A Lamborghini Is Not Due Diligence
I like Lamborghinis. If someone lets me test-drive one, I will happily take the keys.
But if someone parks one outside a wealth seminar and asks me for S$50,000, the car becomes part of my due diligence.
It could be owned, financed, leased, rented or borrowed. You don’t know. That’s the entire point.
The Straits Times reported that businessmen Lim Jian Bin, also known as Takeshi Lim, and Jason Fong Wai Hong have been declared bankrupt. More than 50 investors reportedly have around S$5 million locked in investments linked to their property deals and other businesses.
Some investors said they were promised guaranteed annual returns of up to 15%. Multiple police reports have been filed, and police investigations are ongoing.
This is not proof that either man operated a scam or Ponzi scheme. But it is a good reminder that a Lamborghini proves only that, at some point, there was a Lamborghini.
The car is marketing
Nobody needs a wealthy businessman to dress poor. But once the car, watch and luxury lifestyle become part of the pitch, ask what they are supposed to prove.
If the deal reliably produces 15% returns, show me the accounts. The steering wheel is not necessary.
One reported investment involved a 134 sqm commercial property operating as an unmanned laundromat. Whether the return was supposed to come from rent, the laundromat or another business, investors needed to see the actual numbers.
How much revenue? What were the rent, utilities, maintenance, loan and tax costs? It takes a heroic number of spin cycles to pay investors 15% every year.
You may not own any property
Putting money into a “property deal” does not necessarily make you a property owner.
Depending on the agreement, you might be:
- Named on the property title
- A shareholder in a company that owns it
- Lending money to that company
- An unsecured creditor
- Part of a profit-sharing arrangement
These positions have very different rights when payments stop.
If neither you nor your investment company appears on the title, you probably do not own the property directly. You may simply be financing someone else’s business.
Property trouble comes in different costumes.
Our earlier case about the S$2.4 million ski home that was actually a forest involved a supposed overseas apartment on land the developer did not own. This case is different: investors reportedly funded property deals and businesses promising high dividends, while police investigations continue.
Different wrapper. Same boring question: What independently verifiable asset stands behind the presentation?
A photograph of the property is not the answer.
The first dividend proves one thing
One investor told ST that he received the promised 15% dividend for two years before payments stopped. Other investors also reportedly received early payments.
Naturally, that builds confidence. The investment appears to be working.
But an early dividend proves only that money moved from one bank account to another. It does not show whether that money came from rental profit, business income, borrowed funds, the promoter’s capital or new investment money.
Ask for the complete money trail, not just your own payout.
The no-nonsense guide
Before investing, ask:
- What do I legally own? Property, company shares, a loan agreement or merely a promise?
- Who owns the property? Check through the Singapore Land Authority’s land-title search service.
- Who controls the company? Use ACRA’s business-information tools to check its status, directors, address and paid-up capital.
- Where does the 15% come from? Ask for the rent, expenses, debts and financial statements.
- What secures my capital? Find out whether you have any registered security or will simply join the queue of creditors.
- Is the promoter regulated? Check the MAS Financial Institutions Directory and representative register.
- What happens after one missed payment? The agreement should explain default, withdrawal and enforcement.
Have an independent lawyer explain the contract before you transfer the money. “Partner”, “collaborator” and “investor” are lovely words, but they don’t tell you what you legally own.
If your money is already stuck
Do not send more money merely because somebody says another payment will unlock your capital.
Save every agreement, bank record, receipt, message, brochure and presentation. Get legal advice on your contractual rights and any insolvency claim through the official Ministry of Law Insolvency Office.
If you suspect deception, contact your bank and make a police report.
Investment regulations, company records and insolvency procedures can change. Verify current information with the relevant authorities and obtain independent legal and financial advice.
Nice car. Show me the title deed.
