Gov’t lawsuit against companies linked to collapse of Sin Fong Garden to start in December

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Macau (MNA) – Lai Si Enterprise Holding Limited indicated on a filing with the Hong Kong Stock Exchange on Tuesday that court hearings connected to a lawsuit lodged by Macau authorities against the company and other contractors for compensations linked to the collapse of Sin Fong Garden building will take place on December 4 and 5, 2019.

In its recent annual results report, the local contractor addressed some of the contingent liabilities facing the company due to civil lawsuits with the Macau SAR Government and subcontractors.

In October 2012, one of the supporting pillars of the Sin Fong building collapsed, with several flat owners blaming Lai Si and other contractors to have caused the collapse due to the dismantlement and construction of the foundation work undertaken in an adjacent new residential building project, to be at the root of the collapse

The incident forced the building’s inhabitants to leave the property, with about 200 people being relocated.

In September 2015 several of the flat owners of Sin Fong filed a lawsuit against several contractors, including Lai Si, seeking some HK$49 million (US$6.06 million) in compensation.

According to Lai Si, a report issued by technical advisers and experts hired by the Macau SAR Government later found out that an incident on a substandard supporting pillar was to blame for the collapse.

In October 2015, the MSAR Government also filed a lawsuit against four defendants, including Lai Si, in which it seeks a MOP12.8 million compensation for expenses incurred due to measures used to avoid the collapse of the building, to ensure the safety of residents and adjacent buildings, as well as the payment of technical advisers and experts it had hired to study the causes of the incident.

The lawsuit involved four companies, namely, Companhia de Engenharia e Construção Weng Fok, Limitada – owner of the Sin Fong Garden – Sociedade de Investimento e Desenvolvimento Tak Nang, Limitada, responsible for the Soho Residence project near the residential building, Lai Si, which was responsible for demolishing the building where the Soho Residence would be built, and Companhia de Engenharia e Construção Kin Sun (Macau), Limitada for the foundation work of the new building.

Court hearings linked to the lawsuit filed by the government will take place on December 4 and 5, while the date of hearings for another lawsuit filed by several flat owners of Sin Fong is yet to be confirmed.

‘After consulting the legal advisers of the Company as to Macau Laws, the Directors are of the opinion that it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and hence no provision is made to the consolidated financial information,’ Lai Si indicated in the filing.

Reconstruction works for the Sin Fong Garden were initiated in October of last year, with the Macao Jiangmen Communal Society having vowed to support 60 per cent of the MOP200 million in estimated costs for the reconstruction.

The new building will follow the original plan, with 30 floors, 144 housing units, a shop and 48 parking spaces, and will have reinforced foundations, with 39 columns added.