Sunday, June 13, 2010

Land Banking in the Spotlight again? - Profitable Group / Profitable Plot Is it a Scam?

As reported in The Sunday Times June 13 2010 - Land investors show up at Speakers' Corner, 5 year-old Singapore-based investment firm Profitable Group which has dealings including land banking and Boron a fuel product, had been placed on the Monetary Authority of Singapore's (MAS) Investor Alert List in the latter part of last year. 


Land Banking - Profitable Group / Profitable Plot


40 people turned up at Speakers' Corner yesterday in what is Part 2 of the saga. Profitable Group was also in the headlines recently when angry investors stormed its headquarters in Stanley Street demanding their payouts.
The disgruntled investors revealed that they were convinced by Profitable Group that their investments would bring them guaranteed returns! 


Why are these investors so angry? Many have not seen the "guaranteed returns" despite persistent calls to the company. Promises of guaranteed profit of 12.5 per cent after six months were made to one investor who invested in their fuel product called Boron but he has yet to see the money despite the maturity being end of April. It is reported that some investors have parted with as much as $180,000. Calls to the Profitable Group by the journalist went unanswered.


Why did people part with their money? Some of the reasons given are that they were taken in by the sleek presentation, roadshows were at nice shopping centres like Raffles City, it looked professional and impressive.


That's not to say all Land Banking companies are like that but we can all learn some lessons from this episode.


Lessons Learnt?

  1. Always do your homework before you part with your money. Especially in lesser-known companies. 
  2. Before investing check Monetary Authority of Singapore's (MAS) Investor Alert List
  3. Diversification. No matter how profitable or impressive an investment vehicle is even when it has been around a long time and has been giving you handsome returns, the basic applies - Never put all your eggs in one basket. (Read about ONE of the examples Madoff Investment Scandal which went on for close to half a century!) 

You may also want to read about another Land Banking Company in my previous entry $6million Lost in Land Banking  


As highlighted in the previous entry on Land Banking,


"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 Securities & Futures Act (SFA) and Financial Advisers Act (FAA)"
- spokesman for the Monetary Authority of Singapore

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