SINGAPORE: Hundreds of investors here, who ploughed
millions of dollars into the hands of a developer claiming to be working
with the Brazilian government on a social housing programme, were left
fearing the worst after the Brazilian Embassy said on Thursday (Aug 14)
that its government had no dealings with the company.
In fact, it
was not even aware until recently, when complaints from Singapore
investors mounted, that the United Kingdom-based company operated in
Brazil.
EcoHouse, which has abruptly shut down its Suntec offices,
is neither affiliated with the Brazilian national housing programme nor
registered as a partner of its state-owned bank.
“In view of
allegations by Singapore investors regarding EcoHouse Group,
a company
linked to executives in the UK, the Embassy of Brazil would like to
state that the Embassy had no prior knowledge of the existence of
EcoHouse’s operations in Brazil,” the embassy said in response to
TODAY’s queries.
Some of the investors had approached the embassy.
After contacting several agencies within the Brazilian government, the
embassy found that there was “no record of any agreement with any
company bearing the name ‘EcoHouse’ related to ‘Minha Casa, Minha Vida’
(Brazil’s national housing programme), or any other federal programme”.
The
embassy added that “Bosque Residencial” in Natal, State of Rio Grande
do Norte – one of the housing developments offered by EcoHouse for
investment – is not listed in the records of Brazil’s state-owned bank,
Caixa Economica Federal.
COMPANY ON MAS' ALERT LIST
On
its website, EcoHouse claims that it was chosen by the Brazilian
government as “the only UK company to date officially authorised to
build developments under Minha Casa, Minha Vida”, which aims to provide
three million homes for the country’s growing middle class.
The
company was founded in 2009 by Mr Anthony Armstrong Emery. Various media
reports have put the
number of Singapore investors in EcoHouse projects
at between 800 and 1,500. Up to S$70 million had reportedly been
ploughed into three housing projects.
Some investors have begun
legal action against EcoHouse to recover their capital investments,
which amounted to a minimum of £23,000 (S$47,810) per unit.
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EcoHouse
had promised a 20 per cent fixed rate of return for a 12-month
investment contract, but many investors said they have not received
their returns or their capital despite their contracts reaching
maturity.
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The company was recently put on the Monetary Authority
of Singapore’s (MAS) Investor Alert List, which lists unregulated
companies that may have been wrongly perceived as being licensed or
authorised by the MAS.
Reports have been filed against the company
with the police and the Commercial Affairs Department (CAD). On whether
EcoHouse is under probe, a CAD spokesman would only say: “It is
inappropriate to comment on police investigations, if any.”
In
response to TODAY’s queries sent on Tuesday, EcoHouse chief operations
officer Deen Bissessar said on Thursday that the closure of its offices
in Suntec Tower 2 was part of measures to “consolidate into our Brazil
operation and managing global affairs from our global headquarters in
London”.
He added that “the position remains unchanged” and the
company is trying to “improve the situation with regard to construction
and payments”.
“We absolutely remain committed to our clients and
if that was not the case, we would simply shut all doors – which is
something we have no intention of doing,” added Mr Bissessar. The
company was unable to respond to queries about the Brazilian Embassy’s
comments on Thursday by press time.
The developer’s registered
address with the Accounting and Corporate Regulatory Authority is in
Cecil Street. When TODAY visited the premises, it was occupied by a
company called MC Corporate Services.
EMBASSY ADVISES DUE DILIGENCE
For
companies regulated by the MAS, investors could seek redress at the
Financial Industry Disputes Resolution Centre. However, such a recourse
is not available for EcoHouse investors.
The Brazilian Embassy has
urged potential investors considering putting their money in Brazil’s
property market to carry out due diligence when they encounter any
developers claiming to have projects supported by the Brazilian
government.
Consumer watchdog CASE advised consumers to be mindful of the high risk involved when investing in overseas properties.
CASE
executive director Seah Seng Choon pointed out that the laws in other
countries are different from Singapore’s and investors may not enjoy the
same degree of protection. “Seeking redress in the event of dispute can
be cumbersome and in most cases consumers are not able to get their
money back,” he said.
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