R&F Properties’ Australian unit pays fine to settle dispute
Chinese developer R&F Properties said a legal dispute involving an investment in Australia, which almost sent its local subsidiary into liquidation, had been resolved after payment of a fine.
R&F Mega Property, an arm of the Hong Kong-listed and Guangzhou-based developer, which owns a high-profile residential project in Brisbane, was ordered to be wound up by the Supreme Court of the state of Victoria earlier this month. A Deloitte partner was appointed as liquidator, The Australian newspaper reported.
“The problem was settled, and the company will not be liquidated,” Michael Lee, corporate finance director at R&F Properties, told the South China Morning Post in a phone interview.
Without elaborating, Lee said the dispute had been caused by miscommunication with creditors. However, he did confirm that the unit has paid tens of thousands of Australian dollars as a fine to settle the case.
R&F Properties has been one of the most active Chinese developers in buying global properties. Apart from projects in Malaysia and Korea, Australia has been the company’s key target and it currently owns four projects in the country.
R&F Mega Property made a splash in 2014 when it paid A$46 million (US$35.2 million) – more than double the price the previous owner paid a year earlier – for a 4,600 square metre development site in South Brisbane.
Named “Brisbane One”, the development, which is set to be the city’s tallest towers in the south, will comprise more than 600 apartments, with a stock value of more than A$400 million.
R&F Properties bought another site in Brisbane in 2015 for A$82.5 million – triple the price that a local developer had paid two years earlier.
However, with Chinese buyers making a beeline for the Australian market, foreign investment in real estate has become a controversial issue in Australia as many residents blamed Chinese buyers and other foreign nationals for driving up house prices in the country, which can bring additional political and legal risks to Chinese investors.
This month, Treasurer Scott Morrison has ordered the disposal of another 15 Australian residential properties bought by overseas buyers. The original sales were in breach of the law and bring the total number of homes forced to be sold since 2015 to 61, with 25 of them bought by Chinese.
Chinese investors are also suffering setbacks at home in China as regulators have imposed a number of restrictions lately on outbound dealmaking in a bid to curb capital outflows.
In response to the tightened capital controls, Lee said R&F will extend the investment period for overseas acquisitions and reduce the deal amount to minimise the impact.