Keangnam lost round two of court case
Keangnam lost round two of court case
South Korea’s Keangnam Vina, the developer of Vietnam’s tallest building - Keangnam Landmark Tower in Hanoi, has lost its latest court battle with residents of the tower.
Last week, the owners of two units in Keangnam Landmark, Bui Thi Bao Quyen and her son, Pham Bao Duong, took Keangnam Vina to the Tu Liem District People’s Court in the capital. They requested that the developer adjust the value of their apartments, due to a miscalculation of the USD/VND exchange rate in the apartment’s sale, and inaccurate measurements of the units.
Apart from the fact that Keangnam Vina used foreign currency in the apartments’ sale, the company also added reinforced concrete pillars and electrical boxes into the units, but did not account for this in their calculations of floor space. Thus, the measurements listed in the contract were in fact larger than in reality.
The judge of a five-day court hearing announced that the developer had to adjust the value of the two apartments down by VND1.4 billion ($66,600) due to a miscalculation made when calculating the USD/VND exchange rate of the contract.
Regarding the measurements, the court accepted the method that Keangnam Vina used, however, refused to add technical boxes outside the apartment into the value.
According to the court, Keangnam Vina will have to reimburse around VND400 million ($19,000) to the buyers.
These were the second and the third apartments under prolonged dispute between Keangnam Vina and its residents, beginning in 2012.
The Keangnam Hanoi Landmark Tower is located on 4.6 hectares on Pham Hung street in the west of Hanoi, and is currently Vietnam’s highest building.
With the total investment capital of more than $1 billion, the 72-storey tower features a 5-star hotel, offices and apartments for lease, and two 48-storey apartment towers with a total of 922 apartments. All of the apartments were sold at an average price of $3,000 per square metre.
Starting operational since 2012, the development has suffered a slew of hardships, from labour accidents occurring during construction, fierce disputes with apartment owners on management fees, tax scrutiny for transfer pricing, and now a conflict over apartment measurements.
In April 2015, the foreign press reported that Keangnam Enterprises – the mother company of Keangnam Vina – faced bankruptcy and decided to sell the Keangnam Landmark Tower at the quoted price of $800 million to solve its financial difficulties. Some buyers were initially named, but none have confirmed their involvement with the buy-in yet.
