The creditors of cash-strapped property developer Goldin Financial Holdings said it has no right to sell its Kowloon Bay headquarters, escalating a dispute over the 28-storey building’s ownership.
Cosimo Borrelli and Ma Siu Ming of specialist restructuring, insolvency and forensic accounting firm Borrelli Walsh, have been appointed receivers and managers of Goldin Financial Global Centre, the building in question, by Goldin’s creditors. They said in a statement late on Monday that Goldin did not, in fact, have the ownership of the property on Kai Cheung Road, and that any sale proposed by the developer would not be valid.
“None of Goldin Financial, [subsidiaries] Cheng Mei or Goal Eagle control [subsidiary] Smart Edge or the property … have any power or authority to sell Smart Edge or the property … the receivers are the only authorised representatives able to deal with the affairs of Smart Edge, including the property,” they said. Smart Edge directly owns Goldin Financial Global Centre and the land it is built upon.
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Goldin, which is chaired by billionaire Pan Sutong, and its creditors are both currently claiming ownership of the property. The developer said in annual result announcement on September 30 that it had entered into a provisional sale-and-purchase agreement for the building with an independent third party for HK$14.3 billion (US$1.8 billion) the previous day.
A day before, on September 28, the receivers and managers engaged Knight Frank as the sole agent to find buyers for the tower for no less than HK$12 billion, according to a statement issued by the property consultancy.
Goldin’s liabilities amounted to HK$18 billion in total as of June 30, according to its annual accounts, which were published last week. It’s cash reserve, however, stood at HK$23 million, having dropped sharply from HK$2.4 billion as of December 31 last year. Trade in its shares was halted the same day and closed at HK$1.01. The stock has lost more than two-thirds its value from a year ago.
The developer has aggressively acquired assets in Hong Kong in recent years and has been struggling with piling debt, as a result. It had used Goldin Financial Global Centre, a grade A tower, as collateral for loans.
It said in a filing to the Hong Kong exchange on July 16 that it had been informed by its creditors on July 13 that it must immediately repay about HK$3.5 billion in loans raised last year against the building.
It did not disclose any agreed payment schedule for the loans, but said the creditors had stepped up their pursuit and were seeking court approval to gain access to some of its accounts and premises, as well as Goldin Financial Global Centre.
Goldin has moved the High Court to stop this, and said it held the office property for “investment and rental purposes”.
More from South China Morning Post:
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This article Cash-strapped developer Goldin’s creditors say it can’t sell Kowloon headquarters first appeared on South China Morning Post