UOB's $181m suit over 'inflated housing loans'
UNITED Overseas Bank (UOB) has launched a $181 million suit against a subsidiary of Indonesian giant Lippo Group and seven individuals, claiming they conspired to get inflated housing loans.
The loans were for the purchase of 38 condominiums at the high-end Marina Collection in Sentosa - which was developed by Lippo Marina Collection (LMC). Launched for sale in 2007, each condo at the 124-unit development costs an average of $6 million.
But out of the 38 units financed by UOB, 37 have defaulted.
The bank alleges that LMC and the other defendants failed to inform it of "very substantial" discounts of between 22 and 34 per cent given to the buyers. That meant that the buyers paid a lot less for the units than what was indicated on the loan forms.
The loans were therefore not just in breach of Monetary Authority of Singapore rules, but were also in excess of what the buyers actually had to pay for the 99-year leasehold units.
UOB says it gave out the loans after Lippo's lawyers confirmed that the buyers had paid the remainder of the purchase price - but this was untrue. The remainder was instead set off against discounts or "furniture rebates".
In addition, UOB alleges that many of the buyers were fronts and did not have the financial means to service the housing loans.
Instead, the real buyers were five people who had links with the two property agents involved in the alleged scam - ERA housing agent Goh Buck Lim and freelance housing agent Aurellia Adrianus Ho.
UOB alleges that sums ranging from $200,000 to $1.2 million were transferred between bank accounts of the "buyers" and several defendants.
This was to give the bank the impression that whoever was applying for a loan had at least $200,000 in their UOB accounts - one of the criteria for the loan to be granted.
According to UOB, one of the so-called buyers admitted to being paid $100,000 to act as a proxy.
LMC denies being part of any conspiracy to cause loss to UOB and will vigorously defend the claims made against it.
In its defence, LMC says that the loans were a matter solely between the buyers and UOB, and that it had no knowledge of any alleged misrepresentation of the purchase price. It added that the bank should have done its own independent checks.
The developer also said it only dealt with the buyers through Mr Goh. It was the agent who asked if LMC could give a discount in the form of furniture rebates.
LMC agreed to give rebates of between 25 and 34 per cent to promote the sale of units in the development, adding that this was a "fairly common sales and marketing strategy". LMC says it was not aware of Mr Goh or any of the buyers concealing the rebates from UOB.
The bank is represented by Tan Kok Quan Partnership and LMC by Premier Law. The other defendants are defended by Straits Law.