Failed project's buyers likely to get their flats, say experts
The failure of a property development in Tuen Mun may have caught 204 buyers by surprise, but analysts say their ownership rights should not be affected and the project is likely to be completed.
The 319-unit Villa Pinada development is being built by True Gold Investments, which is wholly owned by locally listed Gold-Face Holdings. A total of 204 flats had been pre-sold, generating $500 million. However, True Gold was placed in receivership on Friday after it failed to repay about $200 million in syndicated loans to the Bank of China.
Analysts said the failure of a property development was rare in Hong Kong, and it highlighted the plight of smaller-sized developers since the collapse of the property market.
A Bank of China spokesman yesterday confirmed the receivership action.
Ernst & Young Transactions has been appointed as the receiver of True Gold.
Surveyor Pang Shiu-kee said the home buyers were still likely to get their units as the project had already received an occupation permit and a certificate of compliance.
'The completed units should be able to be delivered to the buyers eventually, although the timing is subject to the progress of remaining furnishing works,' he said.
A statement from Ernst & Young said: 'The receiver is seeking legal advice on the rights of all purchasers, contractors and other parties.
'The receivership will cover all assets of True Gold Investments. The receiver is reviewing the books and records, the sales and purchase agreements of Villa Pinada, progress of construction and the amount due to the contractors.'
The property development failure is the latest blow to True Gold, which is also facing a repayment claim of $69.02 million from the Chun Wo Group.
