The 10-oz. gold bars are hugely popular with Main Street investors, and it is not known how many of the fake gold bars were sold to dealers — or if any fake bars were purchased by the public.

One gold dealer discovered that four of the 3-inch-by-1-inch gold bars he bought — worth about $72,000 retail — were counterfeit.

"It has the entire street on edge," said Ibrahim Fadl, 62, who has been the owner of Express Metal Refining, a Midtown gold-refinery business, for the last 11 years. "I and the others on the street work off of trust; now that trust is strained."

Fadl, a Columbia University graduate with a master’s degree in chemical engineering, and who has more than 40 years in the industry, purchased the four fake bars from a well-known Russian salesman with whom he has done business.

A second 47th Street refiner, who wished to remain anonymous, said he was burned recently when he bought six gold bars that turned out to be mostly tungsten, with just a gold veneer. He would not comment, though, on who sold him the bogus bars.

Fadl became suspicious when he offered the salesman a deep discount for the investment-grade gold bars and he quickly accepted it, a source tells The Post.

Fadl said he did his due diligence "by X-raying the bars to ascertain the purity of the gold and weighing the bars, and the Swiss markings were perfect."

Tungsten is an industrial metal that weighs nearly the same as gold but costs a little over $1 an ounce. Gold closed Friday at $1,774.80 an ounce.

To quell his suspicion, Fadl then drilled into the bar and discovered the tungsten — whose silver color is distinctive from gold’s bright yellow hue.

Raymond Nassim, CEO of Manfra, Tordell & Brookes, the American arm of the Swiss firm that created the original gold bars — with their serial number and purity rating stamped clearly into them — said he reported the situation to the US Secret Service, whose jurisdiction covers the counterfeiting of gold bars.

He said his company "is supporting and cooperating with authorities any way we can."

Nassim thought the culprit must be a professionally trained jeweler to have pulled off the caper.

"The forger had to slice the original bar along the side, hollow out the gold and insert the tungsten ingot, and then reseal and polish the bar, Nassim said.

At an industry dinner Thursday night hosted by Comex, the New York-based metals exchange, the room was abuzz with talk about the bogus gold bars, according to Fadl.

Numerous calls to the Secret Service were not returned.

Ghost inventories are exacerbating the wider ailments of the sector in China, which produces around 45 percent of the world's steel and has over 200 million metric tons (220.5 million tons) of excess production capacity. Steel is another drag on a financial system struggling with bad loans from the property sector and local governments.

"What we have seen so far is just the tip of the iceberg," said a trader from a steel firm in Shanghai who declined to be identified as he was not authorized to speak to the media. "The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry."

VERIFY RECEIPTS

The Shanghai government's asset regulator said that it had sent a note to state-owned firms in August asking them to verify receipts for stored metal on financing deals they had with steel traders.

Police have arrested an employee from Baoyang Warehouse in Shanghai and are investigating documentation for steel stocks that the employee issued to a trading firm, said an official with the surname Ou at Baoyang. Baoyang is owned by China Railway Materials Shanghai Company Limited.

Reuters was unable to contact a member of the police force that could comment on the investigation.

The trade firm used the stocks more than once as collateral to obtain loans, said an executive at Shanghai Minlurin, another trading firm that had steel stocks in the warehouse. The receipts used were for steel worth around 380 million yuan ($59.96 million), the executive said.

Similar cases have prompted some trading houses to temporarily halt transactions related to warehouse receipts, disrupting China's steel business, traders said.

"We have suspended business for days as we are afraid we won't be able to get any stocks from the warehouses if we get a fake receipt," said one Shanghai-based trader.

BANKS BOOST MONITORING

Banks, too, are giving less credit against warehouse receipts.

"Fake warehouse receipts have become a problem for some banks and because of this, many banks have boosted monitoring of existing stocks at warehouses and temporarily stopped accepting steel stocks as collateral for loans," said a Shanghai-based branch manager from a Chinese bank who declined to be identified as he was not authorized to speak to the media.

Steel mills and end users rely heavily on trading firms to keep steel flowing from producers to consumers. Steel traders often buy consignments with full payment, ensuring cash flow to the mills. End users can buy small volumes from the traders, more convenient for them than the big volumes the mills sell.

Industry sources estimated cases that have already come to light account for about 5 billion yuan ($787.50 million) of bad debt in Shanghai, one of China's biggest steel trading centers.

At another warehouse, a logistics unit of giant steelmaker Baosteel rented a small office to a company called Shanghai Yiye Steel Trade Market Management Co Ltd. Documents were forged stating Yiye was the owner of some of the steel stored in the warehouse, said Wang Xueying, the spokeswoman for the unit called Shanghai Baosteel Logistics Co Ltd.

Yiye used the documents in dealings with two companies, China Railway Harbin Logistics and Wuhan Iron Yitong, the spokeswoman said.

The two companies came to the warehouse to collect the stocks only to find that Yiye did not own the materials, she said. The case is still under investigation, she added.

Nobody answered telephone calls to Yiye made by Reuters to request comment for this story. Both China Railway Harbin Logistics and Wuhan Iron Yitong declined to comment when contacted.

($1 = 6.3376 Chinese yuan)

But for a Bishan unit, the COV has hit a record high of S$200,000. The executive maisonette at Bishan Street 13 was sold for S$980,000 including the S$200,000 COV.

Mr Lee Sze Teck, senior manager of training, research and consultancy at Dennis Wee Group, said: "Our agents actually closed a couple of deals in Bishan, one with about S$200,000 COV, the other S$250,000 COV. Both are for executive maisonettes."

Once the sale is completed, the S$250,000 COV will surpass the S$200,000 paid for the Bishan unit at Street 13.

"There is another on-going transaction in Queenstown, where an executive maisonette is transacted at S$1 million and the COV is S$195,000. According to the buyer, he has bought into this unit because of the fengshui and also for the unblocked view from the bedroom," added Mr Lee.

Property agents said those who pay high COVs are typically buyers who are downgrading from private landed properties.

Six-figure COVs are very rare and only for choice units with excellent attributes, they said.

Market watchers said these large price tags are not likely to swing HDB resale prices significantly, because there are not many such cases.

Overall, they said HDB resale prices are inching up because valuation has been climbing. Prices could go up by some 1.5 percent this year, they added.

The COV portion is also likely to trend higher, as more buyers are entering the market, especially for attractive units in mature towns, said property agents.

ERA's key executive officer, Eugene Lim, said: "We do see significant increases. For example, in towns like Bishan, Queenstown, Toa Payoh, you can see COV increase at a median level of between 30 and 40 percent between the second quarter and third quarter. This is more than double of the norm."

For the third quarter, analysts expect a total of 6,800 to 7,000 units of HDB resale flats to be sold - similar to the number of deals done in the second quarter.

Real estate agents advise buyers to be prudent and consider the upside potential of any home purchase as it is a long-term commitment.

Another consideration is the large supply of new HDB flats that will come on-stream in the next few years.

ERA's Mr Lim said: "If you factor in the 3-year construction, 5-year minimum occupation period (before an owner can sell his flat), in about 8 years, you are going to see a lot more flats which will be eligible for resale. So, what impact will that have on resale prices in the years to come?"

Home buyers should also think about whether they will be able to ride out the market cycle if the economy hits a bad patch.

That's among the largest COVs paid since the financial crisis in 2008, said real estate agents.

One of the previous reported highs was about $200,000 for an HUDC flat in Shunfu. It was sold at $1.1 million in July, 2010.

Mr Choo, 46, said he was willing to pay a premium as his new home was renovated just five years ago and came fully-furnished.

The real estate agent had come across the unit, on the eighth storey of Block 146, Tampines Avenue 5, in April.

The 150 sq m flat is two bus stops away from the Tampines MRT station and Tampines Mall.

Mr Choo said it was valued at $640,000.

The median resale price of executive flats in Tampines was $640,000 as of the second quarter of 2012, according to HDB's website.

The father of two said the final amount — $808,080 — was also an auspicious number.

It is the highest price paid for an executive HDB flat in Tampines in the past year, according to HDB's website which shows transacted prices.

Mr Choo is married to another real estate agent, and they have a daughter, nine, and a son, 13.

Mr Choo said his family had previously owned a condominium penthouse in Geylang, which he sold for $1.4 million.

To pay for his new place, Mr Choo has taken out a 24-year loan of $560,000, saying: "You can always earn more money.

"But it's not easy to find a suitable flat which you can call home."

"I searched for a month and looked at six units before I decided on this one."

The block is about 600m away from St Hilda's Secondary which Mr Choo's son attends.

His daughter, Schermaine, attends the nearby St Hilda's Primary School.

She said: "I can walk to school in 10 minutes. There's also a park, shopping mall and playground nearby for me."

Mr Choo's family was also drawn by the extensive renovation to the unit.

He said the previous owner had spent $200,000 and had fittings such as a water feature in the living room, and glass banisters.

And Mr Choo claimed the owners left behind furniture worth $100,000. Some of the furniture they included a custom-made bed, Japanese-style tabletop and a Swarovski crystal chandelier worth $3,000.

They also left electrical appliances like a flat-screen TV, fridge and speakers.

Said Mr Choo: "They were also a Singaporean family who upgraded to a condominium. They initially wanted a COV of $240,000, but I managed to bargain down."

The previous owners could not be contacted as Mr Choo said he does not have their telephone number.

The transaction was approved in May and Mr Choo's family moved in two weeks ago.

He said: "All my friends who have seen my place say it is worth the amount I paid."

Good buy?

Mr Albert Lu, key executive officer of property firm C&H Properties, told TNP: "On the surface, the figure definitely looks like a lot.

"But if what Mr Choo says about the renovation and furnishings is true, it is actually a good buy."

Most flat owners, he said, spend under $100,000 on renovations.

"For someone to spend $200,000, the renovations would have been very 'high-class'."

Mr Mohamed Ismail, chief executive officer of PropNex, agreed.

He said: "In this case, the transaction seems value-for-money, considering the value of the renovation and furnishing the previous owner left behind."

COVs have exceeded $160,000 before, said Mr Ismail. For example, he encountered two such flats — one in Yishun and another in Jurong East — in 1996.

Indeed, it was previously reported that resale prices had hit a high in 1996, with the median COV going as high as $42,000 in the third quarter of 1996.

Since the economy recovered after the 2008 financial crisis, it is possible for some COVs to have returned to such "spikes", Mr Ismail added.

Mr Chris Koh, director of property firm Chris International, said Mr Choo's case is the largest COV transaction he has come across since 2008.

It was previously reported that in 2007, some home-owners were asking for COV sums of more than $150,000 in certain mature estates.

"But if the flat was well-renovated and well-furnished, as claimed by Mr Choo, I can understand why he agreed to pay such a large amount of COV."

Half of all flats sold are renovated, he estimated, but only about 20 per cent have good furniture for buyers to use, he said.

"Most owners tend to bring their furniture along with them when they move out."

Only about 5 per cent of all flats can command such high COVs, he added.

All three did not think this case was reflective of housing prices in general.

Mr Koh said: "This is a resale flat, which is more expensive than a Build-to-Order (BTO) one.

"The BTO flats are still affordable, and there are many schemes to help young couples get these flats quickly."

For example, a four-room flat in Tampines Alcoves and Tampines Green Terrace — BTO projects launched earlier this year — was reported to cost $292,000.

Mr Ismail warned that the transactions like Mr Choo's are "one-off" and are not reflective of general prices.

He said: "It would not make sense to pay such large COVs for flats which do not have comparable furnishings and renovations."

COVs have fallen to an average of $25,000 island-wide, he noted, so buyers should exercise caution before paying large amounts over valuation.

"They should also remember that if the property market corrects itself, like during an economic downturn, whatever COV you pay will mean nothing."

ERA Realty's Cheryl Clare Ng, the agent of the Bishan seller, said 40 people viewed the 25-year-old property in Bishan Street 13 within the first two hours of the open house in June.

Its simple furnishings did not deter the buyers.

Instead, they were won over by how it is a spacious 1,800 sq ft and comes with a rare 150 sq ft open roof terrace.

Other attractions, Ms Ng noted, are its proximity to amenities such as schools.

The Bishan bus and MRT interchange is less than a 10-minute walk away.

"It's also on the 19th floor, has a great view and it is very airy most of the time," she said.

Dennis Wee Group property agent Thomas Hee, who represented the buyers, said such spacious maisonette units with open terrace roofs are hard to come by. There are only 48 such homes islandwide, he said.

In 2005, a unit like this would have cost about $550,000.

"When they are put up for sale, they're always snapped up," said Mr Hee. "In this case, the buyer was able to meet the owner's expectations very quickly."

Yesterday, buyer and seller met at the HDB Hub for staff to vet documents and do eligibility checks.

The process is expected to be finalised within two months, and both parties parted ways with smiles on their faces.

Ms Ng said the buyers got a good deal: "If you compare it to a similar condo unit, you are effectively paying half the price for twice the space."

The $980,000 price equates to about $550 per sq ft.

A similar-sized condominium unit nearby would fetch at least $1,300 psf.

Property analysts, however, were quick to point out that the record-breaking deal is a one-off that is unlikely to drive up resale flat prices or COV quantums.

ERA Realty key executive officer Eugene Lim said he is not surprised that the Bishan unit fetched a high price since such homes are rare and flats in the area usually command a premium.

Most home hunters The Straits Times spoke to, however, baulked at the small fortune paid for the Bishan unit.

Said receptionist Agnes Ho, 34: "It is a very big investment to fork out, particularly if it's in cash."

But some saw it as a sound investment. Civil servant Andrew Wong, 28, said: "Essentially, you are also getting all the conveniences of a good location at a fraction of the price."

"There're parking lots for us, maybe for a while, like... five to 10 minutes. If they rebuild a new post office with a parking space, that would be good for us," said one patron.

"Occasionally I come here, I do not live around this area... (The post office) has been around for a long time and I have over the years been coming here. I would kind of miss it," said another.

One of the more iconic buildings in Chinatown, Pearls Centre, will also be torn down to make way for the new Thomson Line.

Pearls Centre has been around for some 40 years.

The 243 tenants have about two years to move out.

But some of the 44 residents Channel NewsAsia spoke to were surprised at the announcement, as they had recently renovated their units.

The Singapore Land Authority said compensation will be pegged to the market value of the property as determined by professional valuers.

But some tenants are worried the compensation would be lower than what they would get, if the building had gone en-bloc.

Christina Sim, director, Residential, Cushman and Wakefield, said: "Certainly when a development goes en-bloc or collective sale, there is a premium attached to what a property seller would be able to command if it is sold on an individual basis and certainly much so if it is compared to a compulsory acquisition."

Ms Agnes Low, a resident at Pearls Centre, said: "If the government gives us a price that is not acceptable, of course we will not agree to sell off. Of course everybody wants to make money."

Bryan New, a shop tenant at Pearls Centre, said: "It's really not a shock to me because I heard from some of the tenants that the management is trying to do an en-bloc for the whole building, but what I didn't expect is the government (coming) in."

MP for Tanjong Pagar GRC, Indranee Rajah, will meet tenants of Pearls Centre on Saturday to better understand their concerns about having to move out within the next two years.

Ms Indranee said the next two days will give business owners and residents time to digest the news.

Her greatest concern is for those using their units as a home, who now need to find another place.

She said the Singapore Land Authority will do its best to facilitate, but stressed it's not like the Selective En Bloc Redevelopment Scheme, where there is a replacement unit.

"In any land acquisition... your compensation (will be) the market value of the unit. It is not for the replacement unit. So I quite clearly understand how they think and feel about it. So the question is, what is the next best thing that can be obtained for them. Because I fully understand the feelings especially if you've stayed there for many years of your life. It's not just the physical place, it's the whole atmosphere," she said.

It will be 30 kilometres long — 3 kilometres longer than envisaged — and have 22 stations, four more than originally planned.

One of them is Springleaf station, sited in Nee Soon Group Representation Constituency (GRC).

Ms Lee Bee Wah, an MP for the area, said: "(At) Springleaf, most of the residents there are living in private estates, landed properties as well as some condominiums. Currently, the nearest station is Khatib MRT and the complaint is that it is so near and yet so far, because there is no direct bus service. (With the TSL)...we don't need to have direct bus service, there will be a station there."

Another two stations are Woodlands North and Woodlands South in Sembawang GRC.

Ms Ellen Lee, an MP for the area, said: "It (TSL) will facilitate transfer, especially within the estate itself and it will solve the crunch that my residents feel whenever they take the MRT and when they take the buses."

TSL will run from Woodlands in the north to Marina Bay in the south and is expected to be built at an estimated cost of around S$18 billion.

It is expected to have a daily ridership of 400,000 commuters.

Six of the 22 stations will be interchanges, enabling commuters to reach their destinations in the shortest possible time.

For example, a resident of Sin Ming travelling to Republic Polytechnic in Woodlands will halve his or her commute time from 50 minutes to 25 minutes.

Another at Woodlands Regional Centre heading to Marina Barrage will take 55 minutes instead of 70.

With six interchange stations, the TSL will connect to all existing lines and the future Downtown Line (DTL).

"All in, about 160,000 households will be within 10- to 12-minute walk from one of these stations. So you will have an additional option. Instead of having to take a feeder bus or find a way to get to one of the stations on the North-South Line, these 160,000 households can choose to walk to one of the Thomson Line's stations as an alternative," said Mr Lui.

TSL will connect to the North-South Line at Woodlands and Orchard stations.

Caldecott Station will connect to the Circle Line.

Residents of the Bukit Timah stretch can change trains at the future DTL Stevens Station to connect to the TSL.

The Outram Park Station will connect the TSL to the East-West Line and North-East Line, while the Marina Bay Station will connect the TSL to the North-South Line and Circle Line.

TSL will open in three stages from the north to the south.

Phase One, which will have three stations from Woodlands North to Woodlands South, will open in 2019.

Phase Two will be ready in 2020, with stations from Springleaf to Caldecott.

The final stretch of 13 stations from Mount Pleasant to Gardens by the Bay will open in 2021.

When fully operational, an estimated 60,000 households will be within 400 metres of one of the TSL stations.

The line, which will be fully underground, will run on a four-car instead of a three-car system.

Mr Lui said this will give it additional capacity to cope with any increase in long-term demand.

He was speaking during a visit to Telok Ayer Station of Downtown Line One, which will open by the end of next year.

Mr Lui also said: "During the construction phase (of the TSL), there will inevitably be a certain amount of inconvenience, noise pollution. We will try our best to minimise this as much as possible. We will of course want to engage the residents, dialogue with them, find ways to meet as much as possible some of the points that they raise."

LTA, Singapore Land Authority (SLA) and the Urban Redevelopment Authority (URA) said in a joint statement that while all efforts have been made to minimise land acquisition, the government will acquire four full lots.

They include Pearls Centre in Eu Tong Sen Street, a post office along Upper Thomson Road and two landed properties along Stevens Road and Robin Close.

Pearls Centre will be affected by the construction of the TSL as a tunnel will run under part of the building.

To optimise land use around the future TSL station at Outram Park, Pearls Centre will be acquired and integrated with the adjoining state land for a high-density mixed-use development.

Five other part lots will also be acquired but will not affect the main building structure.

Affected parties will be compensated and the amount will run into a few hundred million dollars, said SLA. The money will come from the S$18b budget to built the line.

The SLA gazetted the land affected by acquisition on Wednesday.