Lawsuit against PropNex subsidiary over ‘99-to-1’ deal dropped, says property group
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This was the second reported suit against PropNex Realty over a 99-to-1 arrangement.
PHOTO: PROPNEX
Therese Soh
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- Claimants withdrew their $849,287 lawsuit against PropNex Realty over alleged salesperson misrepresentation in a property transaction.
- The lawsuit involved a "99-to-1 arrangement," used for ABSD avoidance, and named PropNex Realty and a salesperson as defendants.
- PropNex is "pleased with the discontinuance" but won't comment. The withdrawal isn't expected to impact its financial performance.
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SINGAPORE – A lawsuit against PropNex Realty, a wholly owned subsidiary of PropNex, has been withdrawn, the real estate services group said in a bourse filing on Oct 17.
The claimants were seeking $849,287 in damages from PropNex Realty, the company indicated in a Feb 22 filing.
This was for the unit’s alleged breach of duty of care owed to the claimants, as well as for its vicarious liability arising from the alleged negligent misrepresentation by a PropNex Realty salesperson on a property transaction. PropNex was named as one of three co-defendants in the suit that was filed in the High Court of Singapore.
In the Oct 17 bourse filing, PropNex Realty said: “The company wishes to update shareholders that the claimants have discontinued and withdrawn the suit.”
It added: “Public records would show that the claimants in HC/OC 132/2005, namely Kevin Rahim and Jessica Tjitra, have discontinued the proceedings. PropNex is pleased with the discontinuance, but would prefer not to comment further.”
It did not respond to queries by The Business Times about the claimants’ reasons for withdrawing the suit.
BT reported in April that an Indonesian couple had sued PropNex Realty in February over a 99-to-1 transaction seeking $849,287 in claims.
In the lawsuit, the couple – Mr Rahim and Ms Tjitra – named the PropNex unit, alongside salesperson Amos Koh and CK Tan Law Corporation as defendants.
This was the second reported suit against PropNex Realty over a 99-to-1 arrangement, a tactic buyers often use to dodge the rightful additional buyer’s stamp duty (ABSD) payable on purchases.
Under such arrangements, a first-time buyer typically purchases a property, and within a short time, sells a 1 per cent share of the property to another party who owns an existing property. This allows the co-owner with the existing property to pay a lower ABSD than would otherwise apply to a second-property purchase.
PropNex added that the withdrawal of the lawsuit is not expected to have a material impact on its financial position and performance for the financial year ending Dec 31.
Shares in PropNex closed on Oct 17 5 per cent or $0.12 lower at $2.27. THE BUSINESS TIMES
