Tenants seek fund ahead of tower sale

Keangnam residents are afraid they’ll be left out of pocket once the sale goes ahead

In its letter addressed to the government, residents of the highest building complex in Vietnam claimed that Keangnam Vina was still handling a fund of $7.6 million which was collected from the buyers to pay for maintenance activities.

The company sold more than 900 apartments for the project in 2010 at an average price of $3,000 per square metre and extracted two per cent of their combined value to use as a maintenance fund, in accordance with legal requirements.

The law requires the firm to refund the extracted amount to the residents immediately after the establishment of the housing management board. However, three years after the establishment of the board, this has still not been done.

“Once they finish selling [the building] and return to their home country, we will not know how to get our money back,” said a resident who wished not to be named.

Meanwhile, the investor reportedly announced in an official document in March that the maintenance fund was valued at VND125

billion ($5.95 million), significantly lower than the residents’ estimate of VND160 billion.

Last week, a Seoul court allowed Keangnam Enterprises Inc. to sell Keangnam’s Landmark 72 to better cope with its liquidity crisis.

Keangnam Enterprises – the mother of Keangnam Vina – is currently undergoing a rigorous debt workout programme.

The court ruled that the decision is necessary to protect the interest of the company’s creditors.

Meanwhile, Deputy Prime Minister Hoang Trung Hai has also asked Hanoi People’s Committee to investigate the issue following the residents’ concerns.

In its letter to the government, residents claimed that several problems between them and the investor remained unresolved.

Obviously, chief among these concerns was that the investor might not be able to repay the maintenance fund of $7.6 million.

This difficulty came to the fore in April this year after the press reported that the building was to be put on the market at a price of $800 million.

The South Korean media reported recently that some investors with deep pockets had set their sights on the project. Some of the names in the rumour mill include Qatar Investment Authority and Goldman Sachs. However, so far, a buyer has yet to be confirmed.

According to Korean courts, with debts rising up to $1billion, the sale of Keangnam Landmark 72 was a necessary step towards restructuring the company.