A report by alternative news media website Gutzy on July 24 and an AP News story on July 16 alleged that Oxley Holdings 5UX chairman Ching Chiat Kwong had paid EUR73,000 ($106,184 in today’s prices) into the accounts of councillor Renato Boraso to purchase Palazzo Papadopoli, a municipal property in Venice, Italy.
According to Italian media, Boraso is now in jail. After The Edge Singapore reached out to Ching to check the veracity of these reports, Oxley issued a clarification on July 24 and 25 via SGXnet explaining what transpired in Italy.
Based on court documents, announcements by Oxley on SGXnet, and the Italian press, the furore surrounding corruption allegations against Venetian politicians have sucked in Ching and his property manager in Italy, Luis Lotti.
In replies to the Singapore Exchange S68 (SGX), a July 29 Oxley Holdings announcement says that based on the case files of the ongoing investigation in Venice reviewed by Ching’s lawyer, the investigation by the Venice public prosecutor’s office started in November 2021 after a complaint filed by Claudio Vanin. Vanin was the contractor for two of Ching’s Italian properties but was subsequently dismissed by Ching.
“Mr Ching’s lawyer has advised that according to the Italian Code of Criminal Procedure, investigations are carried out in secret, which means that the person under investigation does not have the right to know immediately about the investigation. Mr Ching had not received any information, whether official or informal, about the existence of the investigation by the public prosecutor’s office at the court of Venice,” the Oxley announcement on July 29 states.
Similarly, Ching told The Edge Singapore that, as of July 29, the Venetian police and the court had not contacted him.
The source of the Gutzy and AP News reports is the Italian news agency Ansa. According to AP News, Luigi Brugnaro, the mayor of Venice, “is under investigation in a corruption scandal that has landed his top public works official in jail for an alleged system of kickbacks in return for granting favours to developers, Italian media reported on July 16,” AP News says.
AP News quotes Ansa, which reported that “Mayor Brugnaro along with two aides are under investigation for allegedly agreeing to ensure approvals for a 348,000 sq m (3.7 million sq ft) residential and commercial project by a Singapore developer in exchange for EUR150 million”. This property is known as Pili Land.
These reports referred to two different properties. The Gutzy report refers to Palazzo Papadopoli, while AP News refers to a 358,000 sq m site, Pili Land. Halfway through the Gutzy report, a reference is made to the Pili Land deal. There is also a reference to Lotti concerning a payment made to a city councillor. Ching says Lotti had nothing to do with any payments to the councillor mentioned in the article.
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Palazzo Papadopoli is owned by Ching in his personal capacity. According to AP News, Palazzo Papadopoli should have been sold for EUR14 million but Ching bought it through an auction.
Ching says: “I bought Palazzo Papadopoli in a public tender where I bid EUR10.8 million for the property. The price wasn’t exactly cheap as I was the only bidder. I wondered if I should have bid a lower price. This property was a police station, which I think I could develop into a six-star hotel. There are two gardens in front of the building and the architect told me we could use them for al-fresco dining. And I like the building.”
During the pandemic, all work was stopped and the Venetian authorities requested for the building to be used as a vaccination centre. “The building was released to me after the pandemic. The news report said my manager paid EUR73,000 and I was also involved in getting a lower price, But there was only one tenderer, me. This case has nothing to do with me,” Ching continues.
Although the renovation of Palazzo Papadopoli is likely to be expensive, Ching reckons it is worth the expense. “You can’t build a new building. I believe that Venice is unique. It is a water city and tourists will come,” he says.
Pili Land non-deal
Separately, Ching is also connected to a second property in Venice, the 368,000 sq m waterfront property known as Pili Land, in which he does not have a stake but is now the focus of an investigation.
According to Ansa, development was slated for this piece of land that Mayor Brugnaro had bought for EUR5 million at a public auction before he was mayor and was placed under a blind trust when he took office. The value of the land on the mainland facing the Venetian lagoon rose after it was slated for a public project during his tenure, the report says.
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In a July 28 report by L’Unione Sarda, the Italian regional daily newspaper for the island of Sardinia, the blind trust that was supposed to prevent Brugnaro from interfering in the management of the land “does not hold up, according to prosecutors”.
“The blind fund, created in 2017, is ineffective because it is clear that Brugnaro has not divested his participation in the companies,” says L’Unione Sarda.
According to L’Unione Sarda, 32 people are under investigation. These include Venice’s mobility councillor Renato Boraso. The report says, “The prosecutor's office is investigating all the other 28 entrepreneurs for the 11 alleged corrupt acts linked to Boraso and Brugnaro and on a series of false invoices to cover bribes to politicians by 14 companies.” Notably, Ching is not one of these 28 entrepreneurs.
L'Unione Sarda says another separate corruption case, linked to the negotiations for the sale of the Pili Land and Palazzo Papadopoli, was also opened against the primary accuser, Claudio Vanin. “Included in the investigation register are Ching and Lotti,“ L’Unione Sarda adds.
In an Oxley announcement on July 25, the company says Ching had considered the possibility of the group developing Pili Land into a waterfront township, similar to Oxley’s Royal Wharf project in the UK. A preliminary feasibility study had been carried out. However, based on the study's results, a development project would not be commercially viable as costs would be too high. In the statement, Oxley says no further steps were taken concerning Pili Land, and no discussions on the purchase price or other details had occurred.
“I went to Venice and they showed me a few projects. One was Pili Land, a seafront property linked by a bridge to Venice. I did a feasibility study because there will be remediation land costs. I called DP Architects to ask their associate to do a feasibility study. The cost was very high. The Venetian authorities didn’t tell me what the land cost was,” Ching says.
As reported by Italian media, the real issues for Pili Land are Mayor Brugnaro’s low acquisition cost, the controversial blind trust, and the land's expensive development potential. The Pili area incorporates “41ha of polluted lagoon, purchased for EUR5 million,” L’Unione Sarda says. Making it profitable was Brugnaro’s constant worry. Even when the deal fell through, the interest in the profitable use of the Pili Land never ceased,” the newspaper adds.
Italian media have also pointed out that Venice prosecutors are indicating that the Palazzo Papadopoli sale dates back to 2016 and "the passage of more than six years from the events makes the precautionary requirements obsolete".
Investing in Italy
After the feasibility study on Pili Land, Ching switched his attention to another public tender, Palazzo Dona, which he acquired for EUR7.1 million in his personal capacity. According to an affidavit filed by Ching at the Public Prosecution Office of Florence, Ching bought Palazzo Dona in a public auction.
However, Vanin was Ching’s contractor for two Italian properties. One of them was Fonti Toscana Country Resort in Tuscany. Fonti is a vineyard where villas are rented out to holidaymakers.
According to Ching, Vanin and his company, Sama Global, were tasked with renovating Fonti and Palazzo Dona.
“I gave Vanin two contracts. One was to renovate the villas at Fonti. He sold away all the 600-year-old roof tiles at Fonti as antiques and replaced them with new tiles,” Ching says.
“For the renovation at Palazzo Dona, I discovered he made a claim forging the architect’s name,” Ching says. His affidavit says that Vanin’s company used stoneware instead of marble while undertaking asset enhancement initiatives (AEI) and renovations to Palazzo Dona. From then on, relations between Ching’s private companies and Vanin were managed through lawyers.
“I terminated Vanin and paid him for the hotel in Venice. I lodged a complaint against him and am waiting for the court to decide what I should pay him because he took my tiles at the Tuscany villas,” Ching says.
When asked about the controversy surrounding Pili Land, Ching says: “This allegation is not new. The first allegation Vanin made last year was that my manager Luis had paid EUR73,000 to the councillor and that Luis made a police report against Vanin. In 2020, Vanin sent some material with information to Business Times, but I told the reporter that I didn’t owe Vanin money.”
Vanin sued Ching for EUR6 million for renovation work on Fonti and was awarded EUR620,000 by the judge. Vanin appealed. A surveyor was brought in to verify the amount and Vanin lost the appeal. Vanin also sued Ching’s private company for claims for work done on designs for the Pili Land of up to EUR2.8 million but lost the case.
According to a statement by Ching’s lawyer, Vanin brought two civil suits against Ching’s private company to obtain payment for consulting work for the Pili Land that Ching never commissioned. He also sued the same private company for bankruptcy. Both cases were dismissed on the basis of a lack of evidence.
On his part, Ching reiterates he didn’t bid for Pili Land and is keen to have his 600-year-old roof tiles back.
