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Archive for March, 2010

39 Conduit Road - Transparent or Not?

Monday, March 29th, 2010

Henderson Land announced in October 2009 that 24 flats at their newly developed residential site on 39 Conduit Road had just been sold and one of them for a record of over HK$ 70,000/sq. ft..

Until today 29 March, 2010 - only 1 of the 24 transactions have completed, the remainder are yet to be completed. The Development Bureau’s 25 March press release is as follows:-

With regard to the transactions of 24 units of "39 Conduit Road", a
Government spokesman said today (March 25) that the Lands Department had
received the reply to its inquiries from companies of the Henderson Land
Development Co Ltd (the Companies) yesterday (March 24). "The Companies
replied that they had entered into a verbal agreement with the 24
purchasers to extend the completion of the sale and purchase for a period
of between two to four months, therefore no assignment had been executed or
delivered to the Land Registry for registration. Also, the Companies said
that the completion of the sales might be further extended," the spokesman
said. "Given that the Companies had entered into new agreements with
the purchasers verbally and could not be definite about whether the
transactions could eventually be completed, the Lands Department issued
another letter to the Companies today (March 25) requesting further
information. "We will continue to closely monitor whether the
transactions will eventually be completed and whether there is any

In normal sales and purchase of properties, the buyer and seller enter into agreement in writing and the buyer usually pays a deposit to guarantee the purchase and if the buyer fails to complete then he/she will forfeit the deposit paid and if the seller fails to complete then the seller has to return the deposit to the buyer and pay a compensation fee equivalent to the deposit. It is peculiar that no deposits have been forfeited for these transactions and furthermore the standard completion period is 2 months and it seems peculiar that Henderson should only negotiate the extension for completion when pressured by the government to provide answers 5 months after the buyers and Henderson Land entered into contract.

Moreover, it seems peculiar that all 24 buyers bought using British Virgin Island companies or other vehicles whose buyers cannot be looked up, so the identity of the buyers are to-date unknown.

Lastly, according to information from the Companies Registry, different shell companies were used to buy the 24 units. All of them used the same law firm, Lo & Lo Solicitors, also registered in the British Virgin Islands.

Urban Renewal Authority (URA) needs more transparency and regulation

Monday, March 15th, 2010

The URA receives HK$ 10 Billion each year from the Hong Kong government; it promulgates transparency and is registered as a non-profit organisation. However, the URA refuses to release a breakdown of its revenues and balance sheets. On its website (, you cannot find information about its shareholders and their respective shareholdings nor can you find detailed financial information about joint projects.

The URA works on joint projects with developers in Hong Kong and the latest one that sickens even the most devout of free market believers is the Tsim Sha Tsui project called the "Masterpiece" jointly developed by New World and the URA; New World has sold 39 units to business associates at the beginning of the private sales followed by sales of units to top management and their relatives to generate an artificial image of high demand and also to give buyers an opportunity to evade the payment of stamp duty.  This controversial sales tactic was adopted at the "Merton" in Kennedy Town - the last joint project between New World and the URA 5 years ago which generated an outcry from the public and others in the industry and yet 5 years later the same unscrupulous tactic has been allowed to recur.

Lawmakers need to step up the regulation of the URA and enact new rules to make the URA more accountable to the public, reduce its collusion with private developer through legal means and ensure that the URA’s powers are checked.

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