KOTA KINABALU: Some 176 disgruntled Sabahans who invested in a United Kingdom land banking scheme are now left with mere paper deeds to their plots of land that may be restricted from development as it is a green belt zones.
They claimed that they were misled into parting with substantial sums of money to buy up undeveloped plots of land in the UK that supposedly had “high potential of capital appreciation” of between 250% and 500% when future development occurred on or around these land plots.
They were “persuaded” into parting with RM104,000 to RM520,000 by Profitable Plots Sdn Bhd, a land banking company, to pick up undeveloped property lots in the UK with the view to making big profits.
It was easy for Profitable Plot to do business in Sabah because many local investors, trying to beat the high rate of inflation in Sabah, were looking for opportunities to diversify into real estate investments abroad.
The company had projected that if the UK is to meet its government’s housing target of three million new homes by 2020, it will have to build 1.8 million new houses on greenfield sites or the green belt.
They claimed the three million target is the minimum needed to ease the UK’s overstretched housing market
Many investors, however, complained when they realised that their legally owned land were lots in either in green belt zones or green lungs or agrarian zoned lands which did not allow for redevelopment and consequently huge profits as projected by Profitable Plots.
In 2008, the Companies Commission of Malaysia (CCM), suspecting fraud, took Proftable Plots to court.
CCM found that the firm not only facilitated the land title procurement process but did so without authorisation.
Profitable Plots actually sold the land directly to the investors and collected deposits and sale proceeds.
Earlier this month, the Kuala Lumpur High Court upheld a ruling that Profitable Plots had indeed contravened the Companies Act.
The ruling served to bring home the risk of investing in lands overseas by local investors.
Investments subject to policies
Left with just bragging rights to a property in the UK, mechanical engineer George Ngu and his wife are consoled that the whole transaction was “at least legit” to a certain extent.
“We have checked with the British authorities. My wife’s name and mine are on the master title. It is properly registered. We have our ownership papers in our file… we paid more than RM200,000,” he said.
The Profitable Group was promoting land banking investments in the UK by establishing an independent trust called “The Strategic Land Planning Trust”. The turst was for the exclusive benefit of its plot owners.
A trust is a legal arrangement whereby a person or organisation (in this case Profitable Group) transfers something of value (money, also known as asset) to another person or group called trustees.
The person or organisation transferring the asset is called the “settlor” and it is they who have established or settled the trust.
Those who benefit from the trust are called “beneficiaries” and the beneficiaries of “The Strategic Land Planning Trust” established by the company are the plot owners.
It is the role of the trustee to manage the assets of the trust in the best possible way for the advantage of the beneficiaries.
There are a number of different types of trusts and the one in this particular situation is called a “discretionary trust”.
Here the trustees can exercise discretion on how the assets of the trust are used and allow the assets of the trust to be protected.
It is for the settlor to indicate to the trustees how they would intend for the assets they have transferred into the trust to be used.
Among the risks faced by local investors putting their money in buying plots of land overseas are changes in planning, legislation and taxation structure that will impact on their lands as owners. - FMT
As someone from England can I say how sorry I am for this. I tried very hard to let people know through blogs and letters to the authorities and national newspapers but Profitable Plots used the huge profits from your investments to buy expensive lawyers to silence me. There are still UK land banking plots being offered in hotels and shopping centres in Malaysia. They are all scams please be careful.
ReplyDeleteThanks for sharing! It's good to know.
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