PropNex stated Monday that Chairman and CEO Mohamed Ismail told a salesperson development event on 10 January that the commissions related to the more than 86,000 property transactions the company’s salespeople handled in 2021 would exceed S$1 billion.
The company was responding to a query from SGX, which said it received feedback about Ismail’s statement, including screenshots of social media postings related to the sales event; the exchange said that knowing 2021’s commissions exceeded S$1 billion leads to the deduction that revenue for the year would also be more than S$1 billion.
PropNex said that stating commissions exceeded S$1 billion in 2021 was factual.
But it added, “there is a difference in the commission related to the property transactions and the recognition of those commissions as revenue. As not all transactions were completed at the end of the financial period, he had not said that the group’s full year revenue for 2021 was more than S$1 billion.”
The property agency noted that commissions can be estimated on the date the transaction is carried out, but that it is only recognised as revenue when the transaction is completed; if a transaction is aborted, no revenue will be recognised, PropNex noted, adding completions can also be delayed, such as if a buyer needs more time to sell an existing property.
“Consequently, the amount of commission when transactions are carried out within a financial period is
different from the amount of revenue recognised for that period. These terms relative to the completion
of transactions have been used consistently in the announcement of results for each quarter,” PropNex said.
“The company had not made selective disclosure of material information to its salespersons,” PropNex stated.