Midland Holdings charged with fixing commissions
The Competition Commission is taking legal action against Midland Holdings and two of its real estate agencies, accusing them of conspiring with other firms to set minimum commission rates. The regulator alleges that senior staff of Midland's two subsidiaries, Midland Realty and Hong Kong Property Agency, agreed last year with Centaline Group's Centaline Property Agency and Ricacorp Properties for agents to charge at least two percent in commission.  "[This] effectively fixes or restricts the maximum level of rebate their frontline agents could offer to the purchasers of such properties," the commission said on Tuesday.  It said it believes the arrangement amounted to serious anti-competitive conduct in the form of price-fixing. The commission said only Midland Holdings and its firms are being prosecuted because of a policy that encourages offenders to report anti-competitive behaviour in exchange for leniency, adding that Centaline had provided important assistance with the body's investigation. "Definitely, the leniency policy... is a weapon for the commission to tackle cartel conduct," said Lester Lee, the commission's legal services executive director. "Obviously, one of the consequences of someone coming forward applying for leniency is that it will be to the detriment of the other members of the cartel." Lee stressed that Centaline could still face legal claims – from any homebuyers affected by the alleged price-fixing. The commission is asking the Competition Tribunal to declare that Midland Holdings, Midland Realty and Hong Kong Property Agency violated a Competition Ordinance ban on preventing, restricting or distorting competition. It is seeking fines for the three firms and five of their senior members, as well as that the five be disqualified as directors. Responding to the case, Midland Holdings said it will reserve the right to challenge the legal action initiated by the Competition Commission.  The firm said it attaches great importance to the incident, and stressed that it's been in compliance with regulations.  Midland Holdings added that its operations continue as usual and its financial situation remains stable._____________________________
Last updated: 2023-11-14 HKT 21:58 