Buyers: Please don’t bid for our flats at auction
The  Star 18/8/2005 BY NIK KHUSAIRI IBRAHIM

PENANG: Buyers of 20 flats at Jalan Penang Free here are pleading with potential buyers not to bid in the auction of their flats tomorrow.

“We are prepared to go down on our knees to beg potential buyers not to bid for our units,” said Taman Sri Penawar Residents Association chairman Ng Boon Chiew.

He said that the buyers had unknowingly become “secondary” purchasers of their units.

He claimed that the developer had indulged in “double selling” - selling the units to a subsidiary before selling them the same units.

“The subsidiary company failed to settle its bank loans and the units were put up for auction,” he told a press conference called by Batu Lanchang assemblyman Ng Fook On on Wednesday night.

Boon Chiew said when their units were put up for auction on April 1 and June 30, buyers begged potential buyers not to bid.

“The third round of auction is coming up tomorrow, please don’t bid, we are all still staying in our units,” Boon Chiew said.

He said the names of the secondary owners were not stated in the notices of auction.

“But the name of a company appears as the assignor (hire-purchaser) in the notices,” he said.

Boon Chiew added: “After each round of auction the value of the units would drop by 10%.

“We are trapped because of the loophole in the system that enables the developer to sell the same unit twice,” he said.

The secondary purchasers had bought their units in 1998 with some paying as much as RM160,000 for their unit.

“Now the units are being auctioned off for between RM99,000 and RM126,000 depending on the unit's location in the project and the number of room it has,” he said.

Fook On said the loophole mentioned by Boon Chiew should be plugged to protect innocent buyers.

“I have come across a few such cases like this before but the problem in those cases was solved when the developer paid up their bank loans,” he said.

A spokesman for the developer said he was aware that the secondary buyers were trying to prevent their property from being auctioned off.

“I have discussed the matter with them last Sunday and they were satisfied when I told them about our plan to sell off a piece of land to settle the bank loan taken by the subsidiary company.

“We are working very hard to resolve the issue amicably,” he said.

The spokesman said that the 20 flats were bumiputra units and were sold to the subsidiary company because there were no takers.

“The units were completed in 1997. We had to find a way to generate cash flow after we failed to sell off the units,” he said.