A Subang Jaya consumers' group has urged the Bar Council and Bank Negara to investigate several banks and solicitors involved with a stalled development project in USJ.

In a joint memorandum, the president of the Consumers Association of Subang and Shah Alam (Cassa) Jacob George said purchasers of apartments in the USJ 19 Rhythm Avenue project have alleged "professional misconduct" and "conflict of interest" in the loan facilitation, attestation and drafting of various agreements.

"There are allegations that in this mixed development project, several solicitors acted for both purchasers and the developer, thus violating Section 84 of the Legal Profession Act 1976," said George in the memorandum delivered on Monday to both parties.

The said section states that an advocate or solicitor acting for a housing developer is not to act in the same transaction for the purchaser of the property.

"There are also allegations that end-financing banks failed in their 'duty of care' to protect purchasers' interest, by releasing loans to the developer prematurely and without consulting with the borrower/purchaser," George added.

According to him, the purchasers have alleged that although 95 percent of the payments have been released by the banks, the project has been stalled for the last 10 months and is only at 65 percent completion stage.

"In view of this, the majority of Rhythm Avenue apartment buyers have lost confidence in the present banking system which does not have 'checks and balances' to protect borrowers' interest," he said.

Police report

The Rhythm Avenue project is a mixed development by Sanjung Utama Sdn Bhd. The project raised the concern of several buyers when they were not given vacant possession of the properties this January, as stipulated on their sale and purchase agreements.

George also appealed to Bank Negara to advise banks lending to these purchasers to "stop harassing" the latter for their loan installments in view of the situation.

Meanwhile, the consumer rights activist said Cassa had lodged a police report at the Selangor police headquarters to determine the various allegations of the purchasers.

When contacted, a Sanjung Utama representative said the company's spokesperson was unavailable for comment.