Property agency co-owner fined $50,000 for building hidden floor

For about 10 years, the co-owner of a property agency had the use of 5,381 sq ft of extra space that was built without approval of the authorities.

The illicit mezzanine floor, which was built within the eight-floor unit at The Alexcier building in Alexandra Road, was used as a working office and storage area for items such as document files, IT equipment and handyman goods.

When Yeo Choon Guan, also known as Stanley Yeo, realised the extra floor had been built without approval, he erected a display shelf door to hide the staircase to the mezzanine floor.

It was still accessible via the concealed entrance to the staircase behind the display shelf door, and was subsequently used as an interior design showroom and resting area for staff. 

On Tuesday, Yeo, 51, was fined $50,000. He had pleaded guilty to a charge of authorising the construction of a mezzanine floor within unit 08-01 at The Alexcier building – an eight-storey light industrial building – despite the plans not being approved by the Commissioner of Building Control under Section 5 of the Building Control Act.

Yeo was also convicted of permitting the erection of the illegal floor without the Commissioner of Civil Defence’s approval of the plan for fire safety works. Two more charges were taken into consideration during sentencing.

Under the Building Control Act, anyone convicted of carrying out unauthorised building work is liable to a fine of up to $200,000, a jail term of up to two years, or both.

The hidden floor, built between 2008 and 2009, was the first known case of its kind that came to light when the authorities acted on a tip-off and conducted an inspection of the building in February 2019.

From 2008 to 2009, Yeo was a director and shareholder of SLP International Property Consultants, ZACD Investments and ZACD Posh, which were in the real estate development and sales business.

The unit at The Alexcier was owned by Yeo and his wife Kain Sim under ZACD Investments – a real estate investment firm they co-founded under the ZACD Group.

The couple are controlling shareholders of ZACD Group, which has been listed on the Growth Enterprise Market, Hong Kong’s exchange for smaller companies, since 2018.

In early 2008, Yeo thought of optimising the space at The Alexcier for his business as the unit had a high ceiling that was not being utilised, according to the statement of facts heard on Tuesday.

He then used SLP International as the corporate entity to coordinate the works at the premises.

Furnisteel Systems was engaged to construct the illegal floor, and work began around March 2008.

During the construction process, Yeo and his wife attended several meetings with Mr Steve Seet Kwang Meng, a sales manager at interior design and renovation firm Communication Design International, which was providing interior design and project management services for works at his premises, including the construction of the mezzanine floor.

But the couple had failed to confirm what or if any necessary approvals from the authorities had been obtained for the works, noted the court papers.

The unauthorised floor was completed in the first quarter of 2009 and spanned 5,381 sq ft, about the size of eight three-room HDB flats.

The Straits Times reported in March 2019 that various living and work spaces with workstations, beds, a kitchen and a meeting room were found on the illegal ninth floor.

 

At the time, the unit was on a three-year lease to property and asset management company ZACD Posh for a monthly rent of $16,200, as stated in the ZACD Group prospectus.

Property experts had said the illegal floor meant the owners had avoided a development charge of over $1 million payable to the Urban Redevelopment Authority (URA), based on the 2019 rate, if the additional level had been approved.

The floor was demolished by April 2019 following an order from the Building and Construction Authority.

The unit was put up for sale later that year. A URA caveat showed the 10,505 sq ft property was sold for $2.8 million in June 2022.

 

Yeo’s lawyer, Mr S. Balamurugan of K&L Gates Straits Law, said in mitigation that Yeo is deeply apologetic and remorseful, and understands the gravity of his mistakes in not obtaining the relevant approvals.

However, the mezzanine floor was created as a storage area and a working office, and not used for the purpose of increasing occupancy or for rental profits, he added.

Mr Balamurugan also said in court that the mezzanine floor had not posed any immediate structural hazard to the rest of the building or compromised the safety of the public.

Yeo, who was awarded the Public Service Medal in 2015 and had chaired the Tampines North Citizens’ Consultative Committee, has taken leave from his grassroots position since 2019.

A People‘s Association spokesman told ST that Yeo ceased to be a grassroots leader in September 2022.