Point of contention: People walk into the UOB building in Singapore. The bank says it was misled about loans for luxury properties in the Marina Collection development. — AFP
SINGAPORE: UOB is seeking to get S$92mil from Indonesian developer Lippo Marina Collection (LMC) over losses incurred from disbursing approximately S$182mil in inflated home loans.
The Appellate Division of the High Court had in October 2022 overturned an earlier decision, finding LMC liable for using unlawful means in a conspiracy with real estate agents to sell properties to be financed by UOB.
A three-day hearing that started on Jan 29 is focused on determining the amount of losses UOB is entitled to.
The housing loans, granted and disbursed between December 2011 and September 2013, were intended for the purchase of 38 units in Marina Collection, a high-end waterfront residential enclave developed and sold by LMC, a subsidiary of Indonesia’s Lippo Group.
UOB, represented by lawyer Eddee Ng of Tan Kok Quan Partnership, is not only seeking to recover the outstanding principal amount of the housing loans but also the cost of funding those loans, expenses related to investigations into the conspiracy, and costs associated with the repossession of the units.
Additionally, UOB aims to quantify its claims by considering what it could have earned from lending the funds to legitimate borrowers, along with statutory interest on the outstanding principal sum of the loans.
The long legal battle started in 2014 and concluded in 2022.
In a decision dated Oct 28, 2022, the Appellate Division of the High Court found that LMC had issued an option to purchase (OTP) to each buyer, intentionally providing false or inflated purchase prices for their respective units.
The courts had heard that LMC gave substantial “furniture rebates” of 22% to 34% that were used to offset cash payments required for the condo purchases.
The furniture rebates, which were not disclosed to UOB, inflated the prices of individual properties in OTP forms by the value of the rebates.
These misrepresentations were deemed pivotal as the entire financing and conveyancing processes for the 38 units were directly influenced by the inflated purchase prices.
LMC’s failure to disclose the actual purchase prices was seen as an effort to secure a loan higher than what would be obtainable if the furniture rebates had been accurately presented to UOB, noted Ng in his opening statement.
“The conspiracy was planned by Lippo’s director, Woo Pui Lim, and the second defendant, Rick Goh, to brazenly circumvent the government’s property cooling measures,” said Ng, pointing out that LMC had collaborated with the purchasers to deceive UOB.
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.
By December 2013, 36 buyers had defaulted on their loans. By April 1, 2015, all 38 buyers had defaulted on their loans.
UOB’s executive director and head of group credit management Kenneth Gan testified on the first day of the hearing that the conspiracy resulted in the bank suffering losses amounting to about S$92mil after it financed more than 100% of the purchase prices of the condominiums.
The court heard that as part of the bank’s efforts to mitigate losses, the repossessed units were rented out for rental income.
As at Oct 31, 2023, UOB had collected about S$24.5mil in rental income. By Oct 6, 2023, the market value of the 37 units, excluding one unrepossessed unit, was S$139.48mil. — The Straits Times/ANN
