Cheung Kong

Lawmaker demands probe into Cheung Kong's hotel room sale

PUBLISHED : Tuesday, 05 March, 2013, 12:00am
UPDATED : Tuesday, 05 March, 2013, 3:50am

The city's securities watchdog has been asked to investigate property giant Cheung Kong's sale of suites at its Apex Horizon hotel in Kwai Chung.

The request by Civic Party legislator Dennis Kwok Wing-hang came as Cheung Kong vice-chairman Victor Li Tzar-kuoi reiterated that the sale completely complied with the law.

Kwok wrote to the Securities and Futures Commission yesterday saying the sales fell into the definition of a "collective investment scheme", so prior approvals should have been sought from the commission before the offer could be made to the public.

Asked if the sale was misleading, Li, who is in Beijing for the Chinese People's Political Consultative Conference session, said: "It completely abides with the law."

Li, a son of billionaire Li Ka-shing, declined further comment, saying only: "We support the government to govern in accordance with the law."

In his letter, Kwok, a barrister, urged the commission to look into the matter to protect investors' interests.

"Based on my understanding, there are or will be more hotel investment schemes of a similar nature," he wrote.

A commission spokesman yesterday said it was not prepared to comment.

The sale of suites in the hotel made headlines last month as it was the first time in Hong Kong that a developer had sold hotel rooms, classified as commercial property, individually to buyers.

It allowed them to avoid the government's anti-property speculation taxes on transactions of residential units.

Most of the 360 rooms on offer were snapped up in days.

There were reports that buyers had been told they could live in the suites themselves, and to get around the law, rent they paid would be returned to comply with hotel licence requirements.

But officials have warned investors of the high risks involved and said the government would take action if the rooms were used for private residency.

Late last month, the government revised the anti-property speculation measures and announced that the ad valorem stamp duties on both residential and non-residential properties would be doubled across the board.