The owners of 204 homes are in legal limbo after the luxury housing project in Tuen Mun was placed under receivership Police will examine the failure of the luxury residential project Villa Pinada which has left 204 buyers in legal limbo - but they stopped short of calling it an investigation. The Police Commercial Crime Bureau yesterday received a complaint regarding the development in Tuen Mun. A police spokesman said bureau officers would look into the incident for irregularities. 'We will follow up the complaint and find out more about the whole incident,' the police spokesman said. The Housing, Planning and Lands Bureau also asked the law firm representing the developer, Gold-Face Holdings, to submit a detailed report on the project. The Tuen Mun property project by Gold-Face's wholly owned subsidiary, True Gold Investments, was near completion, but the company failed to repay about $200 million in syndicated loans to a group led by the Bank of China in Hong Kong. The bank on Tuesday appointed Ernst & Young Transactions as the receiver of True Gold, which had sold 204 flats worth $500 million. But Ernst & Young said it had recovered only $2 million of the $500 million. Wan Tai-min, a non-executive board director of Gold-Face, assured the buyers that they would be able to take possession of their almost-completed properties. He said the firm had received $35 million from a potential buyer and believed it could weather the storm. It was revealed on Wednesday that a sister project, the Aegean, was also in trouble. Its developer Profit Nation Development, another Gold-Face subsidiary, was also placed under receivership. Ernst and Young are now checking the records of Profit Nation Development relating to the sales and purchase agreements of the Aegean, also in Tuen Mun. The failure of the 319-unit Villa Pinada development and the Aegean have caused a furore as many people believe the laws regulating property developers are too lax. Property developers and business leaders yesterday said the incident was a rare and isolated case. In a TVB news report, Li Ka-shing, the head of Cheung Kong (Holdings), said he believed the existing regulations were adequate. Mr Li feared adding new laws would slow down business development and economic recovery. Centaline Property Agencies managing director Shih Wing-shing echoed his views. 'We have a very comprehensive and sophisticated mechanism to regulate property development. The developer is required to hand all the money generated from flat sales to a law firm,' said Mr Shih. 'It should only get the money back once the project is finished and all the outstanding costs have been cleared. So it is very rare for such a thing to happen in Hong Kong. 'The problem in this case is not that our laws are inadequate. We have to look into it more carefully and find out exactly what has gone wrong. It is too early to call for stricter laws, which will hamper property development.' Buyers of Villa Pinada last night met Democratic Party legislator Albert Ho Chun-yan for help. They fear they might still have to pay bank mortgages even as they fight to claim their properties. The Consumer Council said it had received 16 complaints concerning Villa Pinada and one complaint about the Aegean. The council will launch a study on whether it is necessary to review the Lands Department's process of approval for the sale of residential units in uncompleted projects. It also called on affected home buyers to contact its officers to seek more information. The Law Society said it was concerned about the incident and would follow its development closely. Meanwhile, Gold-Face said director John Wong Po-lung had resigned.
