SINGAPORE – Lippo Group is currently awaiting a court verdict on the amount of damages it has to pay UOB after a long legal battle which started in 2014, and the Indonesian company’s woes may not be over.
The Straits Times has learnt that police are investigating the group’s subsidiary – Lippo Marina Collection (LMC) – over alleged fraud stemming from a court ruling in October 2022.
LMC is the developer of Sentosa Cove condominium Marina Collection.
The Appellate Division of the High Court had found LMC liable for using unlawful means in a conspiracy with real estate agents to sell properties financed by UOB.
The conspiracy resulted in UOB losing a large amount of money after it disbursed about $182 million in inflated home loans, financing more than 100 per cent of the purchase prices of the high-end apartments.
UOB is seeking to get $92 million from LMC, and a three-day hearing was held in January 2024 to determine the amount of damages the bank is entitled to.
On Feb 21, 2024, police confirmed ongoing investigations based on a report lodged by UOB in November 2022, a month after the bank won its appeal to overturn an earlier court decision.
When contacted, an LMC spokesperson said the firm is assisting the police with their investigation and that it would be inappropriate to comment further.
The Urban Redevelopment Authority website showed that LMC was delicensed on Aug 19, 2011, after the development of Marina Collection was completed.
This means the developer is no longer regulated under the Housing Developers (Control and Licensing) Act, which governs the sales and purchase of uncompleted private residential properties.
UOB initiated the lawsuit against LMC and several others in 2014 for their involvement in a conspiracy to obtain inflated housing loans totalling $182 million.
The 124-unit Marina Collection was launched for sale in late 2007, but only 42 units were sold by March 10, 2011, after a series of cooling measures were introduced.
UOB disbursed about $182 million in mortgages between December 2011 and September 2013 to purported buyers of 38 units in the condominium.
By April 1, 2015, all 38 buyers had defaulted on their loans.
In a decision dated Oct 28, 2022, the Appellate Division of the High Court found that LMC had intentionally provided false or inflated purchase prices to buyers in the option-to-purchase forms.
LMC also gave substantial “furniture rebates” of 22 per cent to 34 per cent that were used to offset cash payments required for the condo purchases, which were not disclosed to UOB.
These rebates inflated the prices of individual properties in option-to-purchase forms.
Furthermore, LMC concealed the true identities of buyers, with most being nominees for Indonesian investors rather than the intended owners.
Appellate Division judges Belinda Ang, Woo Bih Li and Quentin Loh expressed concern over LMC’s lack of acknowledgement regarding the seriousness of its actions.
They highlighted that by deceiving UOB, Lippo had also misled appraisers and other buyers who relied on the stated purchase price in the option to purchase.
This not only affected the valuation of other units within Marina Collection, but also other similar projects.
The inflated purchase prices presented a distorted picture of a segment of the property market, the judges said.
