A few months after the fraud arrest of his wife in Ho Chi Minh City, local businessman Eric Chu Nap-Kee has sold a commercial and residential site on Hong Kong island at the heavily discounted price of HK$435 million ($55.46 million), according to a market source who spoke with Mingtiandi.
Chu, who is reported to have used funds from his wife’s business in Vietnam to fund acquisitions in Hong Kong, sold 3-9 Finnie Street in Quarry Bay for 35.8 percent less than the HK$678 million he paid for the asset in 2018, the source said on Wednesday, confirming a deal that was first reported by local news site HK01, which identified the buyer as Hong Kong developer First Group Holdings.
Chu’s fire sale came after his wife, Truong My Lan, founder and chairwoman of the controversial real estate investment firm Van Thinh Phat Group, was arrested by Vietnamese police last October on charges of fraud and illegal issuance of financial instruments.
Entities linked to the Van Thinh Phat empire have been scrambling to offload assets in Singapore and Vietnam following Truong’s arrest, including Singapore’s Viva Land putting up for sale an office tower and a five-star hotel along the city-state’s bustling Robinson Road last month at prices below what the group had paid to acquire the properties.
Tall Hotel, Small Lane
Chu is letting go of the 4,200 square foot (390 square metre) site at a price equivalent to HK$10,357 per square foot of its maximum buildable area of 42,000 square feet without having developed a new project on the plot since acquiring it in 2017.
In buying the site five years ago, the controversial investor had paid an 88 percent markup from the reported HK$360 million that the seller, local property veteran Henry Ng Chun For, had paid to acquire the plot two years earlier.
Located opposite the Quarry Bay MTR station on a small lane near King’s Road, the plot had already been approved for development of a 32-storey hotel with a gross floor area of up to 62,980 square feet at the time of Chu’s acquisition.
The vacant land is surrounded by tall buildings along King’s Road including King’s View Court, a 23-storey residential block by Cheung Kong Holdings, and is on a block which backs onto Swire Properties’ Taikoo Place commercial complex.
Citing a statement from First Group director Wei Shenyi, HK01 said the reported buyer declined to disclose any details about the acquisition due to confidentiality reasons. Mingtiandi reached out to First Group for comment but had not yet received a response at press time.
The Quarry Bay sale marks the first asset Chu has offloaded from a Hong Kong portfolio he has been building for more than a decade through barrier-breaking bids.
A market source told Mingtiandi that Chu has declined to discuss a potential sale of the Nexxus Building at 77 Des Voeux Road in Central, which Chu had purchased from a Morgan Stanley-Gaw Capital Partners-Pamfleet (now Schroders) venture in 2009 for HK$3.6 billion.
In that deal Chu paid a premium of around one-third above what the investment consortium had paid to acquire the 22-storey former Hang Seng Bank building three years earlier.
Chu also outbid foreign funds and other bidders to acquire The Wellington office tower on Wellington Street in Sheung Wan for HK$3 billion and is said to own a number of luxury residential properties in the city.
Vietnam Assets Frozen
Arrested together with three VTP associates last October, Chu’s wife Truong and her company are accused of illegally issuing financial instruments and fraudulently collecting trillions of Vietnamese dong from 2018 to 2019. (VND 1 trillion equals approximately $41 million).
With the company having ploughed much of the proceeds of its alleged Ponzi scheme into real estate, Vietnamese authorities have frozen assets held by 762 legal entities related to Van Thinh Phat while they resolve the case.
The impact of the fraud activity has spilled over into Singapore, where Viva Land, a property investment firm which shares management with Viva Land Management & Development JSC – a Ho Chi Minh City-based company headed by Truong has begun marketing prime assets at steep discounts following Truong’s arrest.
Representatives of Viva Land in Singapore have previously denied any links between the two companies.
In January it was revealed that Viva Land had appointed CBRE and JLL to market the Robinson Point office tower at 39 Robinson Road with an indicative price of S$470 million, or around six percent less than the S$500 million Viva Land paid for the asset in 2020.
Sitting next to the 21-storey freehold office block is the 134-key Hotel Telegraph that the controversial firm acquired last year for a record-breaking S$240 million.
Viva Land is said to have put that property, formerly known as the So/ Hotel Singapore on the marketing for around S$200 million, or about 20 percent less than the record-breaking price it had paid to acquire the property in May of last year.