Hong Kong developer walks away from HK$11.1 billion Kai Tak project, citing 'social contradiction and economic instability'

By Sandy Li and Pearl Liu sandy.li@scmp.com / https://www.scmp.com/business/article/3014075/hong-kong-developer-walks-away-kai-tak-project-citing-social-contradiction?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | June 18, 2019 1:52 PM SGT
The Hong Kong developer that beat out several of the city's biggest and wealthiest property groups for a commercial plot at the former runway of the Kai Tak airport in May has had a change of mind after less than a month, saying it will abandon the offer, citing "social contradiction and economic instability".
Goldin Financial Holdings told a telephone conference on Tuesday that it was rescinding its HK$11.1 billion (US$1.42 billion) winning bid for 4C Site 4 at Kai Tak, forfeiting its HK$25 million deposit on the site.
The company organised a board meeting discussing the cancellation on Monday at the request of independent non-executive director and pro-establishment lawmaker Abraham Razack.
"The decision came after accessing the short to mid-term impact of the trade war and how the social contradiction would affect the hotel and office market outlook," Razack said on the telephone conference. "We doubt if the company should invest HK$11 billion in Kai Tak where infrastructure has not yet fully developed."
The withdrawal represents the largest strategic U-turn by a major Hong Kong company since US President Donald Trump slapped tariffs on US$200 billion worth of Chinese products and threatened to impose 25 per cent duties on another US$300 billion worth of imports from China this summer.
Razack did not say what the company meant by "social ­contradiction", but the announcement came as Hong Kong lawmakers were preparing to vote on the city's contentious bill allowing ­extradition of criminal suspects to the mainland.
On Sunday, more than 1.03 million Hongkongers, according to the organisers, took to the streets to protest against the bill, while the police estimated the size of the protest at 240,000.
In response to a question on the protest, Razack said the company had "a positive view" of the extradition bill and said the firm was still confident in Hong Kong.
Taking into account the construction and interest expenses, Razack said the total investment in the project would have risen to HK$18 billion, raising investment risk significantly.
The decision to abandon the deal was not unanimous as chairman Pan Sutong and...