Look at the section in bold - this is a really a sad case, with retirees possibly losing ALL their life savings! Hence, it is important to know what you are investing in!
May 25, 2011
Don't keep clients in the dark: Sias
Profitable Plots urged to communicate with investors, explain itself
By Yasmine Yahya
A BODY championing the rights of retail investors has urged the directors of Profitable Plots to communicate with its clients immediately, instead of leaving them to wonder about what has happened to their money.
The Securities Investors Association of Singapore (Sias) is also calling on the authorities to look into regulating alternative investments such as land banking - one of the areas of investment that Profitable Plots was involved in.
Land banking is the practice of purchasing undeveloped land with the intention of holding onto it and later selling it, usually to a developer, at a profit.
Profitable Plots has been under probe by the Commercial Affairs Department (CAD) since last August, when it received complaints from investors claiming the investment firm owed them money.
By March this year, the white-collar police had received 229 complaints relating to $23.5 million worth of investments.
The company's clients, mostly retail investors, had put their money into various investments offered by Profitable Plots, including land in Britain and the Philippines, and an industrial lubricant called Boron.
As part of proceedings relating to the freezing of company assets, District Judge Roy Neighbour has ordered the CAD to provide the next update on its investigation on July 8.
However, investors are hoping that they will hear from Profitable Plots sooner, as they have been kept in the dark about the state of their investments, said Sias president David Gerald.
One of these investors, 48-year-old business owner Raj Chotrani, told The Straits Times that investors have been trying to speak to the company directors since the middle of last year, when they realised they were not receiving payments owed to them. 'If a company fails to make a payment or can't honour a contractual agreement, they have to explain why - that's the decent thing to do,' he said.
Mr Gerald said that since the CAD raided the company's Stanley Street office in August last year, attempts to contact the firm's directors have been met with a standard reply by the directors' lawyers, saying that they cannot communicate as investigations are under way.
'This conduct compelled investors to believe that the company's standards of corporate governance were abysmal, and even frightened a few that their investments are being mismanaged,' he told a media briefing yesterday.
Among other things, the investors want to know what went wrong and whether the company had ever intended to honour its promise to pay a 12.5 per cent return on their investments in Boron and a real estate project in the Philippines.
They would also like Profitable Plots to explain why its auditors were changed thrice between 2005 and 2009, and why its company secretary was changed several times.
'This case raises the need for land banking investments to be regulated,' noted Mr Gerald. 'It would appear that anyone can set up such businesses in Singapore, easily leveraging on the brand name of Singapore, and citizens and foreigners who have confidence in our system invest without hesitating on the promise of higher returns.'
He noted that an estimated 1,500 Singaporeans and 4,000 foreigners are believed to have invested their money with Profitable Plots.
Some of these investors are retirees who have sunk significant amounts of their life savings into investments with the firm, he said.
Several of the foreign investors told Sias that they had chosen to invest with the firm because it was based here, and they were confident about Singapore's reputation as a financial hub with strict enforcement of regulations, he added.
When asked if the Monetary Authority of Singapore (MAS) would consider regulating land banking investments, a MAS spokesman pointed The Straits Times to a guide on land banking on its website.
The guide says that the Securities and Futures Act (SFA) and the Financial Advisers Act (FAA) give MAS regulatory powers over financial markets.
'However, land banking investments typically involve investors acquiring direct interests in real estate rather than securities related to real estate. As such, land banking investment typically falls outside the scope of the SFA and FAA,' the guide adds.
yasminey@sph.com.sg
May 25, 2011
Don't keep clients in the dark: Sias
Profitable Plots urged to communicate with investors, explain itself
By Yasmine Yahya
A BODY championing the rights of retail investors has urged the directors of Profitable Plots to communicate with its clients immediately, instead of leaving them to wonder about what has happened to their money.
The Securities Investors Association of Singapore (Sias) is also calling on the authorities to look into regulating alternative investments such as land banking - one of the areas of investment that Profitable Plots was involved in.
Land banking is the practice of purchasing undeveloped land with the intention of holding onto it and later selling it, usually to a developer, at a profit.
Profitable Plots has been under probe by the Commercial Affairs Department (CAD) since last August, when it received complaints from investors claiming the investment firm owed them money.
By March this year, the white-collar police had received 229 complaints relating to $23.5 million worth of investments.
The company's clients, mostly retail investors, had put their money into various investments offered by Profitable Plots, including land in Britain and the Philippines, and an industrial lubricant called Boron.
As part of proceedings relating to the freezing of company assets, District Judge Roy Neighbour has ordered the CAD to provide the next update on its investigation on July 8.
However, investors are hoping that they will hear from Profitable Plots sooner, as they have been kept in the dark about the state of their investments, said Sias president David Gerald.
One of these investors, 48-year-old business owner Raj Chotrani, told The Straits Times that investors have been trying to speak to the company directors since the middle of last year, when they realised they were not receiving payments owed to them. 'If a company fails to make a payment or can't honour a contractual agreement, they have to explain why - that's the decent thing to do,' he said.
Mr Gerald said that since the CAD raided the company's Stanley Street office in August last year, attempts to contact the firm's directors have been met with a standard reply by the directors' lawyers, saying that they cannot communicate as investigations are under way.
'This conduct compelled investors to believe that the company's standards of corporate governance were abysmal, and even frightened a few that their investments are being mismanaged,' he told a media briefing yesterday.
Among other things, the investors want to know what went wrong and whether the company had ever intended to honour its promise to pay a 12.5 per cent return on their investments in Boron and a real estate project in the Philippines.
They would also like Profitable Plots to explain why its auditors were changed thrice between 2005 and 2009, and why its company secretary was changed several times.
'This case raises the need for land banking investments to be regulated,' noted Mr Gerald. 'It would appear that anyone can set up such businesses in Singapore, easily leveraging on the brand name of Singapore, and citizens and foreigners who have confidence in our system invest without hesitating on the promise of higher returns.'
He noted that an estimated 1,500 Singaporeans and 4,000 foreigners are believed to have invested their money with Profitable Plots.
Some of these investors are retirees who have sunk significant amounts of their life savings into investments with the firm, he said.
Several of the foreign investors told Sias that they had chosen to invest with the firm because it was based here, and they were confident about Singapore's reputation as a financial hub with strict enforcement of regulations, he added.
When asked if the Monetary Authority of Singapore (MAS) would consider regulating land banking investments, a MAS spokesman pointed The Straits Times to a guide on land banking on its website.
The guide says that the Securities and Futures Act (SFA) and the Financial Advisers Act (FAA) give MAS regulatory powers over financial markets.
'However, land banking investments typically involve investors acquiring direct interests in real estate rather than securities related to real estate. As such, land banking investment typically falls outside the scope of the SFA and FAA,' the guide adds.
yasminey@sph.com.sg
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