Koramco REITs Management & Trust announced on August 12 that it has issued an official warning regarding the illegality of the 'The Time Haeundae Officetel' currently being sold by Ninetale in Haeundae-gu, Busan, and urged investors to exercise caution.
The Time Haeundae project began in 2023 when Koramco and Ninetale signed a completion-guaranteed management land trust contract. The project involves converting an existing hotel into an officetel, with Koramco fulfilling its responsibility for completion and the construction now finished.
The trustor, Ninetale, began selling units without consultation or consent from the trustee, Koramco, or the lending syndicate. It has been reported that rental and sales payments are to be deposited into accounts under the trustor's name.
To protect buyers and prevent potential damage in advance, Koramco has taken proactive measures. Last month, the company sent an official notice to Ninetale and the trustor's legal counsel, clearly stating the illegality of the sales activities. Koramco also demanded a halt to the opening of accounts intended to receive sales payments. Additionally, Koramco has posted a popup notice on its website to minimize potential harm to general buyers of the project.
According to the trust agreement, Koramco explained that leasing or selling the asset cannot proceed without the consent of the lending syndicate, which is the primary beneficiary. For buyers to receive legal protection, all payments must be deposited into an account under the trust company's name.
In previous cases of similar illegal sales, buyers lost their entire deposits and became embroiled in legal disputes.
A Koramco REITs Management & Trust official stated, "Although Koramco was responsible for the project through completion, the current sales and leasing activities are being conducted without any consultation with either the lenders or the trust company."
He added, "This is a highly risky situation in which buyers cannot receive legal protection, so extra caution is needed to prevent harm to well-intentioned individuals."
He further stated, "Koramco is taking proactive measures to fulfill its legal and ethical responsibilities as a trust company," and added, "We will continue to monitor the situation and cooperate with relevant authorities to prevent similar incidents in the future."
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