What defines a hotel? The question has been exercising the finest legal and regulatory minds in Hong Kong in recent months. As we reported in WiC183, one of the territory’s prominent developers sold 360 ‘hotel suites’ at its Apex Horizon complex, telling buyers that they could live in them full time. That suggested they were really apartments, and that the whole thing was a ruse to help buyers avoid a new residential stamp duty imposed by the Hong Kong government to cool the real estate market.
The developer in question – controlled by Hong Kong’s richest man Li Ka-shing – raised HK$1.4 billion ($180 million) from the ‘hotel’ sale, but the government then called foul. And the debacle reached its conclusion this week when Li announced that Cheung Kong was rescinding the sale and would refund buyers in full, covering all their costs.
This came after Hong Kong’s regulator, the SFC, said it would take the company to court.
Cheung Kong executive director Chiu Kwok-hung was then quoted in the South China Morning Post as giving the following explanation: “We did nothing wrong. But we think we should support the government in their administration according to the law… society now needs harmony.”
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