For investors still clinging on to the hope that their investment in EcoHouse’s projects in Brazil is still safe, it just got worse.
Up to 1,500 Singapore investors have invested up to S$70 million in EcoHouse projects. It is not known how many of them actually got their money back.
The Brazilian Embassy in Singapore confirmed yesterday that it had no prior knowledge of the existence of EcoHouse’s operations in Brazil. The embassy also 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”.
Yet 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.”
Who to believe?
1) First, take a look at this slick YouTube Video by EcoHouse
2) EcoHouse had promised a 20 per cent fixed rate of return for a 12-month investment contract with a minimum outlay of S$47,810, but many Singaporean investors have not received their returns or their capital despite their contracts reaching maturity.
3) Most recently, it closed its 42nd storey rented office at Suntec Towers 2.
Why Empower Advisory DID NOT encourage anyone to invest or introduce anyone to EcoHouse projects
|First Sense||Does it stack up?|
|The logic and risk of the EcoHouse projects in Brazil||We were not able to verify the claims of EcoHouse nor its promoters. Recourse action if things go wrong is murky and not well understood.
Promised 20% returns a year do not make sense when the developer can borrow in Brazil and partners for less than that and pocket more profits for itself.
For its low-cost social housing, will the Brazil government really allow a private developer to make so much margin from low cost social housing that EcoHouse can afford to give investors 20% return within a year?
Returns to early investors could most easily come from later investors similar to a pyramid scheme.
|Marketing efforts of EcoHouse||Why we were not overly impressed|
|Reported International Development Awards that EcoHouse won||We’re in this industry long enough to know that such awards can be bought and even staged.|
|Slick YouTube Videos||Surely the videos have to be attractive to loosen your wallets and purse.|
|Swanky Address||EcoHouse Group's office on the 42nd storey of Suntec Tower Two is rented. The money came from early investors?|
|Regular investor/chill out meetings at its office
EcoHouse invites via Eventbrite
|Just a way to build rapport and get more investors in through word of mouth marketing by earlier investors.|
|Reports of buying frenzy at their launches||Again, we’re in this industry long enough to know that buying behavior can be manipulated by planting staff within the audience to pretend to sign up and buy.
Other tricks such as having staff (planted or not) tell the audience like, “Oh my laywer friend invested too, my doctor friend invested also, breaks down the defence of many people.
Unsavvy investors start thinking, “Even doctors and lawyers invest, surely the project is ok and I can’t be wrong."
|Extensive coverage and Exclusive interviews with local website Property Guru. Investor meetings introduced by Property Guru’s journalist||For a long while, a lot of good stuff about EcoHouse was reported by Property Guru. And we’re not sure if Property Guru verifies any of those claims by EcoHouse before publishing them.
Some folks might think, if what EcoHouse claims on Property Guru is reported, it must be true? Not us.
|EcoHouse set up booth in SMART Expo 2013 in Singapore at MBS 28-29 Sep||Anyone can set up booth at SMART Expo. It’s just marketing. It's not a sign of credibility.|
|EcoHouse theme of being social conscious and be part of a meaningful programme to build sustainable low cost social housing in Brazil||Just a way to tug at heartstrings. Remember people with no verification asking you to donate to a worthy cause. And you don’t even know how real it is?|
|Some early investors reportedly got their 20% return with capital||Similar to a pyramid scheme, it could be structured such that early bird gets the worm to entice other birds and provide buffer to continue the payout. We cannot verify how many investors actually got their returns + capital back.|
However, our harshest words are reserved for local promoters who got Singaporeans into this investment. They know who they are and if you are a stuck investor, you know who they are.
1) What was more important to you? Your commission?
2) Did you not consider the risk of the projects by EcoHouse that we considered and firmly declined any involvement in?
3) Did you care that Singaporeans could lose their hard earned savings?
4) What kind of independent due diligence did you do? Did you even do any?
5) Have you been honest with the investors you bought into EcoHouse investments?
6) Are you involved in any of the smoke screen and mirrors?
Your investors you brought in need and deserve answers.
It is a very painful experience for many Singaporeans stuck in this investment. That is why we must stand up and warn those around us about promoters who introduce such hurtful investments and projects. We have also exposed some smokescreen and mirrors tricks commonly used The more we speak up, the less folks will get hurt in future and learn to be more careful with their money.
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