On 18 June 2014, I was invited by a friend to A2A Capital Management Raffles Place office. My friend wanted to sell me its property products. I did not invest but told my friend that I did not think the investments were legitimate. Fast forward to 6 April 2017, the Straits Times reported that there were recent police reports filed against the company.
The Straits Times reported that five investors with an aggregate of more than S$1 million invested in the company’s products from between 2011 and 2014. It is believe many more investors were affected. A2A Capital Management only had a paid-up capital of mere $100.
My friend who wanted to sell me A2A Capital Management products never made any promises that the return nor the capital was guaranteed. In fact, the investments documentations obtained by the Straits Times reporter showed that the investments offer no capital guarantee.
Nevertheless, a product that offers no capital guaranteed shouldn’t just become $0 so easily. For example, if you invest in STI ETF, the capital is also not guaranteed. But the chances of that becoming $0 can only happen if all the stock components of the STI becomes $0. Since all components in the STI are very large companies, it will take a catastrophic event in Singapore for that to happen. Actually, Singapore would have collapsed if STI ETF does become $0 because all the local banks are part of the STI index. Imagine UOB, DBS and OCBC becoming $0.
Not only A2A Capital Management’s products were not capital guarantee, its sales representatives were not adequately trained to conduct suitability assessment. Madam Mohamad, 78, who invested $500,000 in several projects said she received $1,500 only. Apparently, the investments were meant for her grandchildren’s education. Clearly it was not suitable to invest in such high-risk investments when the goal was for grandchildren’s education. Depending on her networth, the $500,000 amount could potentially be very large.
Here are some tips on how to avoid investing in investments that are clearly not suitable:
- Check out the background of the sales representatives. For property investments, you can check whether the sales person is registered with the Council of Estate Agencies. For financial product investments, check that the sales person is registered with the Monetary Authority of Singapore. Under Singapore’s law, those who market properties and investment products must be registered with the respective authorities. If the sales person is not registered with either authorities, you can be sure that the sales person has broken the law. Do you want to do business with a criminal?
- If the projected return is too high, walk away. Most investors do not have a good sense of what is meant by ‘high return’. For instance, I have a prospect who thinks 15%pa is reasonable. Actually, anything that is more than 6%pa in return has the same or more risk compared to an all stocks portfolio.
- If the investments provide any form of guaranteed (capital guarantee or return guarantee), check out the credit rating of the company that is providing the guarantee. Usually you cannot find any credit rating.
- If the losses of the investments are ‘insured’ with an insurance company, make sure the insurance company is a well known insurer. Normally scammers setup a shell ‘insurance’ company in BVI or equivalent countries and claim that this insurer will insure against any investments losses suffered by the investor. Actually, the insurance company is just a PO Box address. (It must be noted that there are legitimate insurance companies that do insure investments losses. These are known as credit default swaps.)
- Always asked the company how it make money. If the product promises to give 20% per annum in return, asked how the company does it. Usually it does it using a Ponzi scheme by giving new investors’ monies to older investors.
- Check whether is the company on MAS Alert List. Unfortunately the list is almost always outdated. A2A Capital Management was on the list only on 23 March 2017. When I was prospected in 2014, the company was not on the list.
- Asked what is the sales representative’s commission. This will tell you whether the sales representative is more interested in making a sale or having your interest at heart. I was approached to sell land banking products many years ago by a different company. The gross commission was a whopping 10% and the net commission was 7%.
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Was googling for more related news and saw ur post so i decided to share my experience with this company. i was introduced to this company by a colleague in 2013 and the investment really sounded attractive with its claim of up to 50% return with just minimum 10k of capital. The office in Raffles Place was really classy, and the sales representatives coupled with their sales brochures and pictures of the physical properties in US really sounded genuine. But what eventually made me decided to turn down the investment proposal was due to a number of factors which were kind of tell tale signs on hindsight:
1. The average returns of 10% per year sounded too good to be true and the idea of overseas investment sounded quite risky as i couldnt see the physical site for myself and also wasnt familiar with the US lawsm
2. During the presentation by the CEO himself, i saw the average uncle, aunties and even adults who looked like they were still schooling seemed to me that the target audience could be anyone as long as they had the money. So why would the company approach those potential investors when they could have possibly took up bank or corporate loans.
3. The CEO sounded cocky and was emphasising more on the “dont miss this golden opportunity or u regret” than explaining his product offering, which didnt seem logical to me.
4. While the office interior looked classy, there was one large section left empty and seemed like partially furnished with no seemingly intention to fully furnish it, and there was also no company sign board at its door. Even the lobby directory didnt have the company name on it, which my dad advised me that it could be a rented space from an existing tenant.
On a practical level, even if the company is properly licensed, the salespeople are properly registered, and the products are approved for sale in S’pore — it can still go bust. The only way to seek recompense if any is via civil lawsuit in pro-biz legal framework i.e. chance of success is low low low. And majority of people can’t afford to even launch civil lawsuit against companies anyway.
With regards to overseas property investment, 99% of those marketing & advertising in S’pore are poor deals at best (always overpriced) & legalized con jobs at worst. Legitimate foreign properties at fair pricing are almost always marketed back in their home countries. Only when they can’t sell to their own people (e.g. lousy properties, no profit margins etc) then some unscrupulous people will attempt to dump those pieces of trash onto naïve & cash rich Asians. Landbanking is the worst of the lot.
i am one of the investors who got suckered. The decision to invest was based on a friend-help-friend basis. Quite a number of the A2A staff are engineers from the same electronics industry I am in, and we kind of trust that engineers work on scientific facts and dont tell lies. Boy, what a mistake. Even many of the salesmen themselves got stuck with potentially worthless investment. And the investors are holding contracts which only USA courts have jurisdiction over them. Singapore courts can do nothing about it.
i too am sucked into this crap. bought in 2011 and just found out on the news site on the police reports made, i did not get any returns at all for the past 6 years. In the beginning there were some project update in 2012. later they closed down the offices in Kuala Lumpur. They presented in a nice office, brochures, and even the binded agreements look genuine, a check on singapore mas website did not list this company for the past years and guess now it is now water under the bridge. I am really angry at the entire management from this A2A capital.
Saw one of the video on their website that claims will be aired on CNBC ASIA, it is all bluff!
(Admin: names of employees of A2A were removed).
Hi John (and any other investors)–
My name is Alanna and I am a reporter in the U.S. I am located in Texas, where several of these investment properties are located. I am interested in hearing about your experience. Could you please contact me at [email protected]? Thank you.
I am also a victim here. Any chance we could all consolidate our cases together or find a solutions to get back at least a portion of our investment back ? I have yet to file a police report.
hi Dennis and all other affected investors, pls go and file a police report, pls contact me at +65 90067715, I am also an investor and I might be to able to assist u.
Good day, may I know what the outcome? I’m invested too but I working oversea. Do not have much detail
Good day, i am the investor too, i just realize all the nonsense things happened. What should i do now to claim back the money? I really need the advise. Thank you!
Hi Martin, my name is Alanna and I am a reporter for a television station in the U.S., looking into these housing developments. Could you please contact me at [email protected]? Thank you.
Me too, anyway we can get together to see how to claim our monies back?
Why izit people only start writing in to blogs/news sites when kena scammed? By then too late liao.
Be wary of people or companies who say can help recover your money. Go listen to them if you’re desperate, but NEVER ever pay money to them.