Tan Kin Lian's Blog: Civil or criminal case?

Friday, September 18, 2009

Civil or criminal case?

If a land banking company has cheated the investors, is it a civil case or a criminal case? Does the Government (i.e. the Commercial Affairs Department or the Monetary Authority of Singapore) have the duty to investigate an allegation of cheating made by many investors? Can they sit idle and let other investors be cheated?

What is cheating? Cheating is described in the Penal Code of Singapore as follows:

Cheating – Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he or she would not do or omit if he or she were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat". For example, A cheats if he intentionally deceives Z into a belief that A means to repay any money that Z may lend to him when A does not intend to repay it, and thereby dishonestly induces Z to lend him money.

It is the duty of the Government to enforce the law. If there is a complaint by the public that the land banking company is cheating them, the Government must at least carry out an investigation to see if cheating was involved. If there are grounds to believe that there was cheating, they should bring the case to court with the evidence (obtained through the investigation) and let the court decide.

If many members of the public lodge a similar complaint, the need to investigate is strengthened. Clearly, it is no longer a civil dispute. There is prima facie evidence of cheating.

For example, the investigation will show if the money received has been properly used for investing in the land that was intended. Has any money been mis-appropriated for other purposes? If the investment went bad, was there any money left that could be repaid to the investor?

The investors do not have the power or resources to carry out such investigation. Their lawyer (which has to be appointed at great expenses) do not have these investigative powers.

Even the act of investigation will deter the land banking company from continuing its dubious operations and put them in proper order.

If the investigation shows that there was no attempt to cheat, then the CAD can tell the investors to bring a civil case in court. But, I repeat, it is the duty for CAD to investigate the allegation.

Tan Kin Lian

11 comments:

A Tan said...: "If many members of the public lodge a similar complaint, the need to investigate is strengthened."

True

But will people lodge complaint? Remember credit notes -- over 10,000 bought, only 5,000 complained. And only 200 turned up at HLG in Aug.

Complain to MP, police.

You all complaining to TKL because you know that there are no consequences if yr complaint is false? Also because you can complain anon?

Or you dare not complain to MP or police because you know if you are honest and not greedy, wyou cannot be swindled?

A story from an ex-top Reuters man taken from his blog www.littlespeck.com illustrates this point

"I had long wondered ... what ingredients were needed to pull off a successful scam.

When I was a news editor in Hong Kong, I put this question to a retired head of a cheating syndicate called Tin Sin Kuk, which had existed among the Chinese for ages.

The ring consisted of five or six men and women, who would select a victim – always a rich person – to take part in “swindling” another person, who was actually a gang member.

Needless to say, the rich person himself was the target.

Sitting in my Causeway Bay flat, the old man said: “For the cheating to succeed, the victim must have greed in his heart, the greater the better,” he said.

“If he’s honest and not greedy, we cannot swindle him.”"; September 18, 2009 6:46 AM
Tan Kin Lian said...: To A Tan,
I was told that many investors went to see CAD. They were advised by CAD officers to go and find a lawyer. So, they might not have lodged a formal complaint.

Singaporeans are naive, not aware about their legal rights. I have asked them to group together and see a member of parliament - any MP of an affected investor.

I will also ask them to see FISCA and get FISCA to help them to write the complaint to CAD. We will get many formal complaints lodged with CAD.; September 18, 2009 6:57 AM
Anonymous said...: If I were one of the victims, I would not hesitate to write to WKS to let him know the type of people he has under his ministry - get high salary, but push the buck!; September 18, 2009 9:43 AM
Sad but Safe said...: Investors who have pumped in $, to what end will suing the company lead to?

(i) Now that there is widespread awareness that the company will not pay, legions of investors will swarm asking their money back. Given that you win the suit as a class action, how many cents do you think you can recover? You are not alone. There are legions of fools in HK, Brunei, Canada etc where they operate in demanding the return of $. Where do you think you rank?

(ii) Given that you pay lawyers and win the case, you have to take further actions to see to the recovery of your money. How much more good money do you want to spend chasing bad money? I supposed you will be satisfied taking the computers and furniture in their office as payments?

(iii) The company has spent a lot of cash for exhibition spaces and publicity over the past few years. There are no real returns, other than from incoming investors, how much do you think they have left that you can take back?

(iv) Their contract says disputes are to be settled by arbitration first. I understand that arbitration costs at least 5k.

I'm one of the fools who pumped in, but sensed the problem early and managed to pull out. The pulling out process was hell. They are not afraid of CAD,MAS. They were afraid of the press then! This weapon is now blunt since their scam is now in the public domain. Threats of going public won't work anymore.

The best way forward is let them live, so that they some of the projects can see success and you can get back money over the long run. Take your 12.5 if they offer you & wait out. The time to call for blood is over. You should have done it much earlier (before the whole world is doing it)

CAD & MAS are toothless tigers. We can let their bosses know how useless they are in the next election.; September 18, 2009 12:07 PM
Anonymous said...: To A Tan of 6:46AM
"Or you dare not complain to MP or police because you know if you are honest and not greedy, wyou cannot be swindled?"

Are you suggesting that those minibond holders are dishonest and greedy?
p; September 18, 2009 12:16 PM
Anonymous said...: If it is an investment with a registered company that can be searched through ACRA and with supporting documentations of the investment, it should be a civil case.; September 18, 2009 12:20 PM
Anonymous said...: Feedback to SPF through e-Mail.

Why wait if true?; September 18, 2009 4:40 PM
Anonymous said...: The problem with land banking is that it is one of those clever financial schemes which cleverly exploit rules about land use in the UK.

The way the scheme works is this. The company offers to sell a piece of land to the investor. This land is usually almost worthless. It however can be transformed to become a valuable piece of real estate if the appropriate planning permits can be obtained.

Most land banking companies will specify quite clearly what the investor is paying for in terms of the land and in terms of the service the company is providing to secure these permits.

The dishonest part of the operation of course is that investors are charged ridiculous amounts for the service of securing the permits. This service often amounts to little more than writing in on a regular basis in hope that the planning permit would be approved. As long as the company continues to write in, the company is, in a legal sense, fulfilling what the investor contracted the company to do.

With regard to the option buy back, this appears to be a breach of contract. Breaches of contract are not criminal offenses. Most often, contracts would have liquidated damages (LD) provisions to cover what happens in the event of a breach. If there is no LD clause, it is usually very difficult to claim damages since there is in effect, no a-priori agreement of what would happen if the company failed to deliver what was promised. In this particular case, the land banking company might have contracted that they would get a permit within 3 years or the investor would get their money back. After 3 years, the company failed to get a permit. It is however unable to pay the money back. This does not however give the investor a sure-win law suit. This is because there are many possible ways the company could offer to resolve the breach. For example, the company could offer to continue to offer to try for another 3 years.

On misrepresentation, I think the minibond case has shown just how difficult it is to make claim since the company will put up the defence that the investor "went in with his eyes open".

Hence unless there is a law passed to make the practices of land banking companies illegal (like it is illegal to run a pyramid scheme), what these companies are doing appear to be perfectly legal. I seriously doubt if anyone who is currently running a land banking scheme could be convicted in a Singapore or even UK court.; September 18, 2009 4:57 PM
Anonymous said...: There are always gullible and greedy investors around. Hopefully they will wake up and take responsibility for themselves. Always running to TKL to raise a hue and cry while not educating themselves and practising self accountability would not solve their problem forever the next time a scam comes round again.; September 19, 2009 4:23 AM
Anonymous said...: Complainant can always lodge their own report at http://www.spf.gov.sg/epc/ePCLinks.html. It is aself lodge report. Once lodged, it is official for investigation to carry out. How come no one use it?; September 19, 2009 8:57 AM
Steve said...: A Land Banking company ran adverts on Singpapore TV in October 2008 with estimated returns of 250% in 3 years.

http://www.youtube.com/watch?v=K43f-jvMG2o

So in two years time those investors should see returns of 250%. Yet in the UK press a representative told the newspaper there was no intention to even apply for planning permission for at least 4 years. A represetative also indicated part of the Land Banking Company web site was untrue.

http://www.hounslowchronicle.co.uk/west-london-news/local-hounslow-news/2009/08/13/is-concorde-village-a-real-opportunity-109642-24443896/

I accept estimates can be wrong but the basis of those estimates should be revealed if you are going to advertise on national TV.

The below site shows going back several years the local authority has made its position very clear.

http://www.whatdotheyknow.com/request/position_on_green_belt_and_lower; September 19, 2009 7:25 PM