Comment posted in www.theonlinecitizen.com
Is all Landbanking a scam? Every case in the UK so far has proved to be.
In the UK you can say Land Banking is a scam and the papers often do because there are many thousands of cases of good people losing all their money. There are no audited cases of end plot investors being successful . One of the biggest property booms ever just ended at the end of 2007 in the UK so you would expect that there should have been some plot based land banking success in 2006 and 2007 but there was none.
Many of the Land Banking companies with similar names to those now operating in Singapore offering UK plots have been shut down in the UK by the FSA and are NOT allowed to offer those plots to people living in the UK.
As a Brit let me say this. Imagine I was offered plots on the Padang in Singapore by a UK company that was not allowed by MAS to operate in Singapore. Would you Singaporeans suggest it as a good investment ? It is open land in the middle of the city. Ideal for building on and Singapore is short of building space. Would you expect the Singapore government to protect a stupid foreigner who made that investment ?
Dont invest in what you dont understand.
33 comments:
i do wonder whether they are scams too.
was invited to go for a talk for this company owned by 2 sporean ladies, some international name company..jardin smith or somthing like tt...
they promoted late in durham, UK.
was very tempted to signup but my parents were against it..
so instead i just collected the free shopping vouchers and gifts from Harrods that they gave out to all those ppl who met up w them..
my question is..has anyone else had any involvement w them and if yes, how did it go?
-nurul-
http://luxurycarsrental.blogspot.com/
These fraudsters know how to play on the psyche of Singaporeans. They know that land and landed properties are beyond most Singaporeans to buy or afford here. Hence by telling them that it is good, cheap or has potential in foreign places, many will be sorely tempted. Of course you know what is the outcome.
Remember there was also at one time investment in ostrich farms being promoted here? Or to own beautiful resorts? What else is exotic?
How about land banking in US and Canada? Heard of Walton International?
Yes, Walton Int is in its 29th year in 2008. Their interest lies in Canada and USA. In the last 28 years, they have not lost any of their clients' money. (according to agent of course) With low US$ now, it may be a good time to put some money in here. Cos other than the potential gain in the appreciation of land value, there's also te forex to gain. Of course the opposite is true as well. Decide for yourself.
I know nothing about Canadian or American Landbanking but the fundamental problem with typical UK land banking plots is this. Your primary investment is NOT in land.
The bulk of your investment is in a proposed service. If that service is never delivered or is not successful you are left with a pretty much worthless asset. The time frame for service delivery is always suggested but never contractually defined.
Typically the current real asset value of the land plot you buy is less than 10% of the total land banking investment you make. In some cases the land value is as low as 1% to 2% of the investment.
The 90+% balance goes into the land banking companies pockets. They say they will try to obtain planning permission and suggest that it is highly likely they will get it quickly. The small print always says otherwise.
To the best of my knowledge no company offering UK land plots has obtain planning permission for any offered plots. A large number of the companies have either been closed down by the FSA or run away with the “service fees”. In some cases the land was never even purchased. There have been a few legally enforced refunds but most investors have lost all of their investment.
Plot based land banking is now openly called a scam in the UK by the press and UK government. Here are a few links stating this. Many companies have been shut down by the FSA or have liquidated.
While the FSA has no authority in Singapore the underlying investment is still UK land so you would be wise to at least read what they have to say.
UK Consumer Protection Group
http://www.consumerdirect.gov.uk/watch_out/scams/landbanking/
FSA
http://www.fsa.gov.uk/pages/Library/Communication/Statements/2007/land_banking.shtml
Guardian - Top 10 Scams
http://www.guardian.co.uk/money/2008/aug/23/scamsandfraud.consumeraffairs1
UK Times - 10 worst property investments ever
http://timesbusiness.typepad.com/money_weblog/2008/06/post.html
Observer
http://www.moneyobserver.com/content/sod%E2%80%99s-law-comes-little-too-late
Real people losing money.
http://www.getwokingham.co.uk/news/s/2035797_finch_land_investment_casualties_stack_up
If you bought a UK plot 12 months ago priced in British pounds the small portion of your investment that is in land has declined between 25% and 50% in the last 12 months.
Why ?
The UK Pound declined 25% against the Singapore dollar.
The major builders have written down the value of their Land Banks by between 10% - 30%.
"Persimmon Plc (PSN LN): The U.K.'s biggest homebuilder by market value said it will book 600 million pounds in land writedowns after house prices fell during the U.K.'s worst housing slump in 25 years. The provision represents about 19 percent of the company's land stock value as of the end of June"
"House builders’ landbank write-downs, already standing at a figure £2bn, could jump as high as £13bn if the woes of the housing market are faced head-on, according to City analysts"
Of course these reported declining sites are real commercial Land Banks that have real potential for future development. The market in UK land banking plots seems to be more akin to either highly speculative investment schemes or in worst case pyramid schemes. Land values have little to do with either.
Apparently some people get addicted to being ripped off and there is very little you can do but continue to warn them.
Learn more about "UNTOLD" facts about Land Banking Investment here Land Banking: Secret Recipes to Wealth?
Here is a nice article on a 65M (S$120M) Euros land banking scam from start to finish in Spain.
Does any of this seem familiar to Singaporeans investing in UK Land Banks ?
-------------------
Fortuna Estates, which had changed its name to Fortuna Land (Investment) by 2007, snared its victims with the promise of high returns from land reclassification projects in rural Andalucia. [Spain]
Targeting the ‘ordinary investor’ was a key part of Fortuna’s strategy. It claimed it was making high-return land investments accessible to people who could not otherwise afford them. Many of Fortuna’s victims probably invested the minimum of around 10,000 Euros (S$ 19,000), and the vast majority probably had no experience of land reclassification or the realities of investing in Spanish property.
Fortuna also beguiled it clients by doing all transactions through ‘independent’ lawyers and notaries, and giving clients “legally notarised title deed to the land in which they have invested.”
“ Whether your investment is for 5 acres or just a quarter of an acre, every investment is secured by physical ownership of the title document,” Fortuna assured its investors.
The plans Fortuna had for its land reclassification projects, and the way in which it kept changing them and announcing delays should have had investors’ alarm bells ringing. Plans veered around from hotels with a wedding chapel, to retirement homes, to solar farms. At one point, after long delays, they claimed they had received ‘verbal’ planning permission, but there is no evidence that Fortuna were serious about delivering on their promises.
Despite making several arrests, the Spanish police do not think they have nabbed any of the masterminds, who are thought to have disappeared, and may already be working on their next scam.
Indeed, victims of the Fortuna Estates fraud have already been targeted by new scam that promises to recover their money for a fee of 10% of their investment paid up front.
See http://investmentpropertyrumours.blogspot.com/2008/12/fortuna-land-and-oanna-group-how-it-all.html
for an insight to the previous scams used to raise the finance to run fortuna
Hi, I was invited to a talk in Kuala Lumpur at the Sheraton in Subang Jaya, of course there was the usual coffee and cakes. But the interesting thing was the incite to attend with a promise of a free gold coin. But when you attend there is no mention of the gold coin in any part of the presentation. I am still keeping the sms, which said that I was entitled to the free Gold Coin. But what is interesting is why to they need to go halfway the world to look for about 700 investor. The land I was shown was about 19 acres, which is about 76,874 sq meters. If each plot is 100 sq meters, they just need 768 investiors, wonder why of the 60 million people in UK, they could find about 700 people to part with 10,000 pounds.
Where is the land ? This is modern opium trading. They cant offer these products in the UK so they sell to Asians
yah man don't invest if you're not sure. i think JSI & Walton are pretty good landbanking companies. Was invited to both talks before. But i did not buy any land. Suggest you all to check the company thoroughly before anything. cheers
Alot of good personal opinions here....
Of course it MIGHT sounds like a scam BUT its never a scam unless proven.
1. Guilty unless proven Innocent or
2. Innocent unless proven Guilty?
Which judgement call do we prefered?
Its easy for human beings to make a judgement call using the first mentally.
Praise the Lord.
Not just personal opinions - real facts. There have been no successful conversions of land plots by any UK land banking company since the 2002 UK law change that created this mess. UK citizens lost hundreds of millions of dollars on these scams and were left with worthless plots of land they cant sell. When they finally got wise and called in the authorities the companies moved operations to Asia and Canada.
Turn the other cheek by all means but blind faith in any investment will surely get you bankruptcy.
I m impressed with Mr Tan that so many ppl agreed with him on his opinion :) After doing my homework and reading everything on the net, on a few land banking companies.. (even though my financial planner asked me to think carefully abt it* Probably he knows I have this much $ with me and I m not putting my investment with him) I have finally decided on two land from two different company! Jardin Smith & Edgeworth~ It took me more than a month to set my mind on it becos initially I was only considering Walton since they have good track records! And more negative comments for others. but I realised that piece of land from Walton doesnt look appealing to me. So i went to others to look around. My husband and I decided to diversify our investment so we went into it. I would share that two of them offer different package and assurance, I ve decided to try my luck on both. I would say if u do have extra cash aside, do not do it. God bess all!
Why our government never do anything about landbanking?
Are they not trying to investigate scam and protect people from it?
Wouldn't all these scams tarnish Singapore as a trusted hub?
Anyone knows if our Gahmen is doing anything on this issue?
My wife made me attend one of their presentation since she's interested in the free gifts. :-)
I had fallen prey to several scams before, first on a timeshare tour membership (just a small sum), and the second on some ponzi scheme investment. I vow never to fall prey again. Heh.
Once in Jardin, I was greeted by the usual lavish surroundings and quality food/drinks... and women. Lol! Well, they know I'm the decision maker, and send a sweet young thing to me. Man, she wears this tight blouse, so tight that she strategically place herself on my right (as you guys know, women's blouse opens up from her left). Well... very distracting. I can see her cyan-blue bra, low cut... ahem. Try not to look too much as my wife is there. Anyway, all these just spells so scammish to me. Why send pretty faces if they're doing real investments? I'd prefer to talk to a manager or investment guy who knows his stuff.
So I listened in to her presentation. And I asked several difficult questions. 1) When did their company start up? 2005! And first business don't come in till 2006. 2) So it had been 4 yrs, any success stories? Not at the moment. 3) Can you tell how well those investors in 2006 are doing today? Can't tell 4) You mentioned I can get 350% returns in 5-7 yrs, based on what do you claim that? Based on the prices in nearby lands today. 5) Where's the plot of land sold in 2006? She showed me some land. 6) I asked don't you know the prices surrounding this plot of land sold in 2006? Yes, we have. 7) Then wouldn't you be able to answer my question on how well investors in 2006 are doing today? Er... my manager will have the answer to that. 8) Still a 350% returns, discounting the initial capital, that's 250% over max 7 yrs, which is ~80%pa returns. That's very high for any investment if you ask me. Yes, it is. 9) Sorry, it feels scammish to me.
I didn't invest. Didn't provide any referrels too. Unless I want to lose some friends. Heh.
Nice Blog!
UK land investment
Hi Last week I went attended a preview by Jardin Smith in The Prince Hotel, Malaysia (A Singpore company) on UK plot land investment. The convincing part is you can go online to check at UK Land Registry website whether your name was registered. And Jardin Smith said so long as 60% consensus (25% from jardin Smith), the land will easily sell and you have two chances to do this before it reach 25th years where the said land will be sell compulsorily. Another thing they previewed was that the land are located 10~15km from the atrategic area like 2012 sea game stadium, train, hospital and airport. The land now is an agriculture land, thus upon convertion, the land will appreciate at least 7% and even 20%. Does any one can shared with me on this fact? Is it a scam since you will have title deed?
I just went to a property investment seminar organized by Jardine Smith International on October 2010. They're trying to promote a plot-based investment in a piece of land in Gerrards Cross in a way exactly like many of other foreign landbank investment companies had done in Singapore and Malaysia previously.
Everything looks perfect with big fat buffet and professional ladies walking around sexily presenting their talks. I wonder if these so called professional people coming there to sell they body or their professional investment services?
Anyway, they'd yet to convince me that they'd any "proven" track record of investing for clients particularly since the UK property market had dropped >20% lately.......
When the economies are good, everything turns good. A bad investment with high risk and low return probabilities under this scenario can also fetch decent real returns to its investors.
But what if the economies turn pale or not go as good as one expects? Under this circumstance, an established capital guaranteed fund or a state-government backed investment can even even go bankrupt and leaving lots of its investors in tragic miseries.
My point is regardless of how good and established any prospective investment is,if we cannot control or unable to oversee the investment progress it may present us a considerable risk (particularly time risk as a proxy of the size of our investment) as the time frame lengthens.
In the case of a land bank investment particularly in a foreign country with which we are not familiar, we are quite afraid if it could fetch us a handsome return as claimed by the sales agents previously. Since we are not insider and have no knowledge access to the management of the land bank investment company, it puts in profound doubts if anything goes wrong with our investment there. What if there's a change in the board of management? Can you trust this new management as much as you trust the previous one? What about if there is a change in a government and hence a geopolitical policy in the country in which we invest? eg. How is the said property company going to solve our dilemmas if a policy is implemented that prohibits foreign company investment in green-belt areas in UK?
UK freedom of information request containing local authority response on Jardin Smith Gerrards Cross site.
http://www.whatdotheyknow.com/request/status_of_land_in_gerrards_cross
In summary
1: the land is protected green belt land
2: the council has enough land to meet it's building needs for at least the next 15 years without considering any protected or green belt land
3: the council warns people about buy green belt land as an investment. It almost certainly is not.
This movement results to a complicated inflation in the country. Regarding to this, one of the most secure form of cash to numerous today is gold. And with the gold price is on the rise. Beware though, like any other event in our economy, con artists cannot wait to take advantage of the unsuspecting and trusting resident. Gold buyer scams are on the rise everywhere. Many of the ads on television proclaiming they provide you with the most for gold, actually give you significantly under local pawn shops or gold buyers. They are not idiotic, whenever you send them your gold you also sign a form that you agree to take whatever amount they give you. So be mindful when selling your gold right now.
Wah lau eh…………yet another land product release by Walton again. I have been trying to resell my unit since 6 months ago, till now there is no answer from the company. I was so upset, instead of helping me to sell off the land, they now telling me that I got to pay a huge fees and high commission to them for the process.
I like to share this latest piece of shit land from Walton – Sherwood North for 55K per acre.
The sales rep was going on about how this investment will help me to yield at least 24% per year again and I don’t believe them anymore. He even quote that “**For those who are not familiar with our track record, PriceWaterhouseCoopers has audited our average ROI at 28.24% per annum as advertise in Straits Times 14th November 2010. I can’t understand why this advertisement is being approved? In the ads it mentioned that 28.24% per year for all clients, till now I don’t even receive 5 cents from them. I also want to send this to CASE for their ads is misleading.
He thought I “siao” one, I went on to do due diligence and find the publicize article on 27th October 2010, please follow the link:
http://fredericksburg.com/News/FLS/2010/102010/10272010/584428
What anger me is that the link itself states all the facts against their rubbish:
1.It states clearly that the cost of the land that they purchase: 3.55million for 355 acres works out to be 10K per acre and yet they are selling me about 55K;
2.The company takes five to 10 years to decide what type of development to do and then develops it over a 20-year timeframe, in total will be 30 years to see the compete project if nothing happen in between. Also as stated in their brochures and yet trying smoke me of the exit within 4 years, how is this possible?;
3.Also, I want to know since they claimed that PWC audited their ROI at 28.24%, I want to ask, why the heck my returns for all the projects that I have is. I have received nothing, NOTHING! Of 28.24% per annum!
Even MAS has released an article:
http://www.moneysense.gov.sg/publications/quick_tips/Consumer_Portal_Land_Banking.html
on their website to take precaution of these blood suckers!
What a joke!
A post from Wendy Kweks blog showing the inside of a land banking scams. I think the 15 years is highly optimistic. My advice would be if you can get your capital back without interest take it. Sooner or later all of these companies fail.
http://wendykwek.com/71/
Also see this recent article from the uk.
http://www.thisismoney.co.uk/investing/article.html?in_article_id=526085&in_page_id=166
Millions Lost As Land Cheats Prosper.
Mr Xiao, I am an investor with Walton too. My consultant already told me upfront that: -
1) There is no guarantee in terms of the time, but if it is anticipated to hold say like my project 4-6 years, then it is most probably in that time frame. But if it is late, it will be compensated with another year of interest.
2) Even when they said every year 28%, my consultant stated clearly that I only get my money in total lumpsum when the project is sold to developer. That is why there is compounded interest on top of the yearly return.
3) They also stated that there is an option to opt out early by putting in the 2nd hand board but not recommended because u might not get any returns, just your capital. And hv to pay for your own legal & stamp duty. Mr Xiao, u didnt follow the program fully, ofcos u lose money. Same with insurance savings, they said you hv to continue saving for 10 years, if not, u dun get return and have penalty. All investments with compounded interest is the same. U opted out early, its your fault u didnt get return.
4) Many of my friends who intoduced me to Walton aready got their returns and they are superbly happy about it. I guess its just those that opted out early didnt experience the same.
5) I guess u should do proper research and really understand it completely before investing.
6) I'm a happy investor and my retirement funds are very diversified and mostly are safe with Walton.
Thank you.
Serene,
You claimed that your friends are 'superbly happy' when they got their returns.
Can you provide specifically which project they are in? Which year they invested, how much they invested and how much did they get back when they exited and which year they exited. That is exactly what Mr Tan KL of NTUC asked for.
Better still, provide anecdotal evidence showing these figures. It is easy to say such and such but unless we have the details, how are we to be convinced.
Sometimes, people become their free advertising agents when they themselves are being conned and yet still do not know.
I may be wrong but if you can provide further details, we can give credit where credit is due.
I have even heard how some companies deliberately pay back some investments just to make people believe them and then reinvest and even introduce more people to be conned by them!
Hi Serene,
I would very much liek to hear from your friends who have made a profit from Walton.
Please advise.
Thank you.
I attended a presentation in Jardin Smith early this year and ended buying a plot of land nearby to London only to come back to make a cancellation but to our surprise the Senior Manager who is a Malay lady, she look more like a mix suddenly became erratic and have to use the word 'fuck' in her words a few times . Not to scold us but it still gave me and my wife an unpleasant surprise.
I wanted to lodge a complaint to the company but I changed my mind when Client Manager whom done the presentation to us before we signed up apologies and asked us not to do so and gave her a chance since she was just promoted.
I feel that many of those who bought from them are based on their greed and not following or did a complete research on their own about the actual situation in UK where land are almost impossible to get a housing status for land under such schemes offered by a land company.
I also found out that this industry of landbanking mostly was started by people from timesharing or people who come from other landbanking companies like UKLI,Profitable Plots which has been closed down because of scam cases. Stay away especially timeshare people because they have a highly charming personalities and good in scamming people everywhere.
Does anyone have info about another company that I came across recently which is A2A which they are selling landbanking in Canada? I think Canada should be a much better location but having a very cautious mind is important.
Jardin Smith has been closed down by the Brunei authorities
http://m.bt.com.bn/business-national/2012/06/14/ambd-orders-jardin-smith-international-shut-down
it seems like JS have been inactive in Malaysia for 1-2 years. no news at all including recruitment. hope more people can come out to provide more info so people can make better decision.
There seem to be two kinds of land banking companies. Those that have failed after 1-5 years. And those that have been shut down as scams.
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