Mr. Tan,
Do you expect the government to protect people who are stupid enough to put their money into nothing more than somebody's word? For example, if someone got people to give him $1 million - saying that he would give them 20% return by passing the money on to his anonymous friend involved in some business, and one year on, - the anonymous friend had disappeared?
REPLY
There is nothing that the government can do, if they are not aware about this activity. However, if there is a report of such activity, it is the duty of the government to investigate if the people are crooks that goes about cheating other people with scams.
In the case of land banking, which is really a collective investment scheme, there is a need to regulate these activities, as it has been done in most countries. The regulation will ensure that the money is collected and used for its legitimate purpose and is not misappropriated.
There is also a need to ensure that the managers act honestly in the interest of investors (i.e. fiduciary duty) and pay the appropriate price for the land. They cannot "cheat" the investors by paying an inflated price for the land, especially if they buy from a connected party where there is a conflict of interest.
Where the investment scheme is advertised in the media to the general public, it is necessary for the product to be regulated and approved.
I do not expect the government to protect people from foolish investments or to compensate them for their loss. But the government should at least ensure that crooks are not free to cheat other people without any restraint.
Tan Kin Lian
There are four categories of individual in a Land Banking investment scam
ReplyDeleteThe Perpetrator = Land Banking Company
The Victim = Naive plot buyer
The Enablers
.PR companies
.Lawyers
.Commission only sales people who ask no
questions
.The Media whon report press releases
instead of asking questions
.Financial Advisors
The Bystanders
.Everyone who knows but does nothing to stop it
Hi Steve,
ReplyDeleteYou left out the regulator, the Government. They also have a duty to stop the scam.
There are regulations already in place.
ReplyDeleteA) A business cannot operate in Singapore without being registered with ACRA
B) Advertisements must fall within guidelines.
Singapore operates in a VERY friendly, pro business manner. As long as there is no infringement into religious and racial issues, its all green light from Changi to Tuas.
All I can say is " buyer beware". That includes things like CPF LIFE.
There is no free lunch anywhere.
Some will even argue that this is freedom, as in democracy. The freedom to choose. Choose wisely.
Choose poorly and face the consequence.
Protect the uneducated? why? If they have the knowledge about 10% returns and how they benefit, why protect them from greed? What if they made money from these? I dont think we will hear of any complaints and " ... woe! me!.. please help me! I have been scammed!"
They'll laugh all the way to the bank!
Interesting - so if a scoundrel charges your sweet but naive mother s$10,000 to save you from kidnappers you are OK ? Or a Taxi charges a tourist S$200 to get from Changi to downtown because she doesnt know the fare your are also OK ? Let the market set the rules seems to be your idea and let the weak get buried by the strong.
ReplyDeleteI agree with let the buyer beware but if a scam is clearly identified why allow it to continue and protect it with defamation law?
Mr.Tan.
ReplyDeleteMy experience in the UK with Land Banking is that the UK Government did "leave it to the market" for a long time. This seemed to be on the assumption that Land Banking would lead to wider ownership by small investors. Unfortunately it has become apparent that nearly all of these schemes are cash generation scams. The UK national and local Government are now being much more proactive in reporting and acting against these companies in a much less neutral way. This is probably why many of these companies are now trying to sell their investment products in Asia.
Some examples of stronger commentary from the UK Government are here.
http://www.eppingforestdc.gov.uk/news/2009/land_banking_scheme.asp
"There are examples all over the UK of such schemes, where unsuspecting buyers have purchased plots of land believing that the value will increase significantly. There is no example to date where planning permission has been granted for all or part of an area of land that has been divided into plots in this way. Purchasers are left with a piece of land with agricultural land value, and very little prospect of being able to sell it on or develop it.
Investigations into these types of schemes have been carried out by the Financial Services Authority (FSA), Trading Standards and several national newspapers. Some that have claimed to be able to seek planning permission for a “collective” of plot owners have been closed down. Such “collective investment schemes” need to be authorised by the FSA to be legal."
http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=405956&SubjectId=16
"Three companies involved in the continued mis-selling of land in Scotland have been ordered into liquidation following a Government investigation."
The scheme, called ‘landbanking’, involved selling plots to investors on the basis that planning permission was very likely to be granted resulting in a substantial increase in value. In fact, there was no likelihood of planning permission being granted.
'Some companies exploit land banking as a means to induce investors to buy land on the promise of high returns which may never materialise. We will continue to crack down on companies and individuals which deliberately mislead the public in this way.'"
http://www.sevenoaks.gov.uk/environment/planning/planning_policy/2760.asp
"People thinking about buying plots of land in the green belt for housing should be aware that the Council will strongly resist the development of such sites. All green belt sites across the country are protected under planning law and any green belt site is extremely unlikely to get planning permission for any kind of development."
U all seem to know a lot about land banking, and tend to generalise the areas of such lands to be in the UK only. Ok, why not blow up the matter so big that it will get on the papers? We have fellow Singaporeans who have invested in UK greenbelt areas for years now, in the hope of getting the returns "promised" to them. Will they get it back? It's some sort of a unethical fund-raising process right? There seems to have adequate proof to blow up the matter and start investigations, so why not?
ReplyDeleteMAS washes its hands. Bochap, not my business.
ReplyDeleteThen what is MAS's business? MAS also says it is not its business to regulate the insurance companies and the banks.They are good at self regulating. See, not MANY complaints.Isn't self regulation good?
Does an average Singaporean need to know all about medicine before seeking the doctor's advice and treatment? Is this what "Anonymous" meant by "Buyer Beware"? What are professionals for when buyers need to do ALL the homework? Where are the professional ethics?
ReplyDeleteI agree with another anonymous. If an advertisment is deliberately misleading or a finanical advisor promotes a scam product solely to earn a high commission is that really a situation of "buyer beware". Does the advertising and financial services market in Singapore really want us to assume that they are all liars and cheats when we speak to them?
ReplyDeleteTheir industry associations should put their house in order and reject the scammers before their reputation is completely destroyed.