Canninghill Piers sales linked to money laundering suspect stuck in limbo as probe continues

INVESTIGATIONS into a wide-reaching money laundering syndicate have thrown partially paid transactions for 10 Canninghill Piers luxury properties into a state of limbo, including payments collected by developers so far.

With the police probe uncovering new information by the day, more uncompleted properties may soon be caught in the web. The value of seized assets has gone up from an initial S$1 billion reported on Aug 16 to S$1.8 billion on Sep 5. 

One of the 10 suspects caught in the massive police dragnet, Vang Shuiming, has been verified in court documents to have financed the purchase of 10 residential units at Canninghill Piers. The project is a luxury integrated development coming up on the former Liang Court site in River Valley. The 10 properties identified in court have been issued with prohibition-of-disposal orders by the police. 

One issue arising is whether the developers, City Developments (CDL) and CapitaLand Development, will be able to keep part of the sizeable funds collected so far in payment for these units. As the project is still under construction, payments would have been made according to a standard progressive-payment schedule. 

It is also unclear if the developers will be able to recover the units now frozen by court order to eventually resell them. 

“After payment is made to a developer pursuant to a sale-and-purchase agreement, the money belongs to the developer. Therefore, consideration must be from the perspective of the developer, and, given the circumstances of each case, how much knowledge the developer had surrounding the proceeds they have received,” said Denise Teo, director of disputes resolution practice group at Yuen Law.

“The procedure is such that once property (in this case, the payments for the property) is seized (or simply frozen by a prohibition order, if not physically taken), it is likely to remain seized until the conclusion of the criminal case, when the court will make an order on how the property is to be dealt with,” she added.

When a confiscation order is made by the court, the bank or developer must hand over monies collected to the authorities, Teo said. 

In response to queries from The Business Times (BT), CDL and CapitaLand Development said they were unable to comment as investigations are ongoing.

According to the standard payment schedule for uncompleted properties, an initial 20 per cent would have been paid upfront when the sale-and-purchase agreement was signed.  

The balance is paid progressively, in line with stages of construction of the project. The final payments, totalling 40 per cent of the purchase price, are made when the development receives its temporary occupation permit (TOP) and certificate of statutory completion.  

In the case of the 10 Canninghill Piers units now confirmed to be under probe, Vang would have paid possibly 30 per cent to 40 per cent of the purchase price for these units since the purchase, with a significant balance yet to be collected by the developers.

Canninghill Piers was launched for sale in November 2021. Prices ranged from S$1.16 million for a one-bedroom unit to over S$8 million for five-bedroom units, to S$50 million for a penthouse. Based on estimates, the 10 units linked to Vang, who was arrested on Aug 15, could have cost a total sum of between S$30 million and S$50 million.

Vang is also named in connection with an uncompleted property in Park Nova, a high-end freehold project on Tomlinson Road being built by Hong Kong developer Shun Tak. Launched in May 2021, Park Nova apartments were sold at between S$6.8 million and S$34.4 million during the month, according to BT’s checks on caveats data.

Under the Housing Developers Rules, a developer can treat the sale-and-purchase agreement as repudiated by the purchaser if any part of payment is unpaid for more than 14 days after it is due.  

The developer is then entitled to annul the agreement. It has the right to resell the property and keep 20 per cent of the amount paid, refunding the balance to the purchaser.

With police investigations ongoing, these contract terms are now in doubt and any outcome will depend on court orders, said Tris Xavier, associate director of integrated property practice group at Yuen Law.

New guidelines for developers to combat money laundering and terrorism financing in the Singapore property market kicked in on Jun 28, 2023. The guidelines, issued by the Urban Redevelopment Authority (URA), require developers to conduct checks on prospective buyers. They also spell out high-risk scenarios – such as unusually large transactions – that should be flagged to the authorities. 

URA’s guidelines further require ongoing monitoring of transactions. “Developers must, before issuing the notice of payment for TOP and for completion of sale, review the adequacy of the information and documents obtained” as a result of customer due diligence checks, to take into account new information on the buyer, their income, risk profile and source of funds.

BT understands that since the new guidelines took effect on Jun 28, the Canninghill Piers transactions now under investigation may not have been subject to requirements.  

Previous media reports have said that a single buyer from Fujian, China, had purchased 20 units at Canninghill Piers for more than S$85 million. 

It is believed that the current prohibition orders cover 10 of those units. 

According to previous reports, the 20 apartments sold to a single buyer included 10 three-room units priced between S$3.1 million and S$3.3 million; the rest were four-room units priced between S$5.3 million and S$5.6 million.

Latest caveats data as at Sep 8 shows that 680 units – or 98 per cent of the project – have been sold. The most recent sales lodged for Canninghill Piers over the last three months were for two five-room units transacted at about S$8.6 million each.     

Over the 99-year leasehold project’s launch weekend in November 2021, 538 units were sold at an average price of around S$3,000 per square foot.

Joint developers CDL and CapitaLand Development chalked up total sales of S$1.18 billion over that weekend, and moved 77 per cent of the project’s 696 units. 

The project is expected to be completed in 2025.