Chinese home builder Agile’s chairman arrested over indecent assault
HONG KONG, Aug 31 — Hong Kong police have arrested the chairman of one of China’s largest property developers, Agile Property Holdings, in connection with a case of alleged indecent assault, the firm said today.
Chen Zhuo Lin, known as Chan in Cantonese, was arrested yesterday, Agile said in a filing to the Hong Kong stock exchange. The arrest comes at a time when Chinese property companies are under pressure from government efforts to make housing more affordable in the world’s second-largest economy.
A 50-year-old man named Chan made a statement at Wan Chai police station yesterday after which he was arrested, and must report back to police in October, the police told Reuters in an email. The crime squad is still investigating the case.
Chen (picture), who has not been charged, has been released on bail. Agile said the arrest “has not affected and will not affect the normal business and operations of the group.”
Investors punished Agile stock, which was the biggest faller among Hong Kong-listed real estate companies today.
It was down 4.8 per cent 15 minutes before the close of trade, when the Hang Seng Properties and Construction Index was up 0.02 per cent.
“In our view, the arrest has not only hurt the company’s reputation by a certain extent, but may also affect the company’s future strategic development,” Deutsche Bank analyst Jacphanie Cheung wrote in a note.
Chen’s four brothers all work for the company, but Chen has been the key man in charge of land purchase negotiations.
Deutsche Bank said the company’s bonds would be weighed down by the investigation, while J.P. Morgan said the arrest would dent the company’s reputation but not its operations.
Hong Kong police confirmed in an email to Reuters that a 28-year-old woman claimed to have been assaulted on July 10 by Chen, at a unit on Purves Road.
Chen owns a home on Purves Road in the luxury district of Jardine’s Lookout, which overlooks Happy Valley racecourse, local media reported.
The Chinese-language press has reported that a personal assistant of Chen’s had levelled the accusations. When contacted by Reuters about the alleged assault prior to and after Chen’s arrest, the company did not respond.
Chen, who founded the company, earned a salary of 3.7 million yuan (RM1.8 million) last year from Agile, according to a Thomson Reuters database. As is the case at many listed Chinese developers, the company patriarch controls the bulk of the stock. His family trust, Top Coast Investment, owns 63 per cent of the company’s shares.
Mainland home builders have found it increasingly tough to borrow money after Beijing has legislated to curb property speculation and limit the runaway gains in house prices.
That has meant restrictions on how many properties Chinese people can buy, crimping sales for developers which rely on advance purchases to fund existing projects.
Agile has US$3 billion in debt and a stock-market value of US$4 billion.
It posted property sales of 31.5 billion yuan in 2011, ranking it ninth among listed Chinese developers. — Reuters