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Inquiry Hearing Cases--A Selection II (Excerpts)

Issuing misleading information in the press release

A branch manager who provided unverified information on the sale of 5 Home Ownership flats to his estate agency company for the latter's issue of a press release, which turned out to contain false and misleading information, was suspended from estate agency practice by the Disciplinary Committee for 2 months.

The Disciplinary Committee also reprimanded and imposed a fine of $200,000 on his company for causing or permitting the issue of such press release.

The case started with the branch manager claiming to receive an enquiry from an anonymous mainlander who showed interest in the purchase of several Home Ownership flats for rental income purposes. According to the branch manager, the mainlander did not inspect the flats but indicated that he might instruct his relatives to complete the purchases. The branch manager later found that there were 5 completed transactions in Home Ownership flats. Before he verified the identities of the purchasers, he just presumed the purchases were made by the purchasers on behalf of that mainlander and provided the information to the marketing division of his company.

Upon receipt of the said unverified information, the estate agency company issued a press release on it to the media. A list showing the descriptions of the 5 Home Ownership flats, the sizes and the prices was also included in the press release. The information was widely reported in the press.

Subsequently, it was suspected that the contents of the press release might be false or misleading. The Estate Agents Authority therefore initiated investigation.

In the course of investigation, the branch manager admitted that he did not verify the identities of the purchasers before providing the information to the marketing division of his company. He deeply regretted the misunderstanding and inconvenience that might have caused to the readers of the press release. The company pleaded that it did not intend to issue false or misleading information in the press release. It undertook to review its internal procedures on release of information.

The Disciplinary Committee, having heard the evidence from all parties and the admissions of facts and liabilities of the branch manager and the estate agency company, ruled that the company had committed a breach of section 9(1) of the Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation by causing or permitting the issuance of an advertisement wholly or partly relating to its estate agency business which included statement or particular that was false or misleading in a material particular. The Disciplinary Committee imposed an order of reprimand and a fine of $200,000 on the company.

The Disciplinary Committee also decided that it was an irresponsible act for the branch manager to provide unverified information to the marketing division of his company. Such act would bring disrepute to the trade. The Disciplinary Committee ordered a temporary suspension of his licence for 2 months.


Section 9(1) of the Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation
A Licensed Estate Agent shall not cause or permit to be issued an advertisement wholly or partly relating to his estate agency business which includes any statement or particular that is false or misleading in a material particular.

Paragraph 3.7.2 of the Code of Ethics
Estate agents and salespersons should avoid any practice which may bring discredit and/or disrepute to the estate agency trade.

 

 

 
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