HSR International Realtors fined $74,000 over Thomson View en bloc bid

The 99-year leasehold Thomson View Condo is located along Upper Thomson Road.
The 99-year leasehold Thomson View Condo is located along Upper Thomson Road.PHOTO: HSR INVESTMENT SALES

SINGAPORE - HSR International Realtors has been fined $74,000 regarding the behaviour of its agents during the en bloc attempt of Thomson View Condominium.

The disciplinary committee of the Council for Estate Agencies (CEA) also imposed a condition on the company's licence where HSR may not undertake any collective sale work for a year from April 20.

HSR had been appointed marketing agent for the collective sale in September 2010.

The Collective Sales Committee (CSC) initially awarded the tender to a purchaser in September 2012 - Wee Hur-Lucrum, which was prepared to pay $590 million. However, the case was later taken to the High Court as minority subsidiary proprietors filed objections to the sale.

It later emerged during the discovery process that HSR had offered incentive payments to four subsidiary proprietors to sign the collective sale agreement.

The first subsidiary proprietor was offered an additional 10 per cent of the final purchase price of her shop unit, in exchange for her signing the collective sale agreement for her 10 residential units.

The second subsidiary proprietor, a couple, was offered an additional $185,000 of their unit and their son's unit.

The third subsidiary proprietor, a couple, was offered an additional $85,886 for their unit; and the fourth subsidiary proprietor was offered the reimbursement of his wife's business class return air ticket from Europe to Singapore, so she could sign the agreement.

The Court found that HSR had breached its duty as an adviser to the CSC by offering the incentive payments, which brought about a conflict of interest on the part of HSR - as the agency placed its own interest (to collect the commission) and the interests of the four subsidiary proprietors over the interests of the minority subsidiary proprietors.

The Court also ruled HSR had breached its duty of transparency by not disclosing the incentive payments to the CSC or the subsidiary proprietors.

The Court then dismissed the application for collective sale by the majority subsidiary proprietors.

Investigations by CEA subsequently revealed the lead property agent in HSR's sales investment team had approval from HSR's management to offer the incentive payments.

The intention was to pay out the incentives through the commission from the collective sale.

CEA's disciplinary committee then took action against both the lead property agent and HSR.

On April 20, HSR was sentenced to two counts of continuing to act on behalf of a client where to do so would place their interests in a potential conflict with those of the client, without declaring in writing to the client a conflict of interest.

HSR was ordered to pay a financial penalty of $37,000 for each count.

Disciplinary action was also initiated against the lead property agent who offered the incentive payments; however the agent passed away before disciplinary proceedings were completed.