is the most obvious sign that Pastor Prince Guneratnam (PG) has become so desperate to get his CCC built that basic common sense and rationale no longer prevailed.


PG’s desperation bodes well for Exsim.

Why was Exsim selected to be so “blessed” by Calvary Church remains a big question mark?


Who is Exsim?


Actually, very little is known about this joint venture partner of Calvary Church. As reported in our earlier article, Exsim Group is a small, industrial and commercial lot developer, which recently undertook a residential condo development called the “The Treez” in Bukit Jalil.


From the Exsim website and “The Treez: brochure, the “the Treez” project was developed by Jalilmax Development Sdn Bhd,.


A search at the Companies Commission revealed that Jalilmax was incorporated on 8-8-2005. The directors of Jalilmax are Lim Aik Hoe, Lim Tau Fong and Lim Aik Kiat. Exsim Development Sdn Bhd is listed as the current owners of Jalilmax.


On the other hand, Exsim Development Sdn Bhd was incorporated only on 14-10-2009 with a paid-up capital of only RM100,000. Its directors are Chong Peck Ee, Loo Yoke Foong, Puang Wan Ching and Wong Siong Lin.


The directors of Exsim and Jalilmax are totally different people. Perhaps, the information
available from the Companies Commission has not been updated but the fact remains that Jalilmax was set up earlier and taken over by Exsim only after 14-10-2009.


With only a paid-up capital of RM100,000, Exsim does not even qualify to apply for a Developer’s Licence. The law requires a Developer to have a minimum paid-up capital of RM250,000 before they can be issued a licence to commence any property development.


It is quite likely that Exsim will incorporate a new subsidiary company to undertake the development of Calvary’s commercial land as is normally the case with property development groups where the holding company remains purely an investment holding company while the subsidiaries are the actual developers. This is to protect the holding company from legal liabilities should any development goes sour or gets entangled legally or financially.


The gross development value (GDV) of Exsim Group’s total projects are a mere fraction compared to the GDV of the big players like Sunway, Glomac, Sime Darby, MK Land, SP Setia, and Sunrise whose GDVs run into tens of billions of ringgit.


So is PG taking a “gamble” with a small company like Exsim? He certainly is!


With the 2013 Pentescostal World Conference in Kuala Lumpur looming near, PG is desperate. He had already announced to the world that he is hosting the conference in CCC and so, it will be a huge loss of face for him, if the CCC is not completed in time.

Blessed Christmas & Happy New Year