Henderson Land Declines Legislative Council Invite to Discuss Failed Sales

Henderson Land Development Co. has declined an invitation to appear at Hong Kong’s Legislative Council next week to answer lawmakers’ questions related to failed sales of luxury apartments at one of its project.

Members of the Legislative Council’s housing panel on July 5 voted 7-to-1 to invite the developer, controlled by billionaire Lee Shau-kee, to the July 12 meeting. Henderson’s attendance would be voluntary, panel Chairman Wong Kwok-hing said at the meeting. The company declined the invitation in a press release last night.

The Hong Kong government has introduced measures to cool home prices and increased scrutiny of developers’ sales methods since Henderson’s October announcement that it sold an apartment at its 39 Conduit Road project for a record HK$88,000 ($11,300) a square foot. That was among 20 purchases that were canceled by prospective buyers, the builder said last month. The government has sought details on the sale agreements.

“The company feels it’s not appropriate to join the LegCo meeting at this stage” because it has already submitted details on the transactions and an investigation is still under way, said Erica Leung, Henderson Land’s spokeswoman.

Henderson submitted its responses to the government’s queries on the sales to the Council on July 5.

Hong Kong police and other law enforcement agencies are investigating the sales at the project, Transport and Housing Secretary Eva Cheng told lawmakers during the Legco session. Cheng declined to specify the other agencies and give a schedule for the investigation.

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Henderson on July 2 took out full-page advertisements in most local newspapers, claiming all transactions were “genuine” and “buyers weren’t connected to the company.”

Henderson used standard contractual terms in the transactions and booked the sales according to Hong Kong accounting standards, the statement said.

Henderson was questioned last month for a seventh time by the city’s government, which asked the company to provide copies of title deeds and additional details on how it calculated the interest penalty for late payments.

Hong Kong housing prices have risen 9 percent this year, adding to 2009’s 29 percent advance. Financial Secretary John Tsang in February announced a higher stamp duty on luxury properties and has pledged to raise the supply of land as it seeks to reduce the risk of a property bubble.

To contact the reporters on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

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