I bought a land banking product and was given an option to sell back the product after on year at the original cost plus X%. After completing this period, I gave notice to redeem the product according to the terms. The land banking firm did not pay the money back to me. A few other investors were caught in the same situation. We made a complaint to the Commercial Affairs Department, but were told to see a lawyer as this is a civil case. Can we ask the CAD to investigate if the company were cheating us?
REPLY
Cheating is defined 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.
At the time of selling the product, the land banking firm might not have any intent to cheat. They may have some reason now to be unable to honor the option to repay the investment, or may have some liquidity problem. This is probably the reason why CAD is not pursuing the matter as a cheating case, and has advised you to consult a lawyer to take civil action.
However, if the land banking firm, knowing that they are not able to fulfill its commitment for repay the investments to earlier investors due to liquidity problem and continues to market similar products to new investors with similar promises, it can be argued that they intend to cheat the new investors. You can bring this matter to the attention of CAD
12 comments:
I am one of the affected investors. Surely, the CAD should check with the land banking promoter to get their reason? I have been given all kinds of lame excuses. I cannot afford to engage a lawyer, as the fee quoted is very high.
I regret making this investment, but feel that the CAD shuold at least do its duty to investigate a complaint when so many people are involved.
If they have done so, they should at least tell the complainant what is the situation. The promoter may tell lies to the investors, but they have to tell the truth to CAD.
Why the gahmen allow this company to advertise on TV? This gave the impression that they have been approved by gahmen.
How do you get the impression that TV ads (or other ads) must apply to government for approval?
The media company accepting the ad placement need only to check no breach of advertsing standards by way of pornography or politics or religious claims. If so, the company would also be frightened and reject the ad placement. Otherwise, collect the money and place the ad. Caveat emptor.
To put it simply, an advertiser don't need to submit financial reports and accounts to place adverts. Just submit copy and pay.
But I think they did investigate Sunshine Empire (SE) and it took them 2 years to bring the SE bosses to court since the first complaints surfaced.
So for those land banking victims, be patient lah. Maybe down the road there maybe some changes in the way CAD view it and eventually they may haul the scammers to court.
Mr Tan,
Ref to your last para
"However, if the land banking firm, knowing that they are not able to fulfill its commitment for repay the investments to earlier investors due to liquidity problem and continues to market similar products to new investors with similar promises, it can be argued that they intend to cheat the new investors."
Then how come the banks like POSB recently can still come up with structured products/deposits knowing that some of these had previously caused total losses (for whatever reasons) to customers?
So based on your above, can it also then be argued that there is also intent to cheat?
To 12:29 AM
These are separate matters. You have applied my reasoning out of context.
CAD have better things to do then just entertain u 'stupid investor', greed is ur chosen choice so,dot put e blame squarely on the CAD, or govt, if evryday & evrytime "investor" like u all give problem to tis society,whose money goes to paying ur idiotic decision?!dot u know 'emptor' or u r blind with ur choice of decision & now appear 'holy innocence'?
The landbanking firm will have to prove that in their initial offerings, they have the reserve or the land has the value to promise the repayments. If they can do that, which I think they can, it's not cheating, but a failure in investment.
POSB still sells them because consumers still want them. Simple.
UK land plots offered under these land banking schemes have a tiny chance of obtaining planning permission. Planning permission could only happen due to an unplanned or unexpected event as this land is currently identified as protected land. This tiny chance is why such schemes just fall within the law despite the efforts of the authorities in the UK to close them down.
UK land is a reasonable investment at the right price. Plots sold under land banking schemes are normally hugely marked up against their open market value (typically 10 - 20 times). In reality the plots are almost worthless without planning pernmission which will almost certainly never happen.
If the owners of the Land Banking company offer a guaranteed return based on future earnings from such land plots surely there is a reasonable case that they are knowingly misrepresenting the investment opportunity ?.
Also in this case it is a kind of Ponzi because without land profit the only way to honour last years investor payments is to make payments from this years customers.
The business model is not viable in the long term and any decent accountant or auditor should know that.
Govt allows banks to advertise their products without screening their nature of risk so of course land banking can also advertise. I had a brush with MLM few years ago when I was retrenched & my ex-colleague joined one. It was a good thing that I decide not to follow suit. Consumers has to be very careful.
An ordinary investor got cheated and complained to the authority.
But the cheats, being smarter than the victim (don’t forget their profession is to con), manage to create an impression that the victim is greedy, stupid and has unrealistic expectations (such as expect high returns and no risk ….).
The results are that the poor investor not only got cheated but also got humiliated.
This is why many people got cheated but dare not to complain to the authority.
Nowadays, all the gahmen departments approach is wash hand. Probably busy with their year end bonus and how much increment to ask for next year. The recommmendation is always to engage a lawyer yourself, knowing that most people cannot afford to. There is absolutely no protection for the citizens. I learnt my lessons from the LB case. The best way is to keep the money in DBS or under your pillow and dun ever think about investments of any kind or form just to make a 5% or 10% return but risk losing 100%. Else the gahmen will sya you greedy or walk with your eyes open when you complaint. Nowadays, anyone call me to invest in anything, I ask them to go fly kite. It's dangerous because there's no consumer protection here unlike in the US. Or unless you are like Ooi HL who has the money to sue Citibank then it's a different story. This is how I feel after losing all the money to LB MB but gahment said we are not vulnerable and what other stupid wash hand nonsense !
P/S: you dun hv to agree with me. But i need to protect myself hereon.
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