Chinese Estates: May Cancel Agreements With Buyers of La Scala Project
First Published Monday, 18th June 2012 01:24 am - © 2012 Dow Jones
By Yvonne Lee
HONG KONG--Developer Chinese Estates Holdings Ltd. (0127.HK) said Sunday it may cancel sales agreements for its luxury residential project La Scala in Macau and refund deposits to buyers should sites acquired for the residential project be seized by the government.
The Hong Kong-based developer controlled by tycoon Joseph Lau said in a statement that it received a notice of a preliminary hearing from the Macau government on Friday, stating that land concessions the company received in 2006 for five plots of land--where the company is building the residential project--are invalid and should be returned.
"The group is currently taking legal advice on the hearing notice and intends to make a submission strongly opposing the decision proposed to be made by the Macau government," Executive Director Lam Kwong Wai said in a statement.
Chinese Estates has already invested HK$2.8 billion (US$360 million) in the project and is considering seeking compensation for possible losses, the company said. In the meantime, construction work and presales of the La Scala project have been suspended.
The notice from the Macau government comes after the country's top court in May found jailed former official Ao Man-long guilty of additional counts of bribery and money laundering. The Macau Court of Final Appeal ruled Mr. Ao, the city's former secretary for transport and public works, was guilty of helping, in 2005, companies run by Mr. Lau and businessman Steven Lo to win a government tender for five plots of land near the Macau International Airport, in return for a HK$20 million bribe (US$2.6 million).
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