Originally Posted by Unregistered
Yes, it is common knowledge that minority owners could be given extras (so called "premiums") in order to secure their agreement.
In a small development next to Lock Cho Apartments, the sole objector was "compensated" by the chairman of the MCST out of his (the chairman's) own pocket in order to get the 100% consensus. The CM did not mind losing $50k because he bought his unit donkey years ago cheap, while the objector was the last to buy into the estate at the peak.
While the transaction was still "under the table", nobody other than the CM suffered and so no one complained. That's OK.
In another development in east coast area, three owners (out of 168 units) were given similar compensation, but because the amount involved was quite large, the CM or the Sales Committee could not afford it. The housing developer-purchaser contributed the funds. This is how they performed the trick --
The marketing agent paid the three minorities and then bill edthe developer for "professional services" rendered for another project. So the MA got reimbursed. None of the other 165 owners suffered because the estate was sold at the market price.
Now you mentioned about Regent Garden. This is completely different.
Regent Garden agreed to sell at $34.0m. in February 2007, but 6 owners objected. So majority must file for STB approval and at the STB hearing, the minorities specifically quoted the following reasons of their objections:
1. price much below market value even as at February 2007;
2. the sale was NOT TRANSPARENT because (a) there was no public tender, and (b) there was only ONE bona fide offer from Allgreen Properties. The only other offer from Tira Properties could not be bona fide because Tira was a $2 company formed only in January 2007, barely a month ago. How could Tiara have the means to offer $30.0m, screamed the main objector, a Mr. Alan Liu?
As the result of these objections, STB ordered a re-valuation and DTZ returned with a much higher valuation at $39.7m.
At the second mediation session, STB asked if the purchaser were prepared to top up the price to $39.7m., and if so, STB would issue a sale order, otherwise the sale would be rejected. The session was adjourned for the majorities' lawyer to consult the buyer.
And the buyer's lawyers held a couple of "without prejudice" negotiation meetings with the sellers' lawyers and agreed to top up the price, and the sellers' lawyer was asked to prepare the supplementary agreement.
24 hours later, the buyers' lawyer served notice that ALL THE SIX MINORITIES have withdrawn their objection and now agreed to the sale at the original price of $34.0m., and the sellers were given 24 hours to withdraw their STB application because they, the sellers, now have 100% consensus, so claimed.
The rest is history; the sellers admitted that the buyers approached them and they did receive extras, but refused to disclose the amount. The buyers' lawyer, a top legal titan, admitted to Justice Lee that payment was made, but the argument was that the buyer was "merely helping the majority owners to obtain 100% consensus" and therefore there is nothiing wrong about it. (all these information have been filed in court)
The interesting thing is that they got the MD of Knight Frank as their " INDEPENDENT expert witness" and the MD filed an affidavit to say that it is common practice for "developers to contribute to such payment of premiums", but he also said that in such cases, it was always the majority owners or the marketing agent who did the negotiation with the minorities, not the purchaser negotiating directly with the minorities.
Even more interesting is that Knight Frank is currently the sole marketing agent for at least six developments belonging to Allgreen -- and Mr. Tan, MD of Knight Frank can be an "INDEPENDENT" expert witness? You can verify this from the websites of Knight Frank and Allgreen.
And the plot gets thicker. The minority owners have filed an "appeal" against the STB decision and the High Court doesn't know what to do with this "appeal" because the minority owners have declared that they had withdrawn their STB objection, thus they have no "locus standi" to make such an appeal.
Knowing that their appeal stands on quick sand, the keyman of the minority group is now putting both physical and psychological pressure on the majority owners to sell to Allgreen by renting out his unit (block 55 #01-04) to a bus operator to house TWENTY-TWO, yes 22 male bus drivers in a three-bedroom unit with just two toilets! Pay a visit to Regent Garden at 53 - 55 West Coast Road, directly opposite the Varsity Park, to find out yourself.
Do you, and other readers, feel that it is legally and morally correct for the purchaser to agree to a topping up with the majority owners, then buy out the minorities under the table and then claimed that the sellers have 100% agreement? Our legal bigwig seems to claim so...... because the negotiations were "without prejudice" and therefore there was no offer to top up....blah, blah, blah....
If Mr. Singh wins his argument, many of us in the legal service are going to change jobs -- where is the justice??????
