UOB’s award against Lippo Marina Collection increased from $17.7m to $76.1m on appeal

SINGAPORE – UOB has been awarded $76.1 million in claims against Indonesian developer Lippo Marina Collection (LMC) after an appeal.

The sum is more than four times the $17.7 million initially awarded in July 2025 for the bank’s losses incurred from disbursing approximately $182 million in inflated home loans for units at Marina Collection in Sentosa Cove.

On Aug 24, the Appellate Division of the High Court overturned a key part of the earlier calculation of UOB losses, ruling that mortgage repayments and rental income received by the bank should not have been deducted from the amount of the award.

The properties in the case were repossessed by the bank and rented out after the buyers defaulted on their loan payments.

The High Court had in 2022, found LMC, a unit of Lippo Group, liable for conspiring with property agents to mislead the bank into disbursing inflated housing loans to 38 purchasers of units in a condominium it developed.

UOB had sought to recover $92 million in losses.

In assessing UOB’s losses in 2025, the High Court recognised about $53 million in claims. But it substantially reduced the bank’s award after deducting $37.2 million in mortgage repayments and rental income collected from the properties.

On appeal, the court held that the repayments and rental income received by UOB should first be applied to the portion of the loans that the bank would have granted based on the actual purchase prices of the units.

As the repayments and rental income did not exceed the amounts UOB would legitimately have lent, there was no surplus to be deducted from the excess loans.

Justice Woo Bih Li, in delivering the written judgment on Aug 24, noted that UOB would still have granted housing loans based on the actual purchase prices of the units, albeit smaller ones.

This meant repayments and rental income received by UOB should first be used to pay down these legitimate loans, rather than the excess loans resulting from the inflated purchase price.

The final award of $76.1 million comprises the previous award of $17.7 million; the repayments and rental income; and about $22.46 million in interest.

UOB was also awarded $50,000 in costs for the appeal.

The long-running dispute arose from some $182 million in housing loans granted by UOB between December 2011 and July 2013 to purchasers of 38 units at Marina Collection, a luxury waterfront residential enclave developed and sold by LMC.

The 124-unit Marina Collection in Sentosa Cove saw strong sales when it was launched for sale around December 2007. But after a series of property cooling measures introduced by the Government in 2009, sales fell from 30 units sold between December 2007 and June 2008 to just nine units for the whole of 2010.

For subsequent purchases, LMC gave substantial “furniture rebates” of 22 per cent to 34 per cent, which were used to offset the cash payments required for the purchases.

The “furniture rebates”, which reduced the actual prices the purchasers paid for the units, were not disclosed to UOB.

As a result, the stated purchase prices were higher than the amount the buyers actually had to pay, leading the bank to grant larger loans than it otherwise would have. The excess amounts were paid to the buyers, giving each of them a significant cash benefit from the purchases.

At the time, banks were allowed to lend up to 80 per cent of the purchase price of a residential property.

UOB’s loans exceeded the cap based on the inflated purchase prices.

By December 2013, 36 buyers had defaulted on their loans. By April 1, 2015, all 38 buyers had defaulted on their loans.

UOB had sought to recover the outstanding principal amount of the housing loans, the cost of funding those loans, expenses related to investigations into the conspiracy, and costs associated with the repossession of the units.

The appeal also dealt with whether UOB had failed to minimise its losses by holding on to the repossessed units instead of selling them earlier.

The bank was represented by a legal team led by Mr Eddee Ng of Tan Kok Quan Partnership.

Senior Counsel Siraj Omar of Drew & Napier, representing LMC, argued that UOB failed to discharge its obligation to mitigate loss.

The High Court judge noted that UOB had acted unreasonably by not seriously considering selling the repossessed units from September 2017, when the property market was recovering.

It noted that UOB had effectively “sat on its hands” for several years.

However, the appellate court found that LMC had also failed to prove that selling the units earlier would actually have reduced the losses attributable to the excess loans.