Tan Kin Lian's Blog: Land banking - more investors caught

Friday, March 12, 2010

Land banking - more investors caught

An investor called me. She invested a large sum of money in a land banking project with the promise of 12.5% interest on maturity at the end of 6 months. On maturity, the company did not honor the promise to pay back the investment. They asked her to extend the investment by another 6 months.

She visited a section in Hardware zone and was horrified to learn that many other investors was caught in a similar situation. She refused to extend the investment but the company has not paid back her money, in spite of her repeated requests.

The investor said that she was deceived because the land banking company had a Singapore Quality class awarded by Spring Singapore. She thought that this classification indicate that the company can be trusted to honor its promise.

The land banking company is conducting more road shows and investment talks, and more investors would be caught in this type of investment.

Many investors had already complained to the Commercial Affairs Departments of similar investments during the past year. Apparently, the CAD had not acted on these complaints. During this time, more people are being caught in similar dubious investments. It seems that a few million dollars of investments are being collected each month.

I am really at a loss on how to help these investors who were deceived by these investments. I hope that the newspapers will write a story about it. It should be a crime for the company to take deposits with the promise to return the money with interest, when they do not have a banking licence. How can the Authority stand by and allow such operations to continue?

Tan Kin Lian

40 comments:

Anonymous said...: Singaproe quality class only ensures there is a control in the procedures. It does not control the quality. Many schools or companies have this SQC & other certifications but does this mean they are producing excellent results?; March 12, 2010 4:03 PM
symmetrix said...: Mr TKL,

Tks for issuing such a timely warning.

How are blog visitors and the general public to know which are these landbanking companies, so that investors can steer clear of them? Some of these products may be disguised so well as to not use the term "landbanking". In such cases how is one to know?

Info must be disseminated in such a way not to expose blog owners or visitors to possible libel suits. Perhaps FISCA can send confidential emails to its members advising them about suspect products.; March 12, 2010 4:09 PM
Vincent said...: 12.5% every 6 month and that equates to 25% per annum!!!! Wow, even Warren Buffett dare not promise you that his investment can achieve such return.

Sometimes, stupidity and greed can make a lot of people do all sorts of silly things.; March 12, 2010 4:12 PM
Anonymous said...: Hi,
If the land banking company did offer returns in a fixed period, then the MAS should step in just like dealing with Sunshine Empire. Investing in land is totally different from investing in Reits or the financial sectors. The land banking company needs a financial license to operate that. What is the CAD waiting for?; March 12, 2010 4:12 PM
Anonymous said...: Maybe CAD is short handed due to the sheer volume of the cases.

I also found out from personal experience with them(it's an eye opener!) that with regards to enforcement of the law (on a different matter), the authorities can choose not to enforce it based on their evaluation of its merits, even though the law clearly states that it needs to be complied.

That explains why there is sometimes inaction from the authorities in certain instances when there is non-compliance of the law.; March 12, 2010 4:16 PM
Tan Kin Lian said...: I spoke to an investor who invested in this land banking company some time back. The investment had matured and he did not get his 12.5% interest nor the capital. He has waited for nearly one year.

Each time, the company promised to make payment by a certain date, and keeps delaying it. The latest date that was promised was April 2010. He hopes to be able to get the 12.5% interest, but may have to agree to renew the investment.

The land banking company is getting many new investors. It is likely that the money from the new investors will be used to pay back the interest for the old investors. This operates like a ponzi scheme.; March 12, 2010 4:43 PM
Consultant said...: Those conned investors need to gang up together to prove it is a ponzi scheme, otherwise authorities will tell you caveat emptor and commercial nature -- you want you sue in civil court.
Sunshine empire kenna becoz the authorities decided there was fraud and ponzi scheme going on.

Please don't bother with those SQA, SQC, ISO, S'pore Quality Mark, PD, PDE, Moodys, S&P, AAA or AA+ rating, or whatever crap certification. All is bullshit. Main aim is to con people into buying. You think if no commercial interest the companies bother to do all these? At the end of the day is you die your business. Even if you millionaire, you also cannot get bigshot lawyers because they also have business dealings with big companies and they dowan to burn bridge.

This is economic justice as practiced in Singapore. Rich get richer, poor get poorer. Only sure way to protect yourself is to get LKY relative to co-invest also. If his relative kenna screwed, LKY himself will mobilise all the Lee&Lee, Drew & Napier partners to fight with knuckledusters and hatchets.; March 12, 2010 4:58 PM
Anonymous said...: These investors are plain stupid and greedy. No investment can give you 12.5% p.a. and still viable
to be in business after one year.
Probably these companies will fold up and abscond after one year of
collecting deposits.
The Govt would not care less,
as it is plain stupidity, nobody
would wipe dirty bottoms clean for
you.; March 12, 2010 5:03 PM
Anonymous said...: The authorities are sleeping. Or more likely they are pushing responsibilties to one another.

Look at the Sunshine case. They intervene so late. By that time, lots of common folks have been cheated.

It seems like matters that do not affect important or influential persons in the society or matters that do not make money from our civil servants do not care.

Very sad case !; March 12, 2010 5:14 PM
SD said...: I know that there is an investor alert list posted by MAS as per below:

http://www.moneysense.gov.sg/check_our_list/Consumer_Portal_IAL.html#f

Perhaps we should look against the list first before dealing with any firm that we have not heard of before. Just a safety check..; March 12, 2010 5:14 PM
Anonymous said...: What's the different between land banking and Minibond?

The difference is who are the people who got burnt.

Confirmed: Town Councils
unconfirm: MPs, Cabinet Ministers, Wife of MPs, Stats boards.

If TC can tied up $16 million in this product, don't you think conservative investors like MPs, wife of MPs or even Cabinet Ministers also got invovle?

As for land banking, since there is no important personality involved then the the action is "No Action Needed". So don't expect anything from MAS or the Govt.; March 12, 2010 6:00 PM
Anonymous said...: What if an insurance agent promotes her growth plan with guaranteed return of 4.18% when everybody knows for 100% chance it will not return 4.18%? Is it a scam too? Can the regulator be alerted and make arrest?
Cheating is a siezable offence, right?; March 12, 2010 6:25 PM
Anonymous said...: buyers beware, anything goes; March 12, 2010 7:10 PM
Anonymous said...: Rex comments on Anon. 4:16 post:

Quote:Maybe CAD is short handed due to the sheer volume of the cases.unquote

This is pathetic!! Even if CAD is short handed, when it realises that volumes of cases are rising, it is their bound duty to call press conference and alert the public to beware of such schemes. Just like hospitals, if they were to deal with H1N1 cases and they are short handed, they would call the media and issue a general warning, it is their fair duty in consideration of their salaries allocated to them. How can they just pretend nothing is happening, isn't their such thing as a conscience any more?

...i can only conclude that there are too many unproductive people in CAD and MAS collecting salary but giving zero or near-zero output, or producing output defined as "that which pleases only the immediate boss".

REX; March 12, 2010 7:54 PM
Anonymous said...: It takes a lot of resources and funds to investigate scams, plus those cheated do not involve Govt
funds, so the authorities could not be bothered, they have better
things to do.Investigations involve
transnational work, and this is costly in terms of financial and human resourcesSo just grit your teeth and cut loss. You dig your own grave, out of greediness.; March 12, 2010 8:08 PM
Anonymous said...: Con jobs are flourishing everywhere with more 419 Nigerian Scams these days. The saying: Suckers are born everyday and 2 on a Sunday.

Poor Singaporeans got burnt on many fronts and yet more are falling into the trap why?.......Lack of awareness or simply joining any Get rich schemes
for wanting to be better than the "Stingy Nanny" so don't blame the "STINGY NANNY" if things go wrong?; March 12, 2010 10:13 PM
World Class Citizen!! said...: People!! people!!... we are Zurich of the East!!... world class!!

Look at our GDP performance!
Look at our Airport!
Look at our public housing!
Look at the money invested!!
Look at our world class hospitals!
Look at our world class markets!
Look at our world class transport!

We are the financial hub outside of Tokyo!!

Look at our world class businessmen
Look at our world class poilticians
Look at our Judiciary!
Look at our water treatment!

We are the financial hub of the East!

We are Singapore.. we are special!; March 12, 2010 10:46 PM
Anonymous said...: after so many posts, which company in subject is that?
is it edgeworth?; March 12, 2010 11:28 PM
Anonymous said...: Having gone through the scam of MB,I urged ppl not to criticize the victims. Many are ignorant and naive, like I used to be. Except this time is not a mere 5%, but 12.5% promise.
Those gahment certifications are a lot of craps, true. Just look at how many ppl lost their hard earned $ the last few years because of that. Either there is growing complacency in the gahment sectors, esp the financial sectors or those ppl just want to make more money. As long as there is $ to be made for providing certication or approving the sale of a financial product, those "servants" or MAS will gladly issue it. Who cares whether it's genuine or not. Finance sector is known for promoting quick $. I had an ex-colleague who used to be a sales executive for the "4 sticks" bank. He told me that pushing financial products is damn good money, so he quit his engineer job. He makes a basic of $2.5K / mth, and plus commission, he can make $10 to 15 K / mth. Luckily he left that bank just before LB collapse,....to become a property agent. Hope he never con ppl anymore. Now the incident is ovre, may be he will join another bank. Financial and property sector both need strong regulation, the transactions are big $. We kept reading all the news and complaints of victims who were con and what is the gahment waiting for ? Need to replace our PM or ministers with Obama and team, in order to have a true reform and not wayang wayang ???; March 12, 2010 11:53 PM
Anonymous said...: Look, people are naturally risk averse and if there is a opportunity to make big without risk it is only RATIONAL and LOGICAL to grab it, right? This is the case of ignorance and NOT greed.Ignorant is therefore not a bliss. Ignorance is always exploited by rogue salesmen and there are plenty in our midst. From insurance agents, to property agents and land banking we are always accosted by either one of them.
It leaves us to wonder what is the regulator doing?; March 13, 2010 12:00 AM
Anonymous said...: This is why I ask many times why our govt is allowing foreigners to come in and gobble up our guppies? I suddenly have the horrified idea that we are being regarded as fish bait... no one will be left behind, this phrase suddenly brings chill to my spine...; March 13, 2010 1:22 AM
Anonymous said...: Maybe this particular land banking company has connections at the highest level to avoid being investigated ! Our government leaders and officials are allowing these wolves in to make a big killing without the risk of being prosecuted. What a sad thing...; March 13, 2010 1:51 AM
Anonymous said...: Why should they investigate?

Singapore Inc is successful.
It has successfully built up its assets.
It has successfully divested its liabilities to the individual at no consequence to itself.

So what if you were cheated? After all you had wanted a higher rate of return and must be willing to take the higher risk that accompanies that, caveat emptor, etc.

It's this type of short-term helicopter vision that hampers the long-term prospects for Singapore Inc. e.g. After the mini-bond episode, where will an investor place their money? Hong Kong or Singapore Inc?; March 13, 2010 9:56 AM
Tan Kin Lian said...: Reply to 9:56 AM

It is the duty of the Government to stop crooks going around to cheat people. It is also the duty to stop criminals going around to harrass people, destroy property, steal, etc.

Investment scams are created to cheat people. Many ordinary people are not sophisticated enough to know these investment scams. They are being naive, but it is a fact of life. Their naivety does not give the licence for crooks to go around cheating people.

It is a pathetic state of affairs that the Government leaders do nothing to stop these type of rampant cheating.; March 13, 2010 10:01 AM
Anonymous said...: Government has the responsibilities of not just to stop these cheating scheme but also to educate the public. With common sense, to guarantee >10% return in 6 months is very unlikely, yet the greediness of human being often make people to think and act without common sense. This is the root cause of the financial crisis.; March 13, 2010 11:19 AM
Anonymous said...: Looks like we have the potential and ambition to be the land banking hub of the world.; March 13, 2010 1:54 PM
Anonymous said...: On the one hand:

Singaporeans are averse to risk
( always play safe )

On the other hand:

Singaporeans are willing to risk
( lose their pants in investments)

So, what is the issue here?.. there should'nt be any.; March 13, 2010 2:21 PM
Ex-Con said...: For MAS to take action against land banking, parliament will need to amend the laws first. Because as of now, land banking is not treated as a "security" unlike shares, bonds, unit trusts, structured deposits etc. Land banking in Singapore is treated as "real estate", hence got any problems you will need to settle in civil court.
Only if got proof of cheating, fraud, ponzi scheme then CAD or police may take action --- and as someone pointed out, also depends if they think is worth their time or not.

Background info here.; March 13, 2010 4:12 PM
Anonymous said...: The problem with Singaporeans on investing overseas land is because of land scarse Singapore........simple as ABC.

Fact that many Singaporeans are still invested in LandBanking/Physical Overseas properties provided they know where to scout for the best!

Always do your Due Diligence & NOT invest foolishly!

Money Luck is always there but if you pick the wrong company, then Best of Luck?; March 13, 2010 10:15 PM
Anonymous said...: Yeap..... someone mention about Edgeworth - just wait and see.
Anyone heard about CHGS (Palm Oil Plantation cum Land Banking sort
of investments promoted in Malaysia & in Singapore too???

All I know, EL NINO (Global Warming) will have an adverse effects on Palm Oil, probably Crop failure and this will depress CPO prices; March 13, 2010 10:21 PM
Anonymous said...: Useless PAP govt as usual sleeping on the job.; March 14, 2010 1:57 PM
Anonymous said...: I myself is also a victim of landbanking, the company used to be called Land International Far East, now Land Wealth Centre (LWC).

The UK Directors ran off with the funds, local Director setup LWC and denied all responsibilities.

Reported to CAD and was told to produce evidence, what's becoming of Singapore justice system?? aren't they suppose to investigate and gather the evidence? Really world class!

Mr. Tan what would you advise investors who are in this situation?; March 14, 2010 2:07 PM
Upset said...: I myself is also a victim of landbanking, the company used to be called Land International Far East, now Land Wealth Centre (LWC).

The UK Directors ran off with the funds, local Director setup LWC and denied all responsibilities.

Reported to CAD and was told to produce evidence, what's becoming of Singapore justice system?? aren't they suppose to investigate and gather the evidence? Really world class!

Mr. Tan what would you advise investors who are in this situation?; March 14, 2010 2:12 PM
Steve F said...: Singapore papers may not have got this yet but there is an article related to Land Banking in Singapore in todays UK Telegraph.

Green Belt housing scheme promoted by footballers leaves investors in the red.

Investors from the Far East have been left without a penny gain in four years after putting money into a “get rich quick” property scheme promoted by two former England football players.

The two former footballers, now living in the Far East, used their celebrity status to market the scheme on television across south-east Asia in 2006.; March 14, 2010 3:07 PM
Anonymous said...: Dear Mr Tan,

Please do not feel 'at a loss at how to help these investors'. I remember you have warn your readers about land banking quite some time back. I respect your good intentions to help but it is better to spend effort to train your readers who are genuine in acheiving financial literacy.

There is a sense of gambling urge in most of us to win and land banking makes use of this mentalilty to create their product.

There is no such good deal in the world that will offer u better deal than the bank interest rates for doing nothing. When you buy a property, you need time to view several units to understand location, psf cost ,etc. When you buy shares, you need to read up financial reports or know P/E ratio, at the minimal.

Land bank don't sound logical when I hear it from my friends who invests. The best part is these are low capital company...check them out, do homework, and not buy cos a relative/friend/spouse buys them.; March 14, 2010 4:58 PM
Anonymous said...: I hear when gold was being sold in paper form many years ago to uncles and aunties in Hong Kong and it was proved a fraud, there were nothing the HK government could do as these were set up as legitimate business. There were volunteers who went to places near the offices to distribute flyers xplaining the fraud to unknowing investors.

Mr Tan may consider enrolling some of the victims to help pass some flyers near all these landbanking offices in return for the huge help rendered.; March 14, 2010 5:04 PM
Anonymous said...: How about ganging up with the Indonesian Govt to sell islands to the West? Promote these islands as private resort potential.
We can call it Island Banking Scheme.; March 16, 2010 2:28 PM
Anonymous said...: I really had no idea how these people get to know these sorts of information. I had never com across these advertisements before.; March 16, 2010 5:18 PM
Anonymous said...: Is LandBanking a PONZI SCHEME?
or Scam?; March 25, 2010 12:34 PM
Steve said...: Scam / Ponzi / Risky Investment ?
The land product sold typically has almost no value relative to the price paid. If that is all that happens then basically you have overpaid for a product. Buyer beware.

As soon as the Land Banking company makes any claims for investment returns you are either part of a Scam, Ponzi or High Risk Investment.

If I sell you a pebble for S$100 without making any claims then if you pay me S$100 presumably you see S$100 of value in a pebble. Your choice. Your loss.

What if I claim the pebble will be worth S$300 in 3 years time. What if I also know pebble experts quite clearly say it cannot happen? What if i say in the unlikley event it does not happen you will still own a pebble worth S$100?

I am lying since the pebble is not worth S$100 and all independent experts indicate that the Pebble will never triple in value. This is a scam.

What if I can't sell enough pebbles? I need to make the scheme more attractive. I say I will sell you a Pebble for S$100. I tell you I estimate the Pebble will triple in value in 3 years. I will also pay you $$12.50 for each six months you hold the Pebble. I tell you you can still sell it back to me after any 6 month period for S$100.

How would i fund such a scheme?
This is a loan by you to me backed by a worthless pebble. I invest the money you give me and hope to earn more than 12.5% to enable me to pay you back and take some for myself. Illegal money lending I would think.

Or what if I have no intention to pay you back the interest. I calculate you wont sue because you think you have a S$100 pebble that might be worth S$300 one day and you dont want to lose that.
This is clear scam/ fraud.

Or I just hope I can keep selling enough pebbles and persuade enough people to re-invest their 12.5% "interest" that I never have to pay more money out than I get in. I take a percentage of each transaction for myself and should the system fail i can run away.
This is a Ponzi backed by a pebble.

Without opening the Land Banking company books it is impossible to tell what they are doing. With Land Banking there is a very high chance you will lose all or most of your money.; March 29, 2010 1:43 PM

Friday, March 12, 2010

Land banking - more investors caught

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