NZ court throws out property related claim by three S'poreans

[investor101]

Years ago, a local politician knowingly or unknowingly, gave the green light for dubious business investment deals to proceed in Singapore.

Many Singaporean investors lost money in the minibonds and some structured investment instruments ('instruments' makes the deal sound very nice). Many Singaporeans wanted justice. They wanted to get their money back from these dubious investment schemes, many of which were misrepresented to them.

The politician simply said that these aggrieved investors went in with their eyes open and therefore should accept that the investments could sour, and brushed them aside. And because of his high stature, when he brushed them aside, the junior politicians followed his cue and distanced themselves from this whole incident too. In the end, it was a non-politician who stepped in and tried to help the people. In HK, for the same product, the banks did not fight and compensated people for their loss in this dubious product.

The total amount involved was not a small sum to the banks. They could have easily put this matter right. But they rather use the money to hire lawyers and fight, and rather pay out that same money as bonuses to their own executives for 'good performances'.

Since then, I realized something. Singapore is a place where dubious investment plans can be sold, you lose money, it is often deemed as your own fault, because 'you went in with your eyes opened'. After that, I never invested in any single investment plan offered in Singapore again - be it land banking, time share companies, gold shares, investment in Brazil social housing property, or whatever bank notes that offer interest. I rather buy shares or property directly, and deal with the risk myself.

You find that too often, when you found that you invested in a lemon investment instrument, you really don't have much legal recourse, especially when the company has much more resources to engage a lawyer and fight a lengthy legal battle with you.

[Temperament]

... you should engage a lawyer to represent you first in all property transactions.

You raised a very good point. Unfortunately, most buyers in such cases got sold by the "freebie" when the counterparty said that legal costs are absorbed by the later party. Without the explicit business relationship, there is no duty of care by the lawyer to the buyer. The scope of responsibility of the lawyer is also not determined by the buyer.

Buyers should never be impressed by brand names of lawyers/bankers representing the counterparty. Sometimes, these professionals are hired by counterparty on hourly rates to give general legal information or draft documents. They do not act as trustees or guarantors.

The windfall of "all legal costs absorbed" is in effect a trojan horse.

Yes ! i agree. We (included me) are always looking for a free lunch. That's where the problem lies. There is really no free lunch in this world

[fat al]

Since then, I realized something. Singapore is a place where dubious investment plans can be sold, you lose money, it is often deemed as your own fault, because 'you went in with your eyes opened'. After that, I never invested in any single investment plan offered in Singapore again - be it land banking, time share companies, gold shares, investment in Brazil social housing property, or whatever bank notes that offer interest. I rather buy shares or property directly, and deal with the risk myself.

Agreed with you that it is better to stick to shares and property directly. The market is regulated and every transaction is cleared by independent parties including some government/regulatory bodies.

It is not that the local government does not care. Most MAS investor alert watchlists are usually ignored. Police and CAD can only investigate until a complaint has been registered. Proscecution and direct intervention by authorities can only take place until some evidence of malfeasance can be collected for court procedures. In other words, action can (or potentially can) be taken only after problems surfaced. No legal structure is perfect and these are just parameters we need to adapt to.

[Temperament]

Since then, I realized something. Singapore is a place where dubious investment plans can be sold, you lose money, it is often deemed as your own fault, because 'you went in with your eyes opened'. After that, I never invested in any single investment plan offered in Singapore again - be it land banking, time share companies, gold shares, investment in Brazil social housing property, or whatever bank notes that offer interest. I rather buy shares or property directly, and deal with the risk myself.

Agreed with you that it is better to stick to shares and property directly. The market is regulated and every transaction is cleared by independent parties including some government/regulatory bodies.

It is not that the local government does not care. Most MAS investor alert watchlists are usually ignored. Police and CAD can only investigate until a complaint has been registered. Proscecution and direct intervention by authorities can only take place until some evidence of malfeasance can be collected for court procedures. In other words, action can (or potentially can) be taken only after problems surfaced. No legal structure is perfect and these are just parameters we need to adapt to.

i agreed. In short, always try to use your first defence which everyone of us should have - commonsense before we proceed further.

[Big Toe]

Reminds me of the movie, The wolf on wall street.
There will be many people out there trying to earn a quick buck whether legally or illegally.
Illegal ones are easier to identify.
The best cheats are those that are legal and the victims are willing victims.
This happens when a very powerful company/organization has total control/monopoly over something.

[pianist]

in this case, it was mentioned that the key persons in the 2 NZ companies/developers are un-discharged bankrupts. my next question, can an un-discharged bankrupt continues to run a active legitimate business entity in NZ?

i think authority here maybe hdb/sla/ura should educate/make locals here aware of various avenues to perform searches on overseas company as well as on the company's key persons as to whether they are bankrupt or convicted of lawsuits/crimes.

such search is not expensive, the problem is it may not be easily accessible to a local person and usually engaging a 'process agent' for a small fee would solve this important risk & governmental/corporate bodies will have.

next question - regarding the trust account, why did the news say the law firm acted only for the developers? I thought in a trust/escrow account, there should be a trust deed or some execution agreement to be signed by/will protect rights of impacted parties including the developers as well as the individual buyers in this case.

& more importantly and I think is a failure on the part of the news agency, they failed to mention about the local property marketing agency. I would expect the local marketing agent to do some sort of basic due diligence/background check before bringing this project to sell in Singapore. the arrows shot by the 3 singaporeans should also aim at this local marketing agent, higher chance of success in their claim also.

just a simple parallel analogy - if local/HK banks as marketing agent for toxi mini-bonds originated overseas can be sued or asked to compensate retail investors for misselling, I dun see why there is no similar treatment/enforcement on this property marketing agency selling/distributing toxic NZ property product.

[corydorus]

There's alway lamb to be slaughtered and someone or adventurest ones will get hit first. Just avoid NZ as a lesson learn to the rest since there can be such loop hole open for abuse.

[pianist]

Singapore's central bank on Wednesday warned citizens of the risks attached to buying properties overseas, after data showed a surge in Singaporeans' investment in real estate abroad.

The Monetary Authority of Singapore (MAS) said local real estate agencies had handled overseas property deals worth Sg$2 billion ($1.6 billion) last year -- a 43 percent rise since 2012.

"MAS would like to remind potential investors to be mindful of various risks associated with overseas property purchases," the central bank said, citing foreign exchange and interest rate risks as examples, along with less stringent rules governing foreign property developers.

"Risks are more difficult to assess or manage when investors are unfamiliar with conditions in overseas markets, such as the prospects for oversupply of properties, or of a deterioration in economic conditions," it added.

MAS said it was closely monitoring overseas purchases "with a view to ensuring financial stability as well as financial prudence among Singaporeans".

Advertisements for overseas properties -- particularly in Britain, Australia and New Zealand -- are a common sight in Singapore, one of the world's wealthiest countries, with an average per capita income of $55,183 in 2013.

But the city-state of 5.4 million people is also the most expensive place to buy a luxury home in Asia after Hong Kong, property firm Knight Frank said in a report in March.

Singapore last year imposed new measures to cool the red-hot local property market, including raising stamp duty -- which made it costlier for foreigners to buy property -- and sharply increasing minimum cash downpayments for buyers applying for loans for second homes.

These were in addition to earlier measures to tame the property market, including a move by the central bank in 2012 to impose a maximum tenure of 35 years for new housing loans.