Chinese Estates Says Macau Annuls Land Sale for La Scala
Chinese Estates Holdings Ltd. (127), controlled by Hong Kong billionaire Joseph Lau, said Macau declared a land concession invalid, affecting HK$3.8 billion ($490 million) of home sales.
A unit of Chinese Estates, Moon Ocean Ltd., can object to the cancellation within 15 days of the decision’s publication in a government gazette and can also appeal to the courts, Chinese Estates said in a Hong Kong stock exchange filing yesterday.
Lau will go on trial in Macau starting Sept. 17 on charges of bribery and money laundering. The 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 the March 2006 land purchase that was just canceled.
“The group is currently taking legal advice on the decision notice and the appropriate actions to be taken,” Hong Kong-based Chinese Estates said in the statement.
Shares of Chinese Estates are down 26 percent this year, compared with the 10 percent gain in the benchmark Hang Seng Index. Lau, who controls almost 75 percent of the HK$17.7 billion developer, has denied allegations that he or his company might have given bribes to Ao.
Chinese Estates has collected HK$384 million of deposits on HK$3.8 billion of contracted apartment sales made for the La Scala project being built on the site, according to a filing in June. The company said then that the city government had revised the land concession for the development in March 2011 with knowledge of the investigation of the land transfer.
Lau’s trial adds to the recent scrutiny of ties between Hong Kong tycoons and officials. The Hong Kong government in March arrested the co-chairmen of Sun Hung Kai Properties Ltd. (16), the city’s biggest developer, and has charged them with conspiring to provide a former chief secretary with payments and loans for unspecified favors.
Chinese Estates said in March that one of La Scala’s 7,000 square-foot (650 square-meter) penthouse units had been sold for HK$83.8 million. The Chinese territory has seen a building boom on the back of a surge in casino revenue.
Macau’s casino revenue grew to more than four times that of the Las Vegas Strip after the government allowed the entry of overseas operators in 2002, including Las Vegas Sands Corp. (LVS) and Wynn Resort Ltd., ending billionaire Stanley Ho’s four-decade monopoly. Visitors from the mainland fueled a 42 percent jump in gambling revenue last year.
To contact the editor responsible for this story: Andreea Papuc at email@example.com