UOB awarded $17.7 million in civil suit against Lippo Marina Collection over inflated housing loans

Straits Times

3 days ago

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UOB was also compensated for lost profits it could have earned through lending its funds to other customers, a component known as the credit spread.
SINGAPORE - UOB has been awarded $17.7 million in claims against Indonesian developer Lippo Marina Collection (LMC) and two property agents, Mr Goh Buck Lim and Ms Aurellia Ho, in a long-running civil suit that began in 2014.
The High Court's assessment of the damages dated June 30, 2025, follows a key ruling by the Appellate Division of the High Court, which in 2022, overturned an earlier judgement and found LMC, a unit of Lippo Group, liable for conspiring with the property agents to mislead the bank into disbursing inflated housing loans.
The police commenced investigations into LMC following the October 2022 court ruling.
The court noted that the conspiracy caused UOB to suffer substantial losses after it financed more than 100 per cent of the purchase prices of 38 condo units in Marina Collection, a high-end waterfront residential enclave developed and sold by LMC.
UOB had granted approximately $182 million in home loans between December 2011 and September 2013 to the purported purchasers of the 38 units, all of whom defaulted on their loans by April 2015.
UOB, represented by a legal team led by Mr Eddee Ng of Tan Kok Quan Partnership, had sought to recover $92 million in losses. The court recognised about $53 million in claims but deducted $37.2 million to account for repayments and rental income collected by the bank. UOB also received $2.3 million in statutory interest.
The lawsuit centred around a rebate scheme concealed from UOB.
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The 124-unit Marina Collection in Sentosa Cove was launched for sale in late 2007, but only 42 units were sold by March 10, 2011, after a series of cooling measures were introduced.
The courts heard that for subsequent condo purchases , LMC gave substantial 'furniture rebates' of 22 to 34 per cent that were used to offset the cash payments required for the purchase .
These subsidies, undisclosed to UOB, led the bank to grant larger loans based on the full sale price stated in the purchase agreements.
At the time, banks were allowed to lend up to 80 per cent of the purchase price of a residential property.
UOB's loans exceeded the cap based on the inflated purchase prices.
However, the actual purchase prices were significantly lower. The excess was paid to the buyer, so each of them gained a significant cash benefit from the purchase.
In a brief judgement assessing damages dated June 30, 2025, Justice Aidan Xu found that UOB had suffered losses from the concealment of the subsidy, for which he awarded about $50.8 million in 'excess loans' losses. This formed the bulk of the damages.
UOB was also compensated for lost profits it could have earned through lending its funds to other customers, a component known as the credit spread.
The court accepted UOB's evidence that there was sufficient demand for loans.
Other awards included $720,535 for the cost of funding the loans; $967,093 for the credit spread and $180,053 for investigation expenses, including staff time and private investigator fees.
However, Justice Xu found that UOB had failed to mitigate its losses by not selling the repossessed condo units when there was recovery in the property market in 2017.
'UOB need not have sold (the units) in the midst of softening conditions: that would have been a risky course of action,' said Justice Xu in his brief remarks.
'But when the market turned in 2017, UOB should have started selling at that point.'
He also rejected UOB's argument that it was reasonable to delay mitigation while awaiting the outcome of the lawsuit.
'Wait and see is not what the law requires,' he said.
Justice Xu also pointed out that UOB's loss was reduced through mortgage repayments and rent collected from the properties, which amounted to about $37.2 million and that sum should be deducted from the total award.
'Notwithstanding the award, UOB intends to appeal the decision,' a UOB spokesman said in a statement to The Straits Times.