COPENHAGEN, Dec 2 (Reuters) – Danish facility management group ISS said on Tuesday its unit had been the property manager for a Hong Kong building complex hit by the city’s deadliest fire in decades, but had no role in renovations blamed for the blaze.
Its statement, issued after the company was named in a report by the South China Morning Post, sent the group’s shares down about 8%. Hong Kong authorities have not named ISS, which employs more than 325,000 people worldwide, as a target of investigation.
ISS said in the statement that its Hong Kong property management arm ISS EastPoint Properties Limited (ISS EPPL) provided administrative support for the incorporated owners of Wang Fuk Court, the site of the fire that killed at least 156 people.
The unit, a wholly-owned subsidiary of ISS, also manages day-to-day security services at Wang Fuk Court but was not involved in appointing the contractor for major renovation work or overseeing renovations day to day, the Danish group said.
ISS in a separate statement also said it did not conduct the installation, maintenance and inspection of fire safety equipment at the site.
“In Hong Kong, by law, these services must be undertaken by a licensed registered contractor. As the service agent ISS EPPL arranged for these services to be completed by the contractor in compliance with the relevant laws and regulations,” it said.
ISS said that the contractor was chosen by the property’s owners and its Hong Kong arm’s involvement in the selection was only administrative and “did not extend to making recommendations or the decision-making process.”
The property’s owners also used established tendering procedures for an appointment of a licensed registered contractor for maintenance of fire safety equipment in the property’s common areas, ISS said.
ANALYSTS FLAG LIABILITY CONCERNS
Analysts from brokerages SB1 Markets, Nordnet, and SEB nevertheless cited concerns about potential liability from the fire as the main driver for the company’s share price decline, which put ISS at the bottom of the pan-European STOXX 600 index.
“There is obviously a risk that ISS could be liable for some penalties and/or damages,” Johan Eliason, an analyst at SB1 Markets, said in a note, while adding that such liabilities would often be covered by the company’s insurance.
ISS did not immediately respond to requests for comment on concerns about its potential liability related to the fire.
“Our focus now is continuing to support those affected and ensuring authorities have the information they need,” ISS said in its statement.
Hong Kong’s leader announced on Tuesday that a judge-led committee will investigate the cause of the fire at the Wang Fuk Court and review oversight of the building renovations.
ISS said it will support the investigation.
“The company is already engaged with relevant authorities and will continue to cooperate fully with the inquiry,” ISS EPPL said in the statement provided by its Danish parent group.
(Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen, additional reporting by Elviira Luoma, editing by Terje Solsvik, Aidan Lewis and Tomasz Janowski)
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