SINGAPORE – A $181 million lawsuit filed by United Overseas Bank (UOB) against developer Lippo Marina Collection (LMC) and seven individuals went to trial this week.
UOB which commenced legal proceedings in 2015, is accusing the subsidiary of Indonesia’s Lippo Group of being involved in a conspiracy with seven individuals to get inflated housing loans to buyers of condominium units, and is seeking damages and costs.
The seven individuals are Mr Goh Buck Lim, also known as Rick; Ms Aurellia Adrianus Ho, also known as Filly; Rick’s sons Goh Han Rong Clarke and Goh You Wei Ewis; Filly’s daughter Jennifer Janeth; Filly’s nephew Erfan Syah Putra and his wife Theodora Budi Halimundjaja.
The loans granted and disbursed between December 2011 and September 2013 were for the purchases of 38 units in the Marina Collection – a high-end waterfront residential enclave, developed and sold by LMC. By April2015, all 38buyers had defaulted on their loans.
UOB’s lawyer Eddee Ng of Tan Kok Quan Partnership said the alleged conspiracy helped LMC dispose of units in the face of difficult market conditions with the actual price of the units being fully financed by UOB.
In his opening statement, Mr Ng said LMC saw strong sales when it was launched for sale around December 2007. But after a series of property cooling measures introduced by the Government in 2009, sales fell from 30 units sold between December 2007 and June 2008 to just nine units for the whole of 2010.
LMC then hatched the alleged conspiracy with ERA property agent Rick and freelance property agent Filly.
Elaborating on the alleged conspiracy, Mr Ng said LMC gave substantial “furniture rebates” of 22 per cent to 34 per cent, which were deliberately concealed from UOB.
The price of the property stated in the Option to Purchase form was thus inflated to the extent of the furniture rebates.
As a result, the 38 purchasers were each granted loans of between $4.2 million and $5 million, which were in excess of the maximum amounts permitted under Monetary Authority of Singapore regulations.
Rick and Filly facilitated the alleged conspiracy by procuring 32 of the 38 buyers to lend their names and act as fronts for the purchases of their respective units with housing loans from UOB.
To deceive UOB that these buyers have the means to finance the housing loans, sums ranging from $200,000 to $1.2 million were round-tripped between the UOB accounts of the buyers as assets under management at the time of their loan applications. Having such assets was one of the criteria for the loans to be approved.
UOB said the loans were given out after LMC’s lawyers confirmed that the buyers had paid the remainder of the purchase price, when the remainder was in fact set off against the furniture rebates.
LMC accepted cheques instead of cashier’s orders for the completion payment despite the latter being the usual practice for such payments. It also did not bank in the cheques, and instead paid into the buyers’ accounts various amounts representing the excess of the furniture rebates over the completion payment.
The trial which started on Wednesday is scheduled to run 18 days.
Three witnesses have given their testimonies in the first two days of the trial.
On Thursday (Nov 19), LMC, defended by senior counsel Siraj Omar of Drew & Napier, suggested that former UOB employee Ann Ong from the mortgage sales team was aware of the furniture rebates and did not include that in the loan application forms. Hence, the loan quantum was significantly larger, which was in Ms Ong’s interest, as she would have got a higher commission.
Under cross-examination by Mr Omar, Ms Josephine Tan Pei Sze, who is team head of mortgage sales, agreed that Ms Ong would have got higher commission.
“Yes, but by not much, I would assume,” she said.
Ms Tan also agreed with Mr Omar that the sales representative has a duty to verify the identity of the loan applicants.
Mr Omar then tried to show how UOB’s staff had been negligent by giving an example of how Ms Ong could have processed one of the buyer’s loans without having met the buyer.
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