Hong Kong property giant ‘welcomes’ police probe

One of the giants of Hong Kong’s property market said yesterday it was cooperating with a police investigation into the collapsed sale of what was billed as the world’s priciest flat.
Henderson Land Development said police had “visited” its headquarters on Wednesday to investigate the failed sale of luxury flats at its exclusive Conduit Road tower development in the city’s Mid-Levels.
The scrapped deals included what was supposed to be the world’s most expensive apartment, a 6,158-square-foot (554-square-metre) duplex that Henderson said in October had sold for 56.6 million US dollars.
“The company provided relevant documents and then assigned staff to assist with the investigation upon request,” Henderson said in a statement to the Hong Kong stock exchange. “Such investigation does not have any impact on the company’s business operations.
“The company welcomes the investigation of the police and will fully cooperate in providing information. It is hoped that the issue will be clarified as soon as possible.”
The property giant has previously defended the cancelled sales, saying they were above-board transactions that simply fell apart.
Officers from Hong Kong’s Commercial Crime Bureau swooped on Henderson’s office in the city’s financial district and also searched a law firm allegedly connected to the failed sales.
No arrests were made, police said.
Henderson – controlled by property tycoon Lee Shau-kee – has been at the centre of a brewing controversy since it reported last month that the sale of as many as 20 out of 24 units at the Conduit Road site had been cancelled.
Critics demanded a probe, asking why the cancellations only came to light eight months after the sales were first announced, which helped hike prices for luxury residential flats and stoked concerns about a property bubble in the former British colony.
Questions have also been raised about the relatively small deposit that Henderson kept after the failed sales, and why all the buyers appear to have used the same law firm to process the transactions.
Henderson was criticised for selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers.
The supposed 68th-floor duplex that snatched the world-record price was actually on the 43rd and 44th floors, according to reports. It was so numbered because “68” sounds like “continuing fortune” in Chinese and is considered lucky.
The Hong Kong government in November introduced a list of measures to increase the transparency of property sales, in a bid to cool public anger over Henderson’s selective-numbering tactics.
Under the new arrangement, developers must make details of transactions involving uncompleted first-hand residential properties public within five working days of signing preliminary agreements for sale and purchase.
Developers were previously only required to register the transaction within one month of the sale.
Developers are also required to include the price per square foot (or metre) of the “saleable area” of individual flats on their price lists, instead of only the overall price of the flats, as was the case before.
They must also give floor numbering information at the beginning of their sales brochures, replacing the current practice of printing the information at the end of the books.