Thursday, 15 July 2010

Finally Investigating Sour Deals

In October last year, a record was set for the most expensive flat in the world at 39 Conduit Road in Mid-Levels for almost $57 million.

The five-bedroom apartment at 6,158 square feet was apparently sold to a mainland Chinese buyer, or that was what developer Henderson Land claimed.

But today police raided the offices of Henderson Land and a law firm after many questions were raised about the authenticity of this deal and 19 others that mysteriously fell through. Many believe these "deals" were made to manipulate the market.

One of the legislative councilors, Ronny Tong Ka-wah who is also a lawyer who has years of experience handling property contracts, was shocked to find the language in these contracts was so loose. They basically said the buyers could forfeit only 5 percent of the purchase price and did not have to compensate Henderson Land for any losses on resale. Also, the developer refunded HK$175 million ($22.53 million) in deposits to these alleged buyers in the aborted deals.

Oh and it just so happens that these "buyers" were shell companies registered in the British Virgin Islands and all were represented by Lo & Lo Solicitors...

Before the police raid today the public was annoyed the Hong Kong government had basically done nothing about the situation, which in a way tacitly allowed such scrupulous practices to happen.

However, despite its good intentions, the police may not have or find the evidence needed to prove Henderson Land's intention to manipulate the market.

"The police would have to prove the developer had such an intention," Tong said. "They would also have to find victims. For example, buyers who suffered a loss as a result of the uncompleted transactions. There is little chance."

He added the Securities and Futures Commission would be more effective in taking action by proving Henderson Land issued false information to mislead buyers, who relied on this information to make transactions.

In any case, the developer is apparently fully cooperating with the investigation, saying, "We will do our best to offer assistance so that the truth will be revealed," a spokeswoman said.

And we will eagerly wait to see the outcome of the investigation.

2 comments:

  1. it is about time hong kong should have 'clean' business dealings rather than 'making ' markets.

    ReplyDelete
  2. it is time hong kong should have 'clean' business dealings rather than 'making' markets.

    ReplyDelete