Singapore Researchers Walk Back Developer Insider Trading Claim

(Bloomberg) -- Researchers from the National University of Singapore Business School, who released a study earlier this month that claimed insider trading among some developers during games of golf led to cheaper land prices, have retracted the assertion.

The study’s authors now say they couldn’t find evidence such activity took place and have removed the term from their paper.

“Research is dynamic in nature. Scientists go through many iterations of the paper in the research process,” said Professor Sumit Agarwal, a real estate and economics academic at NUS and one of the paper’s four authors. “With this study, we thought we could establish insider trading. This turned out not to be the case, and hence the content on insider trading was removed in subsequent versions. The version online has since been updated.”

The study, which tracks golf records from 2010 to 2014, said that senior executives of property developers hit the golf course with increasing frequency after the government announces that it’s selling land. It alleged “informed bidders” paid 14% less for land at auction, costing the government S$147 million ($109 million) a year in lost revenue -- or about 1% of total land-sale proceeds -- and dragging down prices of neighboring properties.

That assertion prompted an outcry from the Real Estate Developers’ Association of Singapore, with its president rejecting the findings and calling them “presumptuous.” The body subsequently issued a more lengthy response, saying it was “appalled” by the assertion and that it takes the allegations seriously.

To contact the reporter on this story: Faris Mokhtar in Singapore at fmokhtar1@bloomberg.net

To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net

©2020 Bloomberg L.P.