Name: SCMP
Telephone: +852-2680-8888

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Enoch Yiu

Peggy Sito

Joyce Ng

Cheung Kong (Holdings) will refund deposits and cancel the sales of its hotel suites after a securities watchdog probe found the deals breached the law as unauthorised investments.
The property giant chaired by Li Ka-shing raised HK$1.4 billion in February by selling 360 hotel units at its Apex Horizon project in Kwai Chung.
The sales drew scrutiny because the developer used a legal loophole to try to help buyers avoid paying a residential stamp duty that was aimed at cooling the property market but did not apply to hotel rooms.
However, avoiding the duty was not the reason regulators gave for blocking the deals.
The Securities and Futures Commission said an agreement had been reached with Cheung Kong to unwind the sales.
The developer will refund the deposit and any part payments together with interest at 2 per cent per annum above the prime rate from the time of the payment to the end of this month.
It will offer buyers HK$10,000 in legal and other expenses.
An SFC investigation found the sales to be a collective investment scheme (CIS) - a project involving a group of small investors. But to do this under local law, Cheung Kong must first seek SFC approval for promotional documents to make sure they disclose all investment features and risks before any sales.
The SFC ruled the hotel unit sales to be a CIS because the day-to-day management of the hotel is in the hands of a separate operator, not the individual buyers.
The SFC had earlier informed Cheung Kong that it planned to take the case to court, but that action is no longer necessary.
SFC chief executive Ashley Alder said: "The SFC considers this is a sensible outcome. The SFC will monitor the progress by the Cheung Kong parties to unwind the sale to determine if further action is required."
Cheung Kong executive director Justin Chiu Kwok-hung said: "We did nothing wrong. But we think we should support the government in their administration according to the law … society now needs harmony. We want to see this matter resolved quickly."
The company told buyers in a letter that "if the buyer does not agree to cancel the provisional sale and purchase agreement, the SFC may bring proceedings in the Court of First Instance and apply for a [court] order that the contracts be declared void."
A Cheung Kong spokesperson said the company would reconsider an option to list its hotel on the Hong Kong stock exchange.
One buyer who signed a provisional agreement for sale and paid a deposit of HK$200,000 said she had not decided whether to accept the compensation offer.
"I wanted to buy it for myself to live in, and the developer and agents had told me I could do so. They are just outrageous," she said, adding staff did not let her read the hotel operation agreement when she signed the deal.
In 2001, Cheung Kong cancelled a promotion after the SFC investigated a plan to link rebates for its Victoria Towers development in Tsim Sha Tsui to the performance of the stock market.

 


Hong Kong’s failed land tender reflects weak outlook, derails urban renewal efforts

Hurun Rich List: China’s wealthiest lose money from slowing economy and market slides

Hong Kong developers CK Asset, Sun Hung Kai, Swire to feel earnings pain: Moody’s

Hong Kong’s CK Asset prices Blue Coast II in Wong Chuk Hang at 20% below development cost

Li Ka-shing

Cheung Kong's sales of Apex Horizon hotel suites cancelled over investment breach

Cheung Kong's Apex Horizon project in Kwai Chung. Photo: Sam Tsang

Harry's view

Cheung Kong chairman Li Ka-shing. Photo: Sam Tsang

The Apex Hotel in Kwai Chung. Photo: Edward Wong

Cheung Kong loses out over Apex

The Apex Horizon in Kwai Chung. Photo: Edward Wong

Business

Companies

Property

Hong Kong & China

Watchdog rules that deals for Cheung Kong's suites at prestigious Apex Horizon complex broke law, with 360 deposits to be refunded


Cheung Kong (Holdings) will refund deposits and cancel the sales of its hotel suites after a securities watchdog probe found the deals breached the law as unauthorised investments.


Cheung Kong