Tuesday, June 01, 2010

Investors confront Profitable Group Director....

A few years ago, telemarketer from landbanking company Profitable Plots called me and I asked him about Walton International. He sent me a collection of negative articles on Walton. How they paid 3 times the market price to acquire cheap farmland in Canada[Link] then mark it up another 3 times to sell it to Asian investors etc. The reason why these companies are here is $5000 for a plot looks dirt cheap to Asians in HK & Singapore but to someone in Calgary or Alberta, they wouldn't pay $400 for the same plot. Investors should ask themselves when these companies advertise returns of 15-20%...why do they offer to lend you money at 8% to invest in these plots of land. It is downright silly.

In Malaysia, they raided a number of landbanking companies in Oct 2008[Link] including Profitable Plots. We may laugh at Malaysians for losing those jet engines and other negative demonstrations of competence but they did stop those toxic Lehman Minibonds from entering their country, recovered most of the money from Swiss-cash scam[Link] and yes, they are ahead in shutting down these landbanking scams. In Singapore, investors have to take matters into their own hands when it comes to unregulated investments and these group of desperate investors saw no other way to get their money back other than to turn up at Profitable Group's office to demand for it.

I was at a recent investment fair Asian Investment Conference & Exhibition at Suntec[Link] and there were several companies offering investments in commercial real estate in western countries. One sales girl I spoke to promised guaranteed returns on investments and so on. Many Singaporeans like such 'guarantees' and these companies are willing to put it down on paper. However, when they don't honor it, what can you do? Spend money to sue them? Report them to the police? These companies can just shutdown and disappear and you won't get a cent back. In fact guaranteed returns are a red flag especially if they are high (8% and above). If they can guaranteed returns, why are they selling the investment to you instead of keeping it for themselves? Investors who purchased products from Profitable Group are now finding it hard to get anything back despite the promises the company made earlier. In many countries such as Malaysia the authorities will quickly step in so that the maximum amount of money can be recovered. In Singapore they will probably wave this notion of "buyer beware"....basically its "you die, your business".

I urge Singaporeans to keep their investments simple - buy only things you can understand. A simple combination of dividend paying blue chip companies, sufficient insurance and some cash for emergencies will do for most people. Forget foreign property sold here. Why do you think they market these investments here? In Singapore, we pay the highest price for public housing in the world ($600K for a unit at Duxton) and that makes us think that a $100,000 landed property in suburban Australia is cheap. The truth is they might have marked the property up by 100% before selling it here. If you want to buy a property in Australia, get in touch with friends or relatives there who know the market and agents with good reputation. Never buy something marketed here - they sell it here because they can't sell it for the same price back home to people familiar with the market prices.


Shouting, then shoving [Link]

THEY came to demand answers and they were in no mood to take no for an answer.
So they marched up to two Caucasian men who were having a smoke and surrounded them.
The group of 11 men and one woman wanted to talk to one of the Caucasian men regarding their investments.

They identified him as Mr John Nordmann, group operations director of Profitable Group, a global investment firm, which, according to its website, has interests ranging from lubricants to property.

They claimed that the firm had not made good on its promises to them.
But the conversation outside Profitable Group's Stanley Street office in Shenton Way soon spiralled out of control into a shouting match. There was even some pushing.
Mr Nordmann told the group: "Calm down.Why don't you e-mail me your individual cases?"
His suggestion was not only instantly rejected, but it also upset some of the investors.
Said one of them, who gave his name only as Chris: "We have been e-mailing you for the last one year. Stop treating us as though we do not exist."

The shouting outside the office around 3pm attracted the attention of people at a coffee shop nearby. They got up from their seats and turned their heads towards the commotion.
This was when Mr Nordmann invited the group to go up to the firm's office to discuss the matter.

One of those in the group, a 37-year-old who gave his name only as Mr Rajan, was overheard saying to a fellow investor: "We're actually very lucky to see the director outside the office. We were always referred to his subordinates every time we came here."
The day's confrontation had its beginnings with the group's investments with Profitable Group between 2006 and 2009.

They said the terms of their investments, which they claimed promised them a certain return after six months, had not been honoured.

The 12 people claimed that their individual investments in land and lubricants with Profitable Group totalled about $700,000.

And none of them had received any returns, they claimed. They had met on an online forum where they shared their experiences.

Chris claimed he had "pumped in" the most money.
"I have invested more than $180,000... Enough is enough, I'm willing to forfeit my returns so long as the company pay me back the money I have put in," he said.

After Mr Nordmann's invitation to the group, another commotion broke out. An investor later told The New Paper that they were upset because he wanted to go up first whereas they wanted to group with him.

During the tense exchange, Mr Nordmann managed to take the lift to his office.


Musicwhiz said...

I completely agree with you on this matter.


Anonymous said...

"A simple combination of dividend paying blue chip companies, sufficient insurance and some cash for emergencies will do for most people." - LT

That's right.

And talking about guarantees, it depends on who give the guarantee. If it is the Gahmen or the local banks, still OK. I still trust them. But I don't trust projected returns especially on insurance. Hence I don't buy endowment or ILP products.

How one can trust an overseas XYZ company for tens or hundreds of thousands of dollars deposited with them is beyond my comprehension.

Mike said...

They sell it here because they cant sell it in England. Land Banking and "alternative investment" companies do spring up in England but they are nomally closed down within 1-2 years. Profitable Plots was liquidated in the UK in 2008 after investigation.

Anyway it would seem the investors are gaining teeth.

Profitable Plots investor sues to get her $31500 back

SINGAPORE - A writ of summons has been issued against Singapore-based investment firm Profitable Plots - a division of the Profitable Group - by an investor who failed to get her money back, a sum amounting to US$22,500 ($31,500).


Anonymous said...

Some of those "investors" went in with their eyes open. Greed is good, it teaches you a lesson or two. After so many of these scams, it is surprising that professionals are still falling for it.

Anonymous said...

As usual it begs the question. What is MAS and CASE doing all this while?

Several years ago LHL promises "a more open Singapore". Many assumed he meant civil liberties and human rights. Now we know what he means. More open to crooks and cons, embrace dodgy financial products. Sayonara to financial oversight and consumer protection!

Ghost said...

I seem the advertisements (anyone who watch the EPL did) before and always thought it was too good to be true. Frankly this is a matter of greed on the part of investors.

Anonymous said...

People must realise that our government only protects its own interest and not that of the people. Try questioning anything the government does and lighhening strikes..Dumb people do not realise this. Low wages, increased cost of living, transport, no consumer protection against the best paid politicians and elites and family losing billions

Anonymous said...

pap doesn't care because they are basically conning singaporeans of their hard-earned money via different vehicles.

also, anything for business, anything for gdp growth...

Anonymous said...

this is meritocracy society. people going around con people like it is legal. years ago, i bgt infinity plan from CFC but they later refused to honour and the law side them.

Anonymous said...

These angmo scammers flocked here because of lax laws and regulations against financial institutions, and the existence of loopholes that have been plugged years ago in their home countries. More importantly, Singaporeans are such cowardly pansies you could boof them several times in the ass and the best they can do is file a police report hoping the authorities would help them.

Profitable Group and other scammers are fortunate that the Malaysian authorities clamped down on them early. Its a cowboy town in Malaysia... the FT Managing directors and their families might be hurt pretty badly (ie. sent home in cardboard boxes) if they didn't return the money to the investors.

Anonymous said...


Good farmland in Saskatchewan and Manitoba cost only about C$800 per hectare.

Anonymous said...

Hi, i'm also one of the victim that has invested in the boron and their UK land. I would like to contact those groups of investors that has gone on public on this scam

ProBono said...

Action group email

Website to register

Stooge said...

MAS has come out against Land Banking
See here.

"Investing in land is not always equivalent to investing in solid ground. Some land banking schemes have turned out to be scams."

stooge said...

Sorry forgot link :-)

Monetary Authority of Singapore warning on LAnd Banking schemes


What are the key risks?

a) It could turn out be a scam
Investing in land is not always equivalent to investing in solid ground. Some land banking schemes have turned out to be scams.

Anonymous said...

I wonder the "baboo and the bald head soccer commentator' on ESPN dare to stick their neck out for this land banking company. I wonder whether did they really put in money into this investment. If they have and lost money I sympatise with them. If they have not they must be part of the con job and dare they show their face on television again.

Anonymous said...

PG is under CAD investigation now. This is reported in BT and ST this week.

Anonymous said...

Now that MAS is probing PG, will all the investors be informed on the status? I drove passed PG office and it's now closed. Very worrying.

UK investors said...

good work.

Anonymous said...

Companies like Jardin Smith and Profitable Group sells UK green belt lands, at 20-30 dollars per square feet. Walton sells at 1-2dollars per square feet, and creates several successful results already. It is risky business, and it is important to choose the right company. Actually some companies are good at selling, not good at delivering.

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