A PYMNTS Company

New Zealand: Company to be prosecuted for real estate bid rigging

 |  July 8, 2019

According to a report in the South China Morning Post, A company owned by New Zealand property tycoon Ron Hoy Fong is facing prosecution from the country’s consumer watchdog in the High Court.

The Commerce Commission stated that it has entered into a settlement with Ronovation Limited to resolve the proceedings, with a penalty hearing to be scheduled.

“Ronovation [trading as Ronovationz] was set up in April 2009 and conducted business advising members on how to acquire and improve investment properties in Auckland. By March 2018, Ronovation had over 400 paid members,” the Commission stated. “The commission alleges that Ronovation developed rules in September 2011 to govern the conduct of members, including rules that prevented Ronovation members from competing for properties.”

The Commission stated that these rules “amounted to cartel conduct.”

The Commission started an investigation into Fong in 2017 after he released a video freely available to members of Auckland Property Investors Association (APIA) at the time.

According to The New Zealand Herald, the video encouraged people to target deceased estates, desperate homeowners facing foreclosure, developers on the brink of bankruptcy, divorcees and “dummies” who did not know the value of their home. The video told people to work in groups to drive down property prices and provide false names when making repeat offers.

Contacted by the South China Morning Post, APIA president Andrew Bruce said he had cut ties with Fong immediately after learning the details of the investment guru’s tutorial video.

“APIA has no association with him [Fong] or his company any more,” Bruce said. “As soon as we became aware of the DVD, and we saw what the DVD was, we parted ways.”

Full Content: South China Morning Post

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