There was a report on 29 May 2010 in Today Online of 12 disgruntled investors turning up at the office of the UK land banking company Profitable Group to demand their owed payouts of around $700,000. They claimed they took this drastic step after their complaints to Profitable Group management were ignored.
This was followed up by another report on 1 June 2010 of an investor suing Profitable Group to recover $31,500 overdue by nearly a year.
Complaints and misgivings about the Profitable Group as a scam have been brewing in online forums since 2009, which have since spilled over into offline protests at the Speaker’s Corner by over 40 affected investors on 12 Jun 2010.
The only surprise is that it took so long for people to realise that not all is right with the Profitable Group. Having a large marketing budget to advertise on the ESPN Star Sports’s football channel and getting the endorsements of celebrity hosts (ex-Liverpool player Steve McMahon and ex-Manchester United captain Bryan Robson) do not make a company credible.
A quick check with Singapore’s Accounting and Corporate Regulatory Authority (ACRA) revealed that Profitable Plots Pte Ltd was first registered in 2005. Strangely enough, there was no record of the “Profitable Group” in Singapore or UK databases.
A spot of online investigation uncovered more dirt. UK newspaper The Guardian’s consumer reporter reported in Feb 2009 that the UK-based Profitable Plot Company Ltd had already gone into liquidation in 2008 for “failing to produce accounts”. They were promoting land which was designated as “green belt”.
(A “green belt” is land which is sandwiched between urban and rural areas, and is designed to stop urban sprawl. These land have tight planning restrictions on them and therefore highly unlikely to be developed. To overcome these restrictions, a land development company has to overcome objections at different levels of government. So the possibility of development is practically zero.)
A check with company credit report company UK Data confirmed that The Profitable Plot Company Ltd has already been dissolved.
The Profitable Plot’s woes weren’t confined to UK alone. Their subsidiary Profitable Plots Sdn Bhd in Malaysia were raided in Oct 2008 for “offering investments in illegal land investment schemes”.
My suspicions were raised by the Profitable Group’s website. I first visited it when I wanted to purchase tickets for the Liverpool football match in Singapore in May 2009. The website was poorly designed and I couldn’t find any information on how to buy. My friend eventually managed to buy the tickets for us.
(Why is an investment company in the business of organising football matches? The coordination and traffic management on match day were poor, highlighting their lack of experience in event management. They even played the Liverpool club anthem “You’ll never walk alone” twice, but failed to broadcast the Singapore anthem when the Singapore national team marched in, displaying blatant disrespect for the host nation.)
On their “Word from the Board” page, they claimed that “we are not an investment fund; we are not financial advisors” and that “not one client has ever lost money”. That should have been an early red flag.
I then explored the rest of the offerings from the Profitable Group, and I was especially intrigued by the Entegros smart client. I had seen the TV advertisement, read the technical information and marketing materials on their website, and still had absolutely no clue how it worked.
The same goes for the Boron-CLS fuel lubricant. There were many technical reports available for download, but I couldn’t make sense of the graphs at all.
I am a reasonably well educated and tech-savvy person. If I can’t understand the information, it’s not my fault.
Rule number one: if a company’s products and services are too complex to understand, it usually means they have something to hide.
The only part that was comprehensible was how investing money with them would bring you incredibly high returns. At one point, they were advertising daily returns of 1% to 9%.
Rule number two: if something sounds too good to be true, it probably is.
For what was supposedly an internationally renowned company, there was a shocking lack of contact information on the website. I couldn’t find a telephone number nor their office address. They only had an e-mail contact form.
Rule number three: if a company says “don’t call me, I’ll call you”, don’t expect to hear from them when something goes wrong.
My sympathies go out to all those investors who have been conned, there are probably many more who are too embarrassed to speak out. At the same time, I am disappointed at the lack of protection and regulation by the authorities. Land investment is not regulated by the Monetary Authority of Singapore (MAS) nor is it under the purview of the Small Claims Tribunal or Consumer Association of Singapore (CASE). A land banking investor simply has no legal recourse in Singapore when things go awry.
It is simply not enough to say “buyer beware”. These scams are happening with alarming regularity, and should be stamped out to avoid any damage to Singapore’s reputation as an aspiring financial hub. The ex-CEO of NTUC Income Mr Tan Kin Lian has written widely on the need for regulation of the land banking industry in Singapore.
I’ll end off with a screenshot of Google’s word completion capability:
Google helpfully suggested “profitable group scam”, “profitable group Singapore scam”, and “profitable group complaints” in the top four results if you type in “Profitable Group”.
[Updated on 9 Jun 2010: Additional information on Profitable Plot Company Ltd and Profitable Plot Sdn Bhd.
Updated on 13 Jun 2010: Added info on Speaker’s Corner protest, Mr Tan Kin Lian, and Profitable Group web site screen shot.]