Regulator afraid to take on Cheung Kong, say Apex hotel suite buyers

PUBLISHED : Tuesday, 31 December, 2013, 3:35am
UPDATED : Tuesday, 31 December, 2013, 3:35am

Buyers of Apex Horizon hotel suites yesterday accused the Securities and Futures Commission (SFC) of being afraid to take legal action against Cheung Kong for allegedly misleading buyers about the suite sales.

The 15 protesters, among 20 buyers who have turned down an offer of compensation after having their purchases of hotel rooms cancelled by Cheung Kong subsidiary Pearl Wisdom, urged the developer to offer more cash.

Buyers' deposits have already been returned, but the 20 are demanding further compensation equal to the deposits they put down. The buyers said they were still willing to purchase the suites.

The property giant, headed by chairman Li Ka-shing, raised HK$1.4 billion in February by selling the rooms, taking advantage of a legal loophole to allow buyers to avoid paying residential stamp duty. Buyers were assured that the sales were legal.

But the SFC found evidence that the sales constituted a collective investment scheme - a project requiring SFC approval of promotional documents to ensure they disclosed investment details and risks.

In May, Cheung Kong made a deal with the SFC to cancel the sales of all 360 rooms and refund deposits. The 20 buyers, who had paid deposits of between HK$600,000 and HK$900,000, rejected Cheung Kong's compensation offer of HK$10,000 plus interest on the deposits.

The buyers presented petitions to the SFC and to Financial Secretary John Tsang Chun-wah yesterday.

"If the SFC has sufficient grounds to say that the sale of Apex Horizon [suites] … was illegal, it should take legal action against [Cheung Kong]," buyer Heung Kwok-shing said.

"We feel that the SFC did not take action because it feared the powerful conglomerate. The vendor was too big to fail and too big to jail so it could escape justice. The SFC should urge the vendor to compensate buyers misled into buying the units."

Cheung Kong said it would make good any "reasonable loss" suffered by buyers.

Calls seeking comment from the SFC were not returned.