Land banking is A Scam?
This is what i extracted from papers recently. I have write a very detail on Land Banking Investment here.
UK Land International (M) Sdn Bhd,
Profitable Plots Sdn Bhd and
Edgeworth Properties (Malaysia) Sdn Bhd
*** Raided by Malaysian Government! ***
1) From Bernama-October 25, 2008 00:43 AM
Companies Commission Raids Three Companies Over Illegal Land Investments
KUALA LUMPUR, Oct 24 (Bernama) – The Companies Commission of Malaysia (SSM) today raided three companies suspected of offering investments in illegal land investment schemes.
The raids were conducted simultaneously at the UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (Malaysia) Sdn Bhd.
The companies had allegedly contravened sections 94 and 363 of the Companies Act 1965.
In a statement, SSM said it had conducted surveillance on the companies over the past couple of months.
It said the companies offered the public to purchase and invest in plots of land in foreign countries, notably England and Canada, and used attractive marketing strategies, among others, promising extremely high rate of returns.
“Any company offering investments in interest schemes must comply with Division 5, Part IV of the Companies Act and other relevant provisions of SSM’s Policy Guidlines and Requirements before they can start offering such investments to the public,” added the statement.
Non-compliance of Division 5 Part IV of the Companies Act is an offence under section 94 (1) of the Companies Act and carries a penalty of imprisonment for five years or RM100,000 fine or both whilst section 363 (5) entails a penalty of 10 years imprisonment or RM250,000 fine.
The statement advised the public to verify the status of schemes by contacting SSM at 03-40476111/6222 or fax at 03-40476317 and via e-mail to enquiry@ssm.com.my.
– Sources BERNAMA
2) Profitable land banking scheme or clever scam?
By : Tan Choe Choe , Source: NST Online -2008/11/23
KUALA LUMPUR: Some 2,000 Malaysians have invested over RM50 million in foreign land banking schemes.
The Companies Commission of Malaysia (SSM) is investigating three of these companies.
They offer plots of land in foreign countries for investment, notably in England and Canada, and promise extremely high rates of return, some as much as over 800 per cent.
SSM raided the offices of the three companies on Oct 24 after months of surveillance and seized “relevant assets including ICT equipment and documents” to assist in its investigations.
“We decided to take action against these companies because of recent developments in Britain.
“One of these three companies’ parent company is facing winding-up action by the British authorities,” said SSM deputy chief executive Rokiah Md Noor.
“We are concerned about the interests of their investors here, as well as investors who have put money into similar companies offering land banking schemes.”
Land banking companies buy up land in areas which have not yet been granted planning permission and subdivide them for sale, according to the Financial Services Authority in Britain.
These plots may be located in greenfield or greenbelt zones.
(Greenfield refers to previously undeveloped land, in a city or rural area, which is currently used for agriculture, landscape design, or just left to nature. Greenbelt is a designation used in land use planning to retain areas of largely undeveloped, wild, or agricultural land surrounding or neighbouring urban areas.)
On its website, FSA said the operators of these schemes offer to handle the planning permission application process for the plot-owners.
“They claim that once owners are granted planning permission they can sell the whole site to a developer for a substantial profit.”
In June, FSA asked the British High Court to wind up the country’s largest land banking company, UKLI Limited, for operating as an illegal collective investment scheme and denying its investors protection for their money.
In its press release, FSA said over 4,500 investors had paid some STG69 million (RM385 million) to buy the land, but none of the land sold was ever granted planning permission.
UKLI’s business was deemed illegal because it operated as a collective investment scheme and should have been authorised by FSA.
“The lack of authorisation means investors are not entitled to make a complaint to the financial ombudsman service or claim compensation from the financial services compensation scheme,” it said in the release.
FSA has been granted an interim freezing and restraining order against UKLI to protect its assets for creditors, including investors, and to prevent it from continuing to operate as an illegal collective investment scheme.
FSA does not regulate land as an investment, but collective investment schemes, including those concerning land, are subject to regulation.
Similarly, land transactions per se are not under the purview of SSM. But, the investment deals offered by land banking companies are structured like an interest scheme, and as such come under SSM’s purview.
Potential investors as well as current investors can contact SSM at 03-40476111/6222 or email enquiry@ssm.com.my to verify the status of schemes that they are interested in.
***********************************************
Final advice: Caveat Emptor - Buyer Beware
Related posts:
- Land Banking: Secret Recipes to Wealth?
- Land Banking-Central Bank of Malaysia Raids Walton International Property Group (M) Sdn Bhd!
- Beware Of Illegal Foreign Currency Trading Schemes| Warning from Bank Negara Malaysia
- Beware of Phishing Scam
Can I point out that the second article is wrong. Both of the companies offering UK land are closed down in the UK. The third one is Canadian !
Wrong?
All the companies mention above are extracted from Newspaper!
Very interesting read
Fortuna Estates: Busted by Spanish Police for Land Fraud
http://news.kyero.com/2008/12/10/fortuna-estates-busted-by-spanish-police-for-land-fraud
Land banking, in particular Fortuna is all a con. See the background on previous scams run by the Fortuna owners at investmentpropertyrumours.blogspot.com/2008/12/fortuna-land-and-oanna-group-how-it-all.html
always practice: Caveat Emptor - Buyer Beware
[...] This raid operation DO NOT comes in as a surprise because other Land Banking like UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (Malaysia) Sdn Bhd was raided on 24 October 2008. Read more HERE [...]
http://www.guardian.co. uk/football/2009/jun/12/mike-ashley-newcastle-united-singapore-profitable
As Mike Ashley considers how Singapore’s Profitable Group will seek to turn a profit from investing £100m in Newcastle United and turning it into a fans’ trust, investors are wondering where is the upside in other Profitable interests.
Among those interests is “Profitable Plots … a strategic land investment company”. This offers the chance to buy land such as at Cherry Tree Grove in Colchester which, once planning permission is received, will instantly increase in value.
But how to reconcile those promises with two separate local authority refusals of plans to build a 77-bed and then 87-bed hotel at Cherry Tree Grove on the grounds that it is too far out of town and in a Countryside Conservation Area? One respondent during the planning application process thinks he knows the answer. “These companies purchase protected land and then make proposals for development. They then resell the land to investors at 10 times or more profit in Asia and Canada, giving the impression that planning permission will be achieved,” the respondent wrote to planners.
Not so, says Profitable’s Canadian client services manager, Dan Strumos. “These accusations are false. Our headquarters are in Singapore and that would be the last place on earth for corporate shenanigans because the penalty for it is death.”
But could Profitable Group by any chance be a new incarnation of The Profitable Plot Company that was the subject of a 2007 application for compulsory winding-up by the then secretary of state for trade and industry, only voluntarily to appoint a liquidator six months later? The very same! Tim Goldring, Nigel Blanchard and Neil Osborn were directors of that firm and all are now listed on the Singapore firm’s website.
Alan
What is a compound notice ?
http://www.bernama. com/bernama/v5/newsbusiness.php?id=419129
SSM Issues Compound Notices To Three Companies
KUALA LUMPUR, June 19 (Bernama) — The Companies Commission of Malaysia (SSM - Suruhanjaya Syarikat Malaysia) has issued compound notices to Profitable Plots Sdn Bhd, Edgeworth Properties (M) Sdn Bhd and UK Land International (M) Sdn Bhd for contravening section 91(1) of the Companies Act 1965.
According to SSM section 91(1) of the act, a person shall not issue or offer to the public for subscription or purchase any interest unless at the time of the issue of the interest there is in force an approved deed.
The three companies were raided on Oct 24 last year following queries received from members of the public that the companies were offering illegal investment schemes to members of the public, SSM said in a statement here today.
The raids were conducted simultaneously in the respective offices located here and assets such as information, communication and technology (ICT) equipment and documents of the companies were seized to assist the commission in its investigations.
hi Briony,
I am not sure what is exactly the compound notice.
May other can provide some insight.
Cheers
Hi Alan,
I think its important to distinguish between UK Land and Canadian Land, many UK land Banking companies are selling Greenbelt, which is highly unlikely to get re-zoning, hence no exit after you buy it. Not so for Canada.
Land Banking companies make all their money upfront, so they have little vested interest in seeing you exit early.
Edgeworth in Canada is a Development company and wants to buy back their land for further development into condos and houses.
It takes about 3 to 4 years in Canada to get sub-division approvals (re-zoning), before they can begin construction. The program to sell the land initially to investors is so that they can get liquidity to continue growing the company, and not have their funds stuck for 4 yrs.
The security for the investors is ownership of freehold land title deed. And in exchange for leveraging on the investors waiting time, Edgeworth buys back the land at a higher price, giving investors a good return.
“Compound Notices” simply means a fine has been charged for non-compliance. Apparently something to do with not having a prospectus.
Edgeworth didn’t have a prospectus because the transaction is for physical hard property, they are not selling an investment fund. But because of the collective nature of ownership in the land, it fell into a grey area open to debate, and the Msian authorities has no clear regulation on this type of program.
rgds
Alvin
This was extracted from Bernama recently:
Saturday, July 11, 2009
BERNAMA.COM
Edgeworth Properties Cleared By SSM, Resumes Operations
By Massita Ahmad
KUALA LUMPUR, July 10 (Bernama) — Edgeworth Properties (Malaysia) Sdn Bhd (EPM), a fully owned subsidiary of a Canadian-based real estate development and investment company, has resumed its operations here.
On Monday, the company was given clearance by the Companies Commission of Malaysia (SSM) for its business here following a six-month investigation into its operations.
“We were clearly being observed for any irregularity in procedures and was subsequently told to comply under Section 91 of the Companies Act 1965,” EPM’s country manager, Lee Kim Haw, told Bernama on Thursday.
“We cooperated with SSM in seeing the company through this regulatory procedure exercised for our land purchase programmes and will continue to operate with full compliance of the laws of this country,” he said.
The company was investigated by the commission for a regulatory procedure, which caused EPM more than six months of disruption in its local operations.
In October last year, EPM and two other companies were raided by SSM on being suspected of offering investments in illegal investment schemes involving land in England and Canada.
EPM’s holding company, Edgeworth Properties Inc (EPI) is present in three Canadian provinces with a total of six offices and also has subsidiary companies in Malaysia, Singapore, Philippines and Taiwan.
EPI theatre of operations is in Western Canada, with the majority of its development projects in the resource- and oil-rich province of Alberta.
Lee said SSM has issued a letter clearing EPM from any business suspicion and had duly inspected the title deeds given to investor-members of EPI.
“We are only too pleased that this is all behind us now and that SSM has been very forthcoming in giving us a clean bill of health.
“SSM’s endorsement has enabled us to re-earn our credibility and financial standing,” said Lee.
On the group’s activity, Lee said EPI acquires developable land, turns them into housing estates (typically 150-500 acres) and then markets the developed housing lots to Canadian homebuyers.
It also builds condominiums for sale to the Canadian public.
EPI acquires and develops land within the cities and towns of Alberta that are experiencing economic and population growth driven by the resources industry, primarily the oil and oil sands industry.
The EPI Group includes its construction company called Sonex Corporation which has more than CAN$60 million of construction equipment.
It also has under its wings, an investment corporation called Edgeworth Mortgage Investment Corporation (EMIC).
The EMIC is a registered investment vehicle approved by the Alberta Government to receive pension funds for investment with fixed interest returns.
EPI also engages in extensive geo-technical and geo-graphical surveys that ensure a project land is developable and is in the path of urban growth before it acquires it for its land bank.
Here in Asia, Lee said, the acquired project land is offered as smaller units called Undivided Interest or UDI.
A UDI is a unit share of the project land and is accompanied by a title deed.
Savvy purchasers may buy one or multiple units of UDI and they will in turn, receive title deeds which entitle them to a share of the land.
EPI will later purchase the land back from these individual purchasers for its own development plans.
When EPI buys back the land from these individual purchasers, it does so at a fixed schedule of returns (stipulated in the sales agreements) corresponding to the length of time the land is held by the purchaser.
The longer the purchaser holds the land, the higher the returns, typically between 60 percent and 100 percent of the original purchase price, Lee explained.
EPM has been marketing UDI products in Malaysia since 2007, along with the other Asian offices.
To date, EPI Group has garnered more than 60 million Canadian dollars in UDI sales in Asia with over 5,000 clients, Lee said.
The group’s entire real estate development business is valued in excess of 200 million Canadian dollars.
Lee said EPI will continue to expand its operations with new products and offices and that it was on track to reach a revenue of 500 million Canadian dollars million within the next three years.
– BERNAMA
Hi Alan,
Has EPI Group Exited in any of their projects so far?
IF not, forget about it and look for alternative source that has proven track records in Delivery.
Tango,
I’m not sure.
Maybe other can chip in some inputs
Hi Alan,
Found this worth sharing!
Edgeworth & Landbanking
Sunday Times, 7 September 2008 reported: “Landbanking can be profitable, but it is not a short-term investment and buyers need to do their homework first”
Sounds familiar, but how many Singaporeans really do that? Most of the time, they succumb to greed and the eagerness to show how savvy they are in investing and try to impress sales people how rich they are. When things go wrong or are not up to their expectations, they cry foul and complain that the government is not protecting them from such investments.
So now, landbanking in the investment flavor of the year with 10 firms selling foreign raw land here. After getting burnt by timeshare and other exotic unregulated investments, they are ready to tackle more non-traditional investments like land banking. The big crowd turnouts at landbanking seminars, many of whom are prepared to plonk down S$10,000 and above for land they have never seen or even heard of before the sales presentations is truly amazing. The success of Walton has attracted other landbanking companies to Singapore like Edgeworth. The herd instincts of crowds never ceases to amaze me.
In the article, Straits Times covered Edgeworth’s current project in Alberta, Canada which required a minimum investment of C$12,900 (S$17,500). This quote is attributed to a reportedly successful landbank investor who claimed: “Edgeworth also offers insurance and fixed returns and is involved in the development process unlike others like Walton where investors have to wait for third-party offers and depend on market sentiments”. Edgeworth says that with its insurance plan, the initial investment sum will be returned within 5 years if the investor wishes to exit. This insurance plan takes effect only when the title deed is issued (some 9 months after the sales and purchased agreement has been signed). Edgeworth has a development arm, Sonex Construction
.
For those of you who don’t know what land banking is ….. land banking is nothing to do with lending money to the banks for big profits. It is not even about property investment. It is investing in raw land which hopefully, one day, some time in the future, most probably 10 years or more will be valuable if it is located in a place which may be in demand in the future due to economic or population needs. The land bank you buy is not in a small country like Singapore which may run out of land for development purposes. It assumes that there is no local URA counterpart which can recycle existing land / cities for urban renewal. It assumes that people are willing to commute long distances from their work places. It assumes that people don’t like to live in big, cosmopolitan cities. It assumes that property prices always goes up (just look at the Sub-Prime mess and its effect on property prices and other economic activity). It assumes a lot of other things.
Some of the things landbank investors have to consider before committing themselves financially are:
Illiquid - Investors cannot turn a landbank into cash like stocks and shares and even a property in Singapore. If you put your landbank up for sale, you will have to fork out an administration fee and broking charge of at least 15% of the resale price.
No “Sure-Win” - There is no guarantee you will make money or even get your money back. Everything is dependent on government approval and developers’ interest in developing the land.
Uncertainty and Potentially Long Holding Periods - Projects can take 10 years or more to exit, assuming it is an attractive property to would-be investors.
High Tax Rate - Such landbank projects are subject to a high tax rate in the respective countries. In Canada, the capital gains tax is as high as 40%.
Forex Risk - If the SG dollar goes up relative to the North American currencies, your profits will be less than expected.
If you plan to invest in a landbank, be extra careful and check these out throughly:
Firm’s Reputation - Don’t buy if you have doubts about the company delivering on its promises. As my rich uncle used to say: “Check to see if anything can go wrong with the deal. If something can go wrong, it will”
Land’s Location - Apply the same principles as buying a property. It is not what you like that counts, but what value other people (buyers) see in the property.
Economic Conditions - Timing (and luck) determines how fast you can get back your money.
Track Record - How long did it take for previous investors to exit from the investment. Such statistics may be hyped up.
Exit Strategies - Landbanks work exactly like enbloc sales. If someone does not agree to sell, everybody will have to wait for a better offer - which may never come.
The most important thing is there has never been any audited reports on how much money people have made in landbanking.
For those wise cats still sitting on the sidelines, read the following post on landbanking in UK on tankinlian.blogspot.com
Is LandBanking a Scam?
My frank opinion:-
First and foremost some Land Bankers will buy the land at a steal and then sell at very very high price to their investors and to make believe, they will hold 10 to 15% of the plot of land (no transparency, only statement in some of their brochures) with investors and hoping for a Developer to come by to make an offer.
So remember NO DEVELOPER means NO EXIT…….then what happens?
You carry the baby whilst they, the Land Bankers having the best laugh!
Saying landbanking is a scam is too unjustified… much like do you say Lehman Bro is a scam bank just because it failed.. ?
There are genuine cases of folks making $$ in landbanking but also a whole bunch of others still waiting and perhaps a few other who lost $$ as they have no holding power.
Each investor just have to do his/her sums and due diligence in every investment.. if you don’t, the sales agent will and at your expense.. There is no such thing as brainless investment..and even if there is, so is the returns. (Eg. put your money in the bank)
Sadly, most people are sold into misrepresentation as landbanking, though proven, has quite a fair bit of complexity and risks, which is not what an average sales Jane or Joe can explain. That’s why you find the same sales pitch…bragging on the past performance, track records, company reputation, prestigious office etc.. except specific things on the land..
Effectively, when you invest, the company transfers ALL the risks to you so it doesn’t matter whether there is something they “think” they know that others or the government don’t..
Guarantee buy-back is only as good as the guarantor itself..and is usually doesn’t mean anything unless it’s collateralized or back up by third party.
For those who are “smoked” into it, make sure you get your land title, your only security, as fast as tomorrow..as your risks jumps two-fold every single day..
Some Landing banking pays handsomely to the early birds with luck….. so we cannot associate them as scams but lately many Dubious LandBanking companies are just building your confidence to con you with their so called forward looking statement or NONE at all.
Always read the Disclaimer/s and exercise Due Diligence.
Quotations found in some LanBanking Brochures:- which I magnified the fine prints for awareness.
*** “Investors are warned in very very fine prints that sometimes even our naked eyes cannot be relied to read the fine prints, so you need a magnifying glass to read what is printed in some brochures eg.”
Company A that is responsible says:
———————————–
** This material is intended for illustrations only and is not intended as a guarantee or representation regarding the timing of sale or development of the property referred to or the returns attainable by a land owner regarding the timing of sale or development of the properties.
This material is based on a number of assumption, which involves known and unknown RISKS.
Uncertainities and other factors that may cause actual results or events to differ materially from the results set out in the above material.
The purchase is speculative.
All purchasers are advised to consult with specific reference to the risk factors inherent in an investment of this type.
Company B :
———–
Current performance is NOT a guarantee of Future performace.
This brochure is NOT considered as a Securities offering.
As with any type of Investment, land investment has some inherent risks. We do NOT guarantee or promise any rate of return.
Pls. consult your Advisor regarding the suitability of this type of land ownership within your portfolio. Distance & Time based on overall average.
Agreed with The Educator,
Even established LandBanking companies will always warn investors in fine prints, so take the clue from there and invest with gut feelings or none at all.
therefore if the landbanking companies have all these disclaimer to protect themselves, that leaves the agents who are selling to do the representation.
sadly, most of these agents are NOT selling professionally like the licensed financial advisers…
If something goes wrong, the companies can flash their disclaimer..and when everyone looks for the agent, he or she would have disappeared long ago after making the quick bucks… that leaves the investors in a shit..
Sadly this is how the whole business goes.. while landbanking is considered real estate, i think the authority should regulate the sales process.. i would be glad that in the future, only licensed FA can market landbanking..
If only the LandBanking Agents were to present the Disclaimer after every sales presentation/s the potential investor will definitely shun landbanking for sure or to digest and understand what is being said.
So the moral of the story, is to have it printed in fine prints or have it as their shield.
Invest wisely with care! ………….read the fine prints and consult a lawyer if in doubt.
hi The Educator,
The Land Banking presentation that I attended never even mention about the so called “Disclaimer”.
It only highlight the “Good” thing about Land Banking. This is very common in any sales talk.
I totally agree that Land banking Investment is not for any Tom Dick & Harry & Land Banking sales should be Regulated(only licensed FA can market landbanking)
Try an ask for a Disclaimer to a Sales Agent next time and question them about the company’s Disclaimer. Test their wits and probably some of them also have not seen or heard and they can be in a fix.
One one good way to brush them off, is to relate what is stated in the Disclaimer if you are not comfortable.
To be frank with you, NOT all Land Banking are scams! you have to weed out the good from the bad and know the difference.
Firstly, if I were an overseas investor and say investing in a LandBanking company in Canada, I will be comfortable as I know that 70 - 80% are Canadians.
Unlike in UK, some unscrupulous Agents prey on overseas clients.
I believe that many UK residents are mostly aware at boards.fool.co.uk/Message.asp?mid=11342254&sort=postdate
So be comfortable on where you are investing!.
Generally, landbanking has a certain level of complexity and as an investment, there are certain risks NOT an average sales Jane and Joe is able to explain.. so i observed this is their usual sales pitch:
a. brag about the company track records….not knowing that in the regulated insurance/investment industry, that is the most unprofessional way to sell..
..or worse… “hint” or give the impression that the return would be “close to” the track records…
b. brag about the company reputation, office location etc..
c. cite certain general statistics and paint a “beautiful” picture
d. play on emotions…
..and everything EXCEPT facts about the piece of land they are selling..
in short, i would say most if not all misrepresent.
Therefore, chances of making a profit these days are slim, compared to a few years ago..
no_more_land,
The landbanking company should quote “Past Performance is NO guarantee of future BIG gains” mostly to double your money at most!
Reason: “MONEY NO ENOUGH!” movie by Jack Neo.
Anyway to sum it all “CAVEAT EMPTOR” should be right word used!
toyland,
the landbanking company has this disclaimer somewhere to protect themselves.. the problem is the sales agents keep bragging about the past performance most of the time… easy way to sell mah… talk ONLY the good things and things clients like to hear.. make the good comm and disappear later..
when things don’t work out, clients discovered that the agents have disappeared long ago.. go to company, company point them to disclaimer..
“CAVEAT EMPTOR” OR BUYERS BEWARE!!!…………..Suckers are born everyday and 2 on a Sunday!
Suggest you ask them for Disclaimer and use it as a weapon to fleece them away!………sure works!!!
Remember Disclaimer doesn’t guarantee anything except to protect Company’s ASSSES if any!
Be careful of companies that offer multiple investments as the saying “Jack of all trades, Master of none”
The advantage of investing with reputable LandBanking company, is you UDI or Un-Divided Interest is mostly protected with “Title Deed” and are legally binding unlike buying and investing say land in remote Malaysian territory that will surely encourage squatters along the way and this will have problems disposing off your land or for own development…………over long period of time squatter will demand compensation etc. (headache)
Landmines,
I’d say it’s not about the company that offers one or multiple products but rather the salespeople as they are the ones that sell the company and the products..
Do the salespeople know what they are selling ? I would say based on the last 5 years of studying this industry most are attracted by the high comm..
The situation you mentioned regarding land in Malaysia is just one of the complexity in landbanking that an average Joe or Jane MAY NOT be aware or be able to explain.
In short, landbanking IS NOT for an average man on the street.
no_more_land,
There are some land banking companies that sell land/development projects/oil & gas and who know what???
Surely the Sales Agents are well paid and if you pay them peanuts, they will probably expose and make landbanking more to be scams. Just look at MLM the biggest scams alive!
The Truth about LandBanking!
LandBanking can be a good alternative form of investing into Real Estate.
I personally have invested into Land Banking after doing my homework and due diligence.However, before you invest, make sure you do your homework and avoid investing into possible Land Banking Scams.
You need to acquire the Financial Literacy to differentiate a Real Deal from a Sham.
Let me give you some examples.
For instance, a foreigner CANNOT own land in India and/or China and even Singapore.
Thus, if someone try to sell you some land in these 2 countries, make sure you don’t invest, it is likely to be a scam.
Canada allows foreigners to invest in land though. You can check and verify this yourself.
Truthfully speaking I made money….
In which country??? ……….Off Course CANADA!
So those who did NOT invest at the right time, make stupid & silly comments that “LandBanking is a Scam” Probably they got scammed unless you do your Due Diligence with some LUCK!!!
Even Singapore does NOT allow a foreigner to invest in land.if someone approach you to invest in Land in UK, but the land is in “Green Belt” (land reserved for nature and NOT for any building or construction), please don’t invest also for obvious reasons.
However, what shocks me is that there are people in Singapore selling land too.
But also be careful of Canada & US Greenbelt Belts like in UK too.
Land Banking Companies
Why the majority of them are (legal) scams
The sad truth is the plots of UK land sold by Land Banking firms have about a 1% chance of receiving planning permission over the next 20+ years. Although of course the land banking firm will give the impression that planning permission will soon be granted.
Land banking companies started appearing around the year 2000 and most if not all of these firms follow a similar business plan -
For some reason the land banking companies have aggressively targeted the Asian community (in the UK).
There are also many reports of land banking firms targeting investors in the Far East (specifically Malaysia) and the Middle East, (specifically Dubai). I would think they’re trying to sell UK land plots to a combination of UK expats and foreign nationals
—————————–
Now what did the nice land banking salesperson tell you ? That means you have a 99%+ chance of owning a piece of land that is almost completely worthless.
You have a 2.5 times better chance of winning if you put all your money on a single roulette number in Las Vegas. They will also give 35 times payout not the two to three times offered by the land banking companies.
Steve F
Totally agreed with your point of view! Take my advice as NOT to engage with any land sales in the UK. Chances are 99.9% of getting Scammed! The abbreviation UK stands for “U Kena” local jargon for “got whacked” or “Scammed”
Trust me, only Canada is PRO-LandBanking haven, no idea about the US or others……….perhaps there are potentials too.! left to be seen in the near future.
Interesting, just attended a land banking talk from UK … about 50,000 to 80,000 one time investment. They will take 7% upon withdrawal. The food was great and even gave us RM80 shopping voucher despite I didn’t join them.
I haven’t checked if they scam but definitely a HIGH risk vehicle …
appreciate if mtsen can name us the company?
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.
A marketing campaign fronted by Bryan Robson, the former England captain, and Steve McMahon promised a 250 per cent return in three years if a gravel pit near Heathrow airport was developed for housing and leisure.
However, the site is on green belt land where housing development is banned.
While Profitable Group, the Singapore-based property company behind the scheme, has made at least £47 million from the deal, nothing has yet materialised at the site – not even a planning application to build a single house.
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.
Profitable changed the name of the tract of land from Lower Feltham Lakes to Concorde Village for the purposes of the marketing drive.
But no development can take place unless a planning inspector can be persuaded to overrule the site’s green belt status against the wishes of Hounslow council, the local planning authority, which firmly opposes building there.
A spokesman for the council said: “We would only develop green belt land if there were very special reasons. We see no special reasons for doing so on this site.”
Profitable, of which Mr McMahon is commercial director, has bought four sites in Britain for a few million pounds and divided them into thousands of tiny plots which have been offered to investors, bringing in tens of millions for the company.
The Feltham site was bought from Taylor Woodrow (now Taylor Wimpey) for £3.2 million, then resold in small plots at £8,000 to £13,000 each to overseas investors, a practice known as “landbanking”.
The sales raised something between £50 million and £55 million. Investors will realise the cash when and if the land is redeveloped.
To try to develop the Feltham site, the company has now brought in two British lobbying and consulting firms to market the scheme and draw up plans for the development.
Chelgate, a Westminster lobbying company, has sought to counter the council’s opposition by devising a public consultation procedure, including the staging of an exhibition with five different ideas to develop the site for housing and leisure, to which 5,500 households were invited.
Chelgate’s deputy chairman is Nick Wood-Dow, an adviser to David Cameron and deputy chairman of the Conservative party’s environment council.
The other company working for Profitable is DLP Planning in Sheffield, which is seeking to make changes to a London-wide land-use plan in a move that would increase Hounslow’s housing target, forcing the borough to accept more new homes within its borders. However, the final plan will not be drawn up until 2012.
Mr Robson told The Sunday Telegraph: “I was paid to do a commercial TV advert to be shown on Singapore TV five years ago for Profitable Plots.
“I have not done anything for them since and I was unaware of any controversy over development of the land.”
Profitable declined to take questions and instead asked Chelgate and DLP Planning to reply on its behalf. Chelgate confirmed that a television campaign featuring the footballers had been used to promote the deal. The advertisement is still on Profitable’s website.
A Chelgate spokesman said: “Circulation of a TV advertisement showing land at Feltham… as offering an estimated return of 250 per cent in three years, was aired for a short period in 2006… such advertising has long since been withdrawn. Investments have been sold on a minimum 7 to 10-year horizon.”
Chelgate also said the company would repay anybody who wanted to drop out of the scheme. Its spokesman added: “No investors in the Lower Feltham land have exercised their right to sell.”
fr:telegraph.co.uk/property/propertynews/7436428/Green-Belt-housing-scheme-promoted-by-footballers-leaves-investors-in-the-red.html