On Liability for Damage on Consus Tashkent JSK Real Estate Project Financing no. 1

   Hit. 623

The “Consus Tashkent JSK PF Real Estate 1” (“Fund”) is one of the overseas real estate funds which sprung up in the mid 2000’s.

The fund was established in August, 2007 involving in real estate development business in Tashkent, Uzbekistan. According to the related laws and regulations, funds for financing real estate development businesses should establish mortgages on real estate to promote the investment’s stability.

While Uzbekistan, a former communist state, does not allow land ownership making it impossible to establish legal mortgage on real estate, Hana Bank recommended investors to invest in the fund saying mortgages in the amount of 500 billion won was procured in the development site.

Currently, the fund is in a situation where it cannot retrieve most of its investment as the future of this development business became fuzzy. Hannuri Law filed this suit for damages against the sales company, Hana Bank, and the Asset management company, Consus Asset Management Co., Ltd., for the problems in sales in relation with the mortgage establishment and in the operating process. Plaintiffs consist of 17 investors of the fund and the investment amounts to 6.3 billion won. 

This case, a partial win, concluded at the Supreme Court, followed by execution against Hana Bank and Consus Asset Management.