iProperty's welcome asset sale

The sale of the equity stake in iCar Asia (ICQ) by Asia-focused real estate website owner iProperty Group (IPP) is a positive development for shareholders in more ways than one.

iProperty will get around $7 million from the share sale, which means it cash holdings will nearly double to about $15 million.

Besides having the effect of strengthening the balance sheet, the sale will help ease governance concerns as it puts more distance between both companies.

As it is, iProperty and iCar are founded by the group and they both share a common chairman, Patrick Grove. iProperty’s chief executive, Shaun Gregorio is also a non-executive director in iCar.

These interconnections mean any commercial transaction or cross holdings should be scrutinised as a potential source of conflict.

Given that both companies operate and are headquartered in Asia, anything that improves transparency should be warmly welcomed by local shareholders.

iProperty didn’t say who had bought its stake in iCar and the company didn’t reply to questions by the publishing deadline.

Shares in iCar closed 3 cents higher at 82 cents, while iProperty shed 1 cent to finish the week at $1.57.

Only iProperty is part of the Uncapped 100 (see iProperty at transition point).