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

bernama

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

NST

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

72 Responses to “Land banking is A Scam?”

  1. Hi, would like to know if I purchase a unit of land banking that comes with a title insurance, does it make any difference?

  2. Insurance?

    To protect what? Protect your potential return?

    Who pay for the premium?

    If Land banking co pay for the premium, ask yourself WHY?

    Do Read the fine print

  3. I don’t believe in anything that guarantees profit.

    It is a title insurance. Based on the insurance websites, it covers- search and survey irregularities, claims which may lead to the removal of pre-existing structures such as outbuildings, extensions, garages etc., a claim that arises due to fraud, forgery or duress, problems relating to rights of-way, pedestrian or car access etc., etc. The insurance company cover pre-existing but undiscovered risks. Just to cut it short.

    This is based on all the comments made that land banking is a scam with some remarks saying the land does not exist. Would like to know if it helps whether or not the company pays or we pay for it.

  4. Yes i agree with alan…read the fine print

    the title insurance just cover you against disputes in ownership… nothing on your potential profits..or even if your land can or cannot be developed..like the folks who bought UK land that is classified as greenbelt..

    i am not even sure even in disputes, you can claim the your entire investment…

    Generally landbanking concept is not a scam… It’s the unscrupulous people running this business that gives it a bad name…very much like there are always black sheeps in every business and trade..

  5. We have to give the benefit of the doubt whether Insurance/Assurance and invest in bona fide companies.

    BTW there are genuine bona fide companies up there and Black sheeps everywhere!

    It is a pity that the very name “LandBanking” being tarnished.
    Some LandBanking companies also disassociate with it and call themselves Pre-Development Banking………….First thing first, note the difference.

    Pre-Development Banking can be lucrative in many ways, and so far as to what I have seen sbout the many negative comments, put it simply ” One man’s meat is another man’s poison”

  6. 1. No investment guarantees you with profit. There is always a risk element. What we want to avoid is land scam.
    2. I have heard of land banking problems arise in UK. eg. Profitable Plot and Profitable Group. Capital Land International etc.
    3. What about Walton Group International from Canada? They seem to be doing very well for over 30 years. Any bad experience of cheating or bad investment? Any comment is welcome.

  7. Walton is built on solid grounds. They are the market leaders in previously called
    ‘LandBanking’ but now rebrand themselves as Pre-Development Banking.
    Todate if I am not wrong, they have up to 41 Project Exits mostly in Calgary / Edmonton in the Province of Alberta, Canada.

    They are what I call, the longest survival Bona Fide company that I know as compared to dodgy companies that are mentioned often in most Blogs.

    So don’t be mistaken that all LandBanking companies are scams.
    Know the difference between LandBanking and PreDevelopment Banking.
    Those investors who bank on the wrong company and got burnt should call themselves – “BankBalls”

  8. Pre development means what ? I’m seeing “pre” used in a lot of scams lately because it seems to suggest something is just about to happen. I am in the pre-dating stage with Michelle Chia . In this case “pre” means unfortunately absolutely nothing going on and never going to happen. The same is true of most land in pre-development or pre-approval stage.

  9. Have you heard of PRE-University?……………It is a step or preparation for admission into a full fledge University.

    So the meaning of “PRE” is always forward looking prior to the real thing!

    Now in terms of Pre Development Banking this site will explain better:

    southbendon.com/pages/A-closer-look-at-predevelopment-in-action.cfm

  10. Got this request from En.Salleh. I’m removing his comment.

    ——————–

    Dear Alan

    Kindly remove my comment that I made on June 14, 2010. It is against my company policy, Walton International, as employee to post any comment whether positive or negative on any blog with regard to landbanking and Walton International unless authorized.

    Thank you in advance

    Salleh

  11. Thanks Salleh, get down to understand what you are getting into before you post…and before you sell… There’s a lot out there to pick up..

    Most landbanking salesperson don know what they are selling. Therefore the easy way out is to sell company track records…

    Joe P is right.. Pre-development landbanking is just another marketing hype employed to make salespeople excited, clients confused and the company having the last laugh.. A piece of land next to a development and another one 10 miles away are both pre-development land.

    however i must justify that ONLY canadian landbanking is proven. I have enough literature and research info to conclude that everyone should stay away from UK landbanking..

  12. Hi no_more_land,

    I totally agree with you that Canada landbank/predevelopment landbanking delivers and not UK.

    Most land scams are originating from the UK typical site says it all propertyscam.org.uk

  13. The best thing in any investments, is to diversify:
    Sick of LandBanking or Predevelopment Landbanking?

    In the midst of all this chaos and doubts etc, then check this : cashflowing real estate redevgroup.com/ !!!

  14. Just sharing my experience as an investor

    I invested in mid 2004 on a unit of Canada land and was lucky to exit in 2007 (good return). But my poor friend invested in end 2004 and till to-date still see no sign of exiting.

    I believed this landbanking company i invested in are genuine only issue are some of the sales people unethical way of presentation and “con”vincing investors to sign documents without really explaining. And some of them are really lazy buggers. (my bad experience with them)

    My dissatisfaction with this investment is that after exiting….it take nearly a year or so to get the balance of the amount (75%) after giving me an upfront of 25% few months later from the exit date. (In total if i can recall from exit point to full payment is about 1.5yrs)

    And I miss out a lot of investment opportunities and even interest. ANd the most frustration part is the company pass the cheque to the sales guy without informing me and that lazy bugger sitting on it till I call and found out from the account dept. And after checking out the date, the cheque was already about 2 or 3 months old. His excuse..just received yesterday.

    The company are too concern about the sales people and neglected the interest of the investors, which is bad.

    When I asked why the cheque was not send to me…for security purpose. And when i asked the sales guy to send to me…it cannot be done because i need to sign a document.
    When I went to his office to collect the cheque and asked for the form to sign….it was a reinvestment form.

    That’s my experience

  15. By the way, one of my friend attend the talk on UKland last 2 months from the Jardin Smith, if not mistaken, and got a shock on the second visit when he was ready to invest.

    He is suppose to attend with his wife on the first visit but she can’t make it and on the second visit, his wife was called and still can’t make it, so he went there again and registered under his wife name and the mini buffet lunch as well(haha). Heard it is not bad.

    The same project and the same plot of land from his first visit and the second visit, there is a price difference of about 20k.

    Guess they are desperately trying to “con” of the sales, yah…and I agreed …UKland is a scam….

  16. Can anyone share some light on Jardin Smith? Any Exits or Good/Bad News with regards to JS?

    I’ve heard about their generous mini buffet lunch to invitees and is good to be true! as the saying “No Free Lunch” is the order of the day so as not to be entrapped into investing?

  17. Sorry just notice that I didn’t make a clear statement.

    The 20k difference is that on his second visit and the price quoted to him is cheaper than his first visit by 20k.

    So did the price actually depreciated or are they trying to make a “fast kill” soon?

  18. By the way, this company is still new…approx 2 yr old

  19. Dear People,

    I have some information pertaining to Kingsbury. Not validated though.

    Firstly, they sell land in Texas. The land was launched in 2009 and until now still available. The 0.1 acre is sold for USD10k, translate to USD100k/acre ! Did a check on the website on the land prices there and this is way too high.

    Secondly, heard it was owned by 3 Msian who are not fulltime into this. They do not have any planning team in Texas. Since the duration of the holding is 3 – 5 years, they plan to sell this off to Malton, a Spore holding company for ‘development’.

    Thirdly, this is a very new company and no track records. This is also the first project that they sell.

    Last, they offer to give away TV ! but forgot what’s the condition to qualify. My advise is to buy your own TV !

    So, please do your own due diligent before getting into this investment.

  20. Victims of Profitable Group- scam and complaints:

    great infos.
    www. profitable-group-victims.blogspot.com/2010_09_01_archive.html

  21. Hi Alan,

    Before:
    [DISCOVER the Road to Financial FREEDOM!] New Comment On: Land Banking-Central Bank of Malaysia Raids Walton International Property Group (M) Sdn Bhd!‏

    After:
    [DISCOVER the Road to Financial FREEDOM!] New Comment On: Land banking is A Scam?

    In sympathy to Ms.Y (originally) and now Ms.X…………I notice (acting in good faith) this time round the company in name is removed so as not to embarrass her job or anyone.

    It is a wise thing to do and to garner readership by not having any discrimation whatsoever.

  22. Hi Alan,

    Wonder if you have heard about Edgeworth Properties – land in Alberta, Canada. Understand that they are having some financial difficulties, internal shareholder dispute and may not be able to continue as a going concern. Also many buyers have not received their titles for quite some time (a few years). Sounds like a lot of people may loose their money.