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HONG KONG-A late-day legal challenge to the $3-billion IPO by Link REIT–the world’s biggest trust–has left the market in confusion as to whether the IPO will go ahead. A statement by the Hong Kong High Court confirmed that an appeal has been lodged by an elderly tenant against its earlier verdict dismissing a legal challenge to the government’s proposed listing of the REIT. It added that the hearing of her appeal would start on Thursday at 2:30 pm Hong Kong time.

Confusion now surrounds the listing. Link had been due to start trading today but the government postponed this until Monday when the first legal challenge was launched on a technicality. At that time the Housing Authority, which is selling its assets, said the IPO would not go ahead if there was a first-ruling appeal.

The government subsequently offered to pay the legal bills of the tenant for the appeal provided that she promised not to take the dispute to the court of final appeal. The tenant declined the offer and is being sponsored by lawmaker Albert Cheng who has accused the government of selling the commercial property assets too cheaply.

The Housing Authority is expected to make a statement shortly as to how it plans to proceeds. The Securities & Futures Commission, which regulates the Hong Kong Stock Exchange, has given the Authority until Friday to clarify whether it will proceed or not with next Monday’s Link listing.

Link REIT has 180 shopping malls and parking areas run by the Housing Authority, which provides public housing and is the territory’s biggest owner, providing homes for some two million of Hong Kong’s 6.8 million people.

The IPO, the biggest of its kind in the world, has drawn intense interest from small and institutional investors and was 130 times oversubscribed. It has already signed up 10 of the world’s biggest institutional investors and attracted a record $35.9 billion worth of IPO orders from Hong Kong retail investors.

But not only is the future of the REIT hanging in the balance. The Housing Authority and the government have warned that Hong Kong’s reputation as a financial center is at stake. “If for any reason this IPO were to fail, I believe it will cast a very, very heavy burden on the long-term financial health of the Housing Authority, on which three million people depend for their housing needs,” Hong Kong Financial Secretary Henry Tang says in a statement.

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