The fate of a US$3 billion Hong Kong real-estate privatization scheme hung in the balance yesterday as the government tried to prevent a potentially embarrassing collapse of the world's largest property trust sale.
The launch of the planned selloff of 180 shopping malls and 79,000 car parking spaces on public housing estates has been thrown into serious doubt by an elderly female tenant who challenged the decision in court.
Senior government officials including chief executive Tung Chee-hwa (董建華) and Financial Secretary Henry Tang (唐英年) met for another crisis meeting yesterday to decide whether the listing would go ahead today as planned.
But Tang said on Saturday the chance of seeing the scheme going ahead was "slim" given the legal uncertainties.
Local press, citing unnamed sources, reported that the government had decided to pull out of the controversial privatization scheme due to the "high risks" involved as the prospectus of the sale did not mention possible legal challenges.
It would only go ahead if the resident promised not to take the case to the Court of Final Appeal, they said.
An announcement was originally due at 4pm yesterday but it has been pushed back due to "legal problems," a Housing Authority spokeswoman said.
On Friday the city's highest court, the Court of Final Appeal, allowed 67-year-old Lo Siu-lang (
The pensioner was seeking a judicial review of the listing of the so-called Link Real Estate Investment Trust (REIT), claiming the deal undervalues public assets, short-changes the public and threatens to lead to rent rises for public housing tenants.
Outspoken legislator Emily Lau (
"They have known a long time ago that there has been public discontent about the sale. They should deal with this problem first but they chose to ignore people's voices," she said.
Lau, head of pro-democracy group the Frontier, also blamed the lack of transparency as the root cause of the difficulties.
"The Frontier has tried to discuss with them about the plan for a long time but that was also ignored. When we did get a chance to speak to them, they did not want to disclose much information. I hope they have learned their lesson now," she said.
Andrew To, a district councillor and one of Lo's representatives, blamed what he called an undemocratic government for the hurdles.
"There has been a lot of criticism about the sale. The legislators have told the government to pull out and there have been talks about judicial review, yet they went ahead with it without public consensus," he said.
To said even scrapping the listing would cause less damage than going ahead as more lawsuits could be filed against it.
A fresh lawsuit was heard by the High Court on Saturday evening as a disgruntled investor sought urgent leave to apply for a judicial review and the return of her money.
But her application was promptly rejected by the court. It ruled her case covered a private and civil matter and that she should seek compensation with the Link REIT instead.
The court delays have tied up billions of Hong Kong dollars borrowed by ordinary investors and institutions to buy shares in offering.
Public interest in the stock exchange listing of the REIT has been huge, with the original 10 percent of units offered for public sale oversubscribed 130 times.