Chinese Estates Says Macau May Revoke Land Concession
Chinese Estates Holdings Ltd. (127), controlled by Hong Kong billionaire Joseph Lau, said the Macau government may take back a land concession amid a corruption probe, affecting home sales of HK$3.8 billion ($490 million).
The developer has the right to lodge an appeal, Chinese Estates said in a Hong Kong exchange filing yesterday. The company has collected HK$384 million of deposits on sales made for the La Scala project being built on the site, it said. The shares dropped, set for the lowest in more than three years.
Lau, an avid art collector, was named in April in the corruption trial of Ao Man-long, Macau’s former secretary of transportation and public works, in relation to land being developed by Chinese Estates in the only Chinese city where casinos are legal. Ties between Hong Kong tycoons and government officials have come under scrutiny since the arrest in March of the co-chairmen of developer Sun Hung Kai Properties Ltd.
“Cases like these further reveal the flaws in the system governing the interaction between developers and governments,” said Eric Cheung, a law professor at the University of Hong Kong. “They increase public concerns over the lack of transparency and insufficient monitoring of the governments in both Hong Kong and Macau.”
The company’s stock, suspended yesterday, was unchanged at HK$9 at the 4 p.m. close after falling as much as 3.3 percent. The shares have dropped 28 percent this year, compared with the 1.3 percent increase in the benchmark Hang Seng Index. (HSI)
“The Macau government would wait for final confirmation of the relevant judgment of the court early next week and then follow up,” Chinese Estates said in the statement.
Lau, who controls almost 75 percent of the HK$17.2 billion Hong Kong-based developer, has denied allegations that emerged in Macau court proceedings that he or his company may have given bribes to Ao, according to an April 17 statement by Chinese Estates.
Macau’s public works department “clearly indicated” it was aware of the investigation when it revised the land concession in March 2011, Chinese Estates said yesterday. The company signed contracts to sell apartments at La Scala because the revision had been granted, it said.
Hong Kong Chief Executive Donald Tsang last week apologized for “disappointing” the public and said the government will impose rules to require officials to disclose conflicts of interests, after having been criticized by lawmakers for accepting private jet and yacht trips offered by tycoon friends.
The city should make it a criminal offense for the chief executive to receive any advantage, including transportation and hotel accommodation, without approval, the Independent Review Committee for the Prevention and Handling of Potential Conflicts of Interests said in a report released last month.
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