Lawmakers question government action on developer's blog pitch

PUBLISHED : Tuesday, 07 December, 2010, 12:00am
UPDATED : Tuesday, 07 December, 2010, 12:00am

Legislators are demanding to know why the government left it up to the Real Estate Developers Association to investigate allegedly misleading remarks by a Cheung Kong (Holdings) director instead of doing so itself.

The row blew up after William Kwok Tsz-wai, real estate executive director of the Li Ka-shing flagship, posted comments on the internet urging buyers to be 'quick, quick, quick' to speculate in flats in one of its developments which he said was not affected by new government measures to cool the market.

'I don't understand when the government, that is the Lands Department, has the power to request the developer to explain the matter, it doesn't invite Kwok to explain his comments directly,' Democrat lawmaker Lee Wing-tat said.

Kwok made a posting on his Sina Weibo miniblog on November 19, hours after the government announced that an extra stamp duty on flats bought and resold within 24 months would apply from the next day. 'Buying Festival City II will not be affected by the new government measures. 12 o'clock is coming soon. Quick quick quick ... the world of speculation is welcoming you,' he wrote.

The comments were deemed misleading by the Transport and Housing Bureau because the transfer of ownership does not take place until a formal sales and purchase agreement is signed and stamped, meaning preliminary deals may still be subject to the extra stamp duty. It asked REDA to look into the issue.

Speaking at a meeting of the Legislative Council housing panel yesterday other lawmakers, such as Leung Yiu-chung and Fred Li Wah-ming, also asked why the government handed the case to the developers.

Secretary for Transport and Housing Duncan Pescod explained that it was working with the association because 'it's their responsibility, initially, to deal with the investigation of the situation'.

'Until we have the advice from REDA, it's immature for us to say we are going to do X, Y, Z,' he said. 'We want to know what their investigation says and then we are going to follow up as appropriate.'

He said the Lands Department was also following up the case and he expected investigations would not take too long to complete. As you pointed out, this is a microblog,' he said. 'It's very small number of words. It's a question of finding out exactly what was said and what was the context.'

Neither the official nor the bureau unveiled details of the investigation.

Some lawmakers said they were worried the case would be a repeat of Henderson Land's 39 Conduit Road saga, which involved a three-month exchange of letters to explain the cancellations of sales of flats with record prices.

Abraham Razack, lawmaker for the real estate and construction industry, backed Kwok, saying that his comment was based on the financial secretary's announcement which, initially, did not contain full details of the new measures.

Separately Chief Executive Donald Tsang Yam-kuen said the latest measures had deterred speculation and there was a healthy adjustment in the market.