HONG KONG: Shares of developer Henderson Land Development fell 2.6 percent yesterday, bucking the market's upward trend after official records failed to reveal the identities of buyers of its West Mid-Levels luxury project.

The developer sold 24 apartments in the famed residential project to different shell companies, registration records at the Land Registry showed.

The identity of the buyer, or buyers, is not known, as those shell companies are registered in British Virgin Islands, under whose laws the names of company directors need not be disclosed.

"It is not unusual for some wealthy or celebrity homebuyers to register their purchases using shell companies for tax or privacy reasons. But it is rare that almost all sold units in a single project were registered under names of shell companies," a research director at a local securities house, who prefers not to be identified, told China Daily.

The company has so far sold only 25 of the total 66 apartments in the development, which is located at 39 Conduit Road in West Mid-Levels, according to information gathered by investment bank JP Morgan.

What has added to the curiosity of some market watchers is that all 24 purchases were handled by the same law firm, Lo & Lo Solicitors, the records showed.

The blue-chip developer's stock slumped 2.6 percent or HK$1.45, to close at HK$53.95 yesterday after the news.

The benchmark Hang Seng index closed the day up 156.06 points, or 0.70 percent, at 22553.63 while the property sub-index was up 187.22 points, or 0.68 percent, at 27817.25.

"This is a rare case. But nothing appears unlawful. However, if regulators launch an investigation for the sake of transparency, it could weigh on the stock at least for the short term," the analyst said.

Henderson Land made the news last month when it announced that a buyer paid a world-record HK$88,000 per square foot of saleable area for a five-bedroom duplex at its West Mid-Levels project.

The developer declined to identify the buyer, citing privacy reasons.

"The buyer is a Hong Kong-registered company. But I believe [the owner] is from the mainland," Thomas Lam, general manager at Henderson's marketing unit told media last month.

The record unit price and the mystery surrounding the buyer's identity have caused some questions about the circumstances of the apartment sale.

However, Henderson Land Chairman Lee Shau-kee emphasized earlier that the buyer of the duplex was an independent third party, contrary to reports that the buyer is related to Yeung Sai-hong, who has a 32 percent stake in the project. Henderson owns 60 percent of the project.

"This is not a false transaction. The transaction is real," Lee told media late last month.

The 24 apartments were sold for a total of HK$3.18 billion, the same as what Henderson Land has previously revealed, according to data of the Land Registry.

(HK Edition 11/14/2009 page2)