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20-01-20, 17:55
Redas ‘appalled’ by NUS study which claims industry engages in insider trading
By ASYRAF KAMIL
The study, led by Professor Sumit Agarwal, found that the top managers of Singapore’s real estate developers played golf with each other more frequently after the announcement of a Government Land Sales programme, and their winning bids for the tenders were 14.4 per cent lower than the winning bids put in by those who did not play golf.
17 JANUARY, 2020
SINGAPORE — The Real Estate Developers' Association of Singapore (Redas) has categorically rejected any suggestion that the industry engages in any form of price-fixing, insider trading or collusion.
This comes after the National University of Singapore (NUS) Business School published the findings of a research paper on Wednesday (Jan 15) claiming there is “evidence of insider trading in the land market”.
The study, led by Professor Sumit Agarwal, found that the top managers of Singapore’s real estate developers played golf with each other more frequently after the announcement of a Government Land Sales programme, and their winning bids for the tenders were 14.4 per cent lower than the winning bids put in by those who did not play golf.
In a tersely worded media statement on Friday, Redas questioned the methodology used in the study and said it reserves the right to examine the findings in order to address what it called “faulty assumptions” in the paper.
“We are appalled by the lead researcher’s unsubstantiated assertion and the conclusions drawn by the authors are misleading,” Redas said.
“They cast aspersions on the conduct of the many reputable real estate businesses in Singapore and create distrust between the public, the authorities and the private sector.”
Read also: What’s the link between developers playing golf with each other and their bids for government land auctions? An NUS study has the answer
Prof Sumit, the lead researcher of the study, is the Low Tuck Kwong Professor at the School of Business, and he is a professor in the departments of economics, finance and real estate at NUS.
The other authors of the study are Professor Sing Tien Foo, Assistant Professor Qin Yu and Ms Zhang Xiaoyu from the Department of Real Estate at NUS.
Redas said that it takes the allegations seriously and pointed out that the study “asserts that they ‘find evidence rejecting the collusion hypothesis’”.
However, the association said that it is “disingenuous that this was not included in the media release for the report”.
“The findings also clearly do not support the authors’ further conclusion that there is ‘insider trading in the land market’ and that there is a link between golfing and developers’ land bidding behaviour,” Redas said.
The assertions by the researchers of the study would affect the collaborative partnership between the various stakeholders in the built environment industry and the authorities that has contributed to “a Singapore brand renowned for its transparency and no-nonsense business environment”, the association said.
“In the interest of the community and the nation at large, researchers should publish papers which provide objective and balanced perspective and contribute constructive comments to ensure a stable and sustainable property market,” Redas said.
Speaking to Bloomberg previously, Redas president Chia Ngiang Hong had also dismissed the findings of the research paper.
“Even if there’s an exchange of information, it’s not a guarantee that you will win the bid,” he said.
“Real estate executives play golf quite often. To say we play golf just to discuss land sales or business is presumptuous.”
By ASYRAF KAMIL
The study, led by Professor Sumit Agarwal, found that the top managers of Singapore’s real estate developers played golf with each other more frequently after the announcement of a Government Land Sales programme, and their winning bids for the tenders were 14.4 per cent lower than the winning bids put in by those who did not play golf.
17 JANUARY, 2020
SINGAPORE — The Real Estate Developers' Association of Singapore (Redas) has categorically rejected any suggestion that the industry engages in any form of price-fixing, insider trading or collusion.
This comes after the National University of Singapore (NUS) Business School published the findings of a research paper on Wednesday (Jan 15) claiming there is “evidence of insider trading in the land market”.
The study, led by Professor Sumit Agarwal, found that the top managers of Singapore’s real estate developers played golf with each other more frequently after the announcement of a Government Land Sales programme, and their winning bids for the tenders were 14.4 per cent lower than the winning bids put in by those who did not play golf.
In a tersely worded media statement on Friday, Redas questioned the methodology used in the study and said it reserves the right to examine the findings in order to address what it called “faulty assumptions” in the paper.
“We are appalled by the lead researcher’s unsubstantiated assertion and the conclusions drawn by the authors are misleading,” Redas said.
“They cast aspersions on the conduct of the many reputable real estate businesses in Singapore and create distrust between the public, the authorities and the private sector.”
Read also: What’s the link between developers playing golf with each other and their bids for government land auctions? An NUS study has the answer
Prof Sumit, the lead researcher of the study, is the Low Tuck Kwong Professor at the School of Business, and he is a professor in the departments of economics, finance and real estate at NUS.
The other authors of the study are Professor Sing Tien Foo, Assistant Professor Qin Yu and Ms Zhang Xiaoyu from the Department of Real Estate at NUS.
Redas said that it takes the allegations seriously and pointed out that the study “asserts that they ‘find evidence rejecting the collusion hypothesis’”.
However, the association said that it is “disingenuous that this was not included in the media release for the report”.
“The findings also clearly do not support the authors’ further conclusion that there is ‘insider trading in the land market’ and that there is a link between golfing and developers’ land bidding behaviour,” Redas said.
The assertions by the researchers of the study would affect the collaborative partnership between the various stakeholders in the built environment industry and the authorities that has contributed to “a Singapore brand renowned for its transparency and no-nonsense business environment”, the association said.
“In the interest of the community and the nation at large, researchers should publish papers which provide objective and balanced perspective and contribute constructive comments to ensure a stable and sustainable property market,” Redas said.
Speaking to Bloomberg previously, Redas president Chia Ngiang Hong had also dismissed the findings of the research paper.
“Even if there’s an exchange of information, it’s not a guarantee that you will win the bid,” he said.
“Real estate executives play golf quite often. To say we play golf just to discuss land sales or business is presumptuous.”