200 lose $6m in British land deals
Blow for investors here after UK real estate firm shut down by British govt
By Liew Hanqing
NEARLY 200 investors here who thought they had bought a piece of England have as good as lost an estimated $6 million in total.
They had at various times since 2006 purchased plots of land in rural places like Swindon and Gatwick for $15,000 each through Singapore company Land International (Far East), and had been promised 'high returns with regular payouts for three years'.
But the company's parent, Land International, was shut down by the British government in 2008, following an insolvency probe.
Despite this, land plots continued to be sold to investors here through Land International (Far East), British news reports said. Not only were the plots sold, their buyers were told the company would seek planning permission to develop these tracts of land for them.
But news reports there said investigations have revealed the land plots have been zoned as 'greenbelt' or protected land, on which no development is allowed.
Investors who spoke to The Straits Times said they realised something was amiss when payouts on their investments stopped coming late last year.
Mr Roel van Leeuwen, a Singapore permanent resident and retiree who invested $120,000 in Swindon through Land International (Far East), said he had been receiving quarterly payouts since 2007 to the tune of an 8 per cent annual return on his investment.
The payouts dried up last November, around the time he read reports that Land International had been shut down.
He said he approached the British authorities this week to check whether the land plots had been registered in his name but has not received a reply yet.
Mr Simon Beh, a director of Land International (Far East), confirmed that the company stopped payouts to investors when it ran out of money late last year following a financial dispute with its parent.
He said the investors had been issued title deeds for their plots, which made them official owners, so they were unlikely to get their money back.
He suggested that investors here band together to appoint their own consultant to get planning permission for the land, 'provided the land has potential for planning permission'.
Mr van Leeuwen said, however, that investors had been told upon signing up that a planning consultant would be hired on their behalf, but this never happened.
Land International began operating in 2004. It bought greenbelt land in various parts of rural Britain, sub-divided it into plots of around 4,360 sq ft, and then sold these to about 700 investors in various countries.
By the time it was ordered shut, it had raked in an estimated £10 million ($20.4 million), British news reports said.
Mr Beh declined to disclose the exact amount investors here had jointly parked with his outfit.
When contacted, the directors of the parent company distanced themselves from the Singapore business.
One of them, Mr Stephen Meissner, said he and Mr Michael Morris, the other director, had 'no say' in the day-to-day operations of Land International (Far East). He also claimed to have been unaware that the Singapore arm had introduced a programme promising regular payouts - until it was launched.
The programme, dubbed the 'Grand Max' scheme, promised payouts of between 6 and 8 per cent a year.
Mr Meissner said the scheme 'was not something that we had ever implemented in the United Kingdom and never would have'.
But Mr Beh disputed this, saying the directors in the parent company knew about Grand Max, but had chosen to 'abandon' their business here.
Meanwhile, Mr Seah Seng Choon, the executive director of the Consumers Association of Singapore, urged investors to do their due diligence before investing, and described land-banking projects as high-risk investments.
He said: 'Investors should get as much information as possible on the land being offered, such as the condition of the land, its leasehold and restrictions on its use.'
The investors here will find no shelter under the law for the kind of investment they have made.
A spokesman for the Monetary Authority of Singapore said the Securities & Futures Act (SFA) and the Financial Advisers Act (FAA) apply only to real estate-related investment products which are in the form of securities.
'Land-banking investments involve investors acquiring direct interests in real estate rather than in securities related to real estate and, as such, fall outside the scope of the SFA and FAA,' the spokesman said.
hanqing@sph.com.sg
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NO LEGAL RECOURSE HERE
'Land-banking investments involve investors acquiring direct interests in real estate rather than in securities related to real estate and, as such, fall outside the scope of the SFA and FAA.'
A Monetary Authority of Singapore spokesman, referring to the Securities & Futures Act (SFA) and the Financial Advisers Act (FAA)
The Swindon site which was divided into plots and sold to investors who said they were promised high returns with regular payouts for three years. -- PHOTO: LAND INTERNATIONAL (FAR EAST)
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