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UPDATE 1-Macau says Chinese Estates' property deal invalid
August 15, 2012 / 10:31 AM / 5 years ago

UPDATE 1-Macau says Chinese Estates' property deal invalid

* Macau alleges unlawful acts involved in deal

* Chinese Estates has 15 days to appeal

* Company says seeking legal advice; shares flat (Adds background on case, Macau, share information)

HONG KONG, Aug 15 (Reuters) - Macau invalidated a land sale to Chinese Estates Holdings Ltd, controlled by billionaire Joseph Lau, and alleged that unlawful acts were involved in the deal, in the second high-profile scandal to hit a Hong Kong developer this year.

Macau warned in June it could declare the sale invalid after a prosecutor alleged that a former Macau official was paid a HK$20 million ($2.58 million) bribe by Lau and another prominent tycoon Steven Lo to push through the transaction.

The scandal comes a month after Thomas and Raymond Kwok, the billionaire co-chairmen of Sun Hung Kai Properties, and Rafael Hui, Hong Kong’s former No.2 public official, were charged in a bribery investigation surrounding Asia’s largest developer.

Illegal acts were involved in the land deal, the Macau government said in a statement on Wednesday. It was not immediately clear how it came to its decision before a corruption trial involving Lo and Lau that starts next month.

Chinese Estates said in a statement late on Tuesday that it was seeking legal advice on the notice.

The company’s subsidiary Moon Ocean, previously owned by Lo, has 15 days to object to the decision or appeal to the courts.

Chinese Estates is planning to build a luxury development named after the Milan opera house near Macau’s casino-lined Cotai Strip. The company said it has pre-sold 304 apartments at the multi-tower La Scala, generating sales of HK$3.8 billion and deposits of HK$384 million.

The invalidation of the residential development in Macau, the only place in China where nationals are legally allowed to casino gamble, comes at a time when gambling growth is slowing sharply and the government is moving to put a lid on corruption.

Property brokerage Jones Lang LaSalle is also assisting Macau’s anti-graft body with inquiries into the corruption case.

The former official allegedly bribed, Ao Man-long, was Macau’s secretary for transport and public works and the most senior government figure ever arrested by Macau’s anti-graft agency. He is already serving 29 years in jail for accepting bribes to speed approval of projects.

Lau, known for his lavish red wine and fine art collection, has denied any wrongdoing. The divorced tycoon’s love life is a staple of Hong Kong’s tabloids, with Lau linked to a string of former Miss Hong Kongs.

Lo has also testified he did not pay a bribe.

Shares in the $18 billion Chinese Estates, of which Lau owns 75 percent, have fallen close to 30 percent since the start of the year. They traded flat on Wednesday against a 0.9 percent drop on the benchmark Hang Seng Index.

Lau, 61, is Hong Kong’s fifth-richest man, according to Forbes, worth $6.5 billion as of February. He was one of the first people to buy a Boeing 787 Dreamliner for personal use. ($1 = 7.7570 Hong Kong dollars) (Reporting by Anne Marie Roantree and Farah Master; Editing by Ryan Woo)

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