PUTRAJAYA: The Chief Justice wants to protect genuine buyers from cartels in court auctions of immovable property and may implement e-bidding to do so.

Tun Arifin Zakaria has asked the Chief Registrar's Office to conduct a study on e-bidding.

Federal Court Chief Registrar Roslan Abu Bakar told The Star that in the present scenario, it was common for a syndicate member to register for the auction of a "hot property" and pay off genuine buyers to withdraw.

This way, there would be fewer bidders to contend with at the auction and if all of them withdrew, the syndicate would get the property at a low price, he said.

"Say the reserve price is RM150,000 and there are bids of RM155,000 and RM157,000 and the property is bought for RM160,000 by a syndicate member,"he said.

"Since it's a hot property, the syndicate member can sell it for between RM200,000 and RM250,000 and keep the profit for himself or share it with other syndicate members."

Roslan said if a syndicate member knew a bidder was desperate to buy an auction property, for example the one next door, he would go to the individual and say, "give me something and I will get the others to withdraw from the auction."

"He will also trick the buyer into thinking he has connections which will enable him to get the property at the auction.

"The money the syndicate member gets from the desperate buyer is then used to pay the registered buyers at the auction to withdraw," he said.

If e-bidding is implemented, there will be greater protection for genuine buyers and less opportunity for syndicates to profit from judicial auctions of titled property.

According to Mohd Hirman Ab Raub, senior assistant registrar (administration and implementation) at the Kuala Lumpur courts, who was roped in for the auction of immovable property, these could be land, residential and commercial real estate valued at between RM7,000 (for dilapidated residential property) and RM10mil.

In addition to protecting buyers, Arifin said he wanted more people to bid for immovable property.

"As long as there is Internet access, buyers can bid from anywhere. It is not necessary to be in court," he said.

He said the idea for e-bidding was also part of introducing innovations to the delivery of justice.

Roslan said a committee had been set up to look into implementing e-bidding.

"Sometimes when a piece of property is to be auctioned off in Kuala Lumpur, an unscrupulous auctioneer would place the advertisement for the auction in the regional edition of a newspaper so that fewer buyers turn up," he said.

The rules stipulate that the auctioneer only needs to advertise the auction.

"If e-bidding is implemented, it can prevent cartels from taking advantage of such loopholes and protect the interest of genuine buyers," he said.

The study would cover the legal implications of implementing e-bidding and other factors, he added.