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Rasif associate admits to property scam involving inflation of sale prices

He conspired with missing lawyer David Rasif to overstate flat valuations in clients’ applications for bank loans, thereby convincing banks and the CPF Board into providing higher loan amounts.

In the process, the scam, involving the sale of 22 properties, netted a sum close to $1 million.

Yesterday, Goh Chong Liang, 37, a former director of a real estate company, pleaded guilty to his role in the scam. He had committed the 22 offences between December 2003 and September 2004.

The extent of the scam was uncovered by the Commercial Affairs Department soon after Goh was first convicted and jailed in 2005 for another offence.

The court was told that Goh, after showing buyers the flat for sale, would propose to the sellers’ agent a higher price. This inflated price included purported “renovation costs” for the flat.

For example, the sales price of a flat at Block 327 Tah Ching Road was inflated by $65,000 during a transaction in April, 2004. The sum was then paid to Danis Interior Design — a “shell” business Goh had set up to receive cashback monies on the pretext of carrying out renovation work.

Payment for these “renovations” would then be made through Rasif’s law firm, which would then deduct a share, as “legal fees”, from this amount.

However, renovations were never carried out and Danis Interior Design pocketed a total of $917,500.

Goh also prepared false income documents for most of the buyers. He made CPF contributions to some of the buyers’ CPF accounts from “shell” companies to create a false impression to the banks that the buyers were gainfully employed and had the financial capability to finance the repayment of the loan.

Besides the above offences, Goh also pleaded guilty to 14 other charges of forgery. After investigations against him started, Goh approached Rasif and lawyer David Tan, in March last year for help. Goh claimed Rasif told him to forge documents, and to find someone to sign on the forged documents.

These documents were used to deceive Commercial Affairs Department investigators.

In mitigation, defence lawyer Peter Fernando urged the Court to impose three short consecutive custodial sentences and backdate them to the start of Goh’s remand on May 11.

Goh “was not the mastermind” of the conspiracy, said Mr Fernando. Instead, the two lawyers, Rasif and Tan, played crucial roles in the offences, he said.

Mr Fernando added: “Furthermore, the buyers, sellers and their respective agents all had a hand in the commission of the offences, as rightly stated by the prosecution.” Mr Fernando also argued that Goh’s financial share in the scam was minimal — ranging between $5,000 and $7,000 per transaction.

The prosecution had also not provided evidence to show that the banks had suffered financial losses as a result of the inflated sale prices of the flats.

“Instead, the respective banks which approved the inflated housing loans stood to gain financially in that the inflated prices meant in turn additional interest earned on the housing loan repayments,” argued Mr Fernando.

While Deputy Public Prosecutor Jason Chan accepted that there were no actual losses, he said the impact on banks’ operations would have been “adverse”.

Sentencing has been adjourned to Thursday. Goh is the first to be charged in Court for his role in the scam. The whereabouts of Rasif, who disappeared last year allegedly taking with him about $12 million of his clients’ money, are not known.

On the charges of conspiracy to cheat, Goh faces a maximum seven years’ jail and a fine. On the forgery charges, he faces a maximum two years’ jail and a fine.

Source : Today - 27 Jul 2007

Alexandra is becoming the new alternative to the Central Business District as prime office rents continue to escalate, said property consultancy Cushman & Wakefield yesterday.

According to their latest report, more banks have shifted some of their back room operations to Alexandra Road, which is preferred over locations such as Tampines and Changi, because of its proximity to town.

Alexandra Road is just 10 minutes away from the CBD and has good links to the rest of the island via major road and expressways, said the firm.

Office rental rates there are about 40 to 50 per cent lower than what CBD offices are commanding.

The report added that prime office rates rose 23.1 per cent quarter-on-quarter to average $11.51 psf/month in June, surpassing the 1996 peak by at least 35 per cent.

Source : Today - 27 Jul 2007

We feel so helpless, say owners

They own flats but still have no place to live.

At least five first-time home-owners have lost thousands of dollars after signing up for renovation work with an interior design company cum contractor.

The owners of the company, a married couple, can no longer be found and the company’s registered address is no longer valid.

The wife, who was declared a bankrupt recently, apparently re-registered one of her companies two days after petitioning for bankruptcy and still collected payment from clients after that.

A check with the Accounting & Corporate Regulatory Authority shows several lawsuits had been filed against her and her husband, either for ‘credit-related’ or ‘contracts-related’ reasons since 2001.

PROMISES TO DELIVER

The couple, who are involved in two companies, would persuade home-owners to sign up with them with drawings and promises to deliver.

After that, they keep calling their clients for money, without following the schedule of payment in the contract, on the pretext of starting work.

After a few days of work, the workers would disappear, leaving the flats in a mess.

The couple used to be active exhibitors at home fairs where they solicited for business.

Their shop unit is now boarded up and used as a warehouse by a hardware shop two doors away.

The owner of the hardware shop, who has been renting the unit for the past four months, said the interior design company closed down in January this year.

Previously, it was a show office that ‘was very nicely done up’. It had more than 10 employees.

He has seen letters from the Small Claims Tribunal sent to the unit. They were mainly from suppliers and subcontractors, he said.

Another interior design company next door has had angry people turning up thinking they are related to the couple’s company.

A worker, who declined to be named, said she knew something was wrong about six months ago when 10 people showed up at different times saying they were customers.

The worker added: ‘There were also subcontractors who came, as well as a property agent who said they had not paid rent for a few months.’

Music composer George Leong is one client who has been left in the lurch.

Mr Leong, 37, said he met the couple several times at their flat or outside but never at their shop.

He signed a contract with the company totalling over $27,000 in March this year.

According to the terms, Mr Leong had to pay 15 per cent upon signing, 40 per cent when work starts, 40 per cent upon measurement for carpentry work and 5 per cent on job completion.

He paid over $17,000 in four payments even before work started as he claimed the woman kept demanding for money.

Mr Leong said: ‘When she asked for money, she wanted it immediately. She said she needed the money to order tiles and book the workers.

‘In the end, I gave in because I thought it would be easier for her to do the work.’

Work on his Clementi flat started on 24 May and was scheduled to end on 23 Jun.

But Mr Leong said subcontractors turned up for two days to hack the walls but didn’t show up again. The place was left in a mess.

He said: ‘It was so hard to reach her after that. When I managed to talk to her, she gave excuses like she was on in a remote part of Johor and couldn’t talk.’

Soon after, her handphone line was cut off, and he lodged a police report on 20 Jun.

She had been recommended by a friend, who had also signed up with her, said Mr Leong.

He added: ‘She used my friend’s house as a showflat although it was only half-done. My friend didn’t have any complaints then, so I decided to go with her.’

After encountering problems, Mr Leong checked with his friend and found that he was also having problems with her. The friend had paid up the entire sum of over $20,000.

After his friend returned from work abroad in the middle of last month, he found notes from other home-owners under his door.

They asked if he had experienced any problems with the company, and if he knew how to contact them.

Mr Leong said: ‘That’s when I realised there were other people in our situation.’

The two friends got in touch with three other clients. The five parties had collectively paid more than $100,000 to the couple.

Among them is a Malay couple who had got the woman to arrange for a bank renovation loan for them.

BORROWED $25,000

They borrowed $25,000 from the bank and instructed it to be handed over to the woman.

The Malay woman and her fiance, who declined to be named, are now saddled with a five-year loan and must repay $500 a month.

She said: ‘We thought it would be easier for her to have the money so she could get work done faster.’

The five parties have made police reports but have been advised that theirs are civil cases due to breach of contracts.

Mr Leong said it would be hard for them to take further action as they would incur more costs.

Another affected owner, Mr Alex Lee Ngan Kui, 30, said: ‘We are helpless. We can’t go to the Small Claims Tribunal because our claims are more than $10,000, and we can’t afford to hire a lawyer.’

The owners have staked out the couple’s flat in Jurong and gone to the listed office address but have not been able to locate them.

When The New Paper went to the couple’s flat, no one answered the door, although there were several pairs of shoes and sandals, and a child’s blue sandals on the shoe rack outside.

Mr Leong said: ‘If they had been frank about their problems, I wouldn’t have minded if they returned part of my money. Instead, they just vanished.’

FILED BANKRUPTCY, CONTINUED TAKING PAYMENT

Just two days after petitioning for bankruptcy, the woman re-registered one of her companies and continued to accept payments from clients.

A check with the Accounting & Corporate Regulatory Authority (Acra) showed she petitioned for bankruptcy on

A bankruptcy order was made on 15 Jun. The Acra check showed that the company was first registered on 16 Dec 2003, and its registration expired on 16 Dec 2006.

It was cancelled on 3Apr 2007 before being re-registered.

In between the expiry and re-registration, the woman issued official receipts bearing collecting money from clients.

Mr George Leong, paid her the day before she filed for bankruptcy. He showed The New Paper his receipt dated 24Apr 2007. The company is listed as a renovation contractor.

Her other company was registered on 22 Sep 2006.

Her husband was the owner until 18 May 2007, when it was transferred to her. The business is listed as ‘manufacture of furniture and fixtures of wood’.

There were also five writ of summonses filed against her from 2001 to 2007 for amounts ranging from $2,213 to $13,489. These were for contracts and credit-related issues.

The husband also faced several lawsuits against him from 2001 to 2003, for credit and negligence-related issues.

An Acra spokesman told The New Paper that under section 26(1) of the Business Registration Act, a person who is an undischarged bankrupt cannot own or manage a business without the permission of the High Court or the Official Assignee.

The penalties for breaching section 26(1) is a fine up to $10,000 or a jail term up to two years or both.

After being alerted to the case, a spokesman for the Insolvency & Public Trustee’s Office said it is investigating.

Source : New Paper - 27 Jul 2007

St Patrick’s View sold to TG Development for $79 million

ST PATRICK’S View, off Telok Kurau Road, has been sold en bloc to TG Development Pte Ltd (TGD) for $79 million, 25 per cent higher than the indicated price when the collective sale was launched three months ago.

St Patrick View

On its bullish bid, TGD managing director Ong Boon Chuan said: ‘The prices for Districts 9, 10 and 11 are quite high but there is room for more upside in the outskirts.’

Giving a contrarian view, Mr Ong also said that while higher asking prices for en bloc sites may lead to resistance from developers, it also means there will be ‘less supply in the market’.

Marketed by Colliers International, executive director (Investment Sales) Ho Eng Joo added: ‘The benchmark price of St Patrick’s View reflects developers’ continued confidence and optimism in the East Coast area, as demand for new residential projects still remains strong.’

At $79 million, the price works out to $682 per sq ft per plot ratio (psf ppr), including an estimated development charge of $302,318 for the 83,013 sq ft site.

Mr Ong said that TGD plans to build a five-storey development of about 100 units with unit sizes of between 1,000 sq ft and 1,400 sq ft. The launch is targeted for mid-2008.

The breakeven cost is estimated at around $1,000 psf, which means new units have to be sold in excess of this.

Over in Kembangan, Savills Singapore is marketing the launch of the 32-unit D’Oasia by Monfort Land at about $910 psf.

To date, more than 50 per cent of the apartments have been sold during a recent private preview. The development is expected to be completed by Dec 30, 2010.

Savills is also marketing the collective sale of Trendale Tower on Cairnhill Road.

The indicative price of $180 million is 12.5 per cent higher than it was three months ago when it was put up for sale through an expression-of-interest exercise.

The latest price works out to about $2,477 psf ppr with the breakeven estimated at between $3,100 and $3,200 psf. Savills director of investment sales Steven Ming said: ‘It is reasonable to project a selling price of a new project on this site at between $3,500 and $3,600 psf.’

The 21,709 sq ft site has a plot ratio of 2.8 and can yield about 36 units of 2,000 sq ft condominium apartments.

In the Clementi area, GRE Realty is marketing the sale of Park West Condominium through the expression-of-interest mode. So far, 75 per cent of owners have agreed to the sale.

The indicative price for the 633,638 sq ft site is $620 million to $660 million, inclusive of development charge of about $115 million. GRE Realty estimated that the breakeven price would be around $750-$780 psf.

Source : Business Times - 26 Jul 2007

The development cost for the future 99-year leasehold project could hit $3b

A state tender for the former NCO Club/Beach Road camp grounds yesterday drew seven bids with market watchers estimating bids could have topped the $2 billion mark or $1,250 psf of potential gross floor area.

Beach Road Site

The all-in development cost for the 99-year leasehold project is expected to be in the $3 billion region, analysts estimate.

Urban Redevelopment Authority revealed the bidders, but not their bid prices, under yesterday’s two-envelope system tender, where bidders had to submit concept proposals and tender prices separately. The tender attracted big names familiar with the local market such as CapitaLand, City Developments, Pontiac Land, Overseas Union Enterprise (OUE), Keppel Land and Cheung Kong Holdings.

And some of them have teamed up with heavyweight overseas partners like Dubai’s Istithmar (part of Dubai World group) and a unit of US-based Elad Properties (these two teamed up with CityDev). Morgan Stanley is believed to have partnered Pontiac. OUE, controlled by Indonesia’s Lippo Group and Malaysian tycoon Ananda Krishnan, is expected to rope in partners like Austria’s Raiffeisen Zentralbank (RZB).

Billion Rise Ltd (believed to be linked to Li Ka-shing’s Cheung Kong Holdings) partnered Keppel Land to put in two bids. OUE is also believed to have placed two bids, one through Beach Development and the other through Nicoll Development.

Such a strategy, of placing two bids, presumably gives the bidders an opportunity to present alternative concepts, whether at the same or different prices, and hopefully boost their chances of success.

Under the two-envelope system, the concept proposals will first be evaluated against a set of prestated criteria (including overall design concept, quality of architectural design, adaptive reuse of conservation buildings, and composition and placement of uses). Only proposals that substantially satisfy the evaluation criteria will be shortlisted.

At the second stage, the tender price envelopes of these shortlisted bidders will be opened and the site awarded to the highest of these bidders, provided this top bid meets the government’s reserve price.

Market watchers reckon the majority of bids at yesterday’s tender would be in the $1,000 to $1,200 psf per plot ratio range which works out to around $1.6 billion to $1.9 billion for the 99-year site which can have a maximum gross floor area of nearly 1.6 million sq ft.

Construction costs, fees and interest could amount to a further $900 million to $1 billion, bringing the likely all-in investment to about $2.5 billion to $3 billion.

The site can be developed into a project with nearly 1.6 million sq ft gross floor area, of which a minimum 40 per cent is for office use, and at least 30 per cent for hotel rooms. The rest can be for complementary retail and residential use.

The development will entail the conservation and restoration of the former NCO Club building and three blocks of the former Beach Road camp. The new towers in the building can be up to 45 storeys high.

Market watchers reckon that some of the schemes could possibly entail a high-rise tower with hotel rooms on the lower floors and apartments on the upper floors, seen in places like New York but novel in Singapore.

The release of the Beach Road site is part of the government’s strategy to alleviate the shortage of office space.

JP Morgan real estate analyst Chris Gee said: ‘The office rental market is the most volatile of all the investment property segments in Singapore.’

He noted that even before the close of yesterday’s tender, the URA had made known its plans to offer four other sites in the CBD which can be substantially developed into offices - two at Anson Road and two near the One Shenton condo project. The tender for the first of the Anson Road plots closed on Monday and was yesterday awarded to highest bidder Mapletree Investments at $1,021 psf per plot ratio.

The tender for the second Anson Road plot closes next month. The tender for a plot directly behind One Shenton closes in September, while that for the next-door site will be launched by the end of this month.

Source : Business Times - 26 Jul 2007