I picked up on a story in the Dutch press recently.
Earlier this year I saw repeated advertisements for the Golden Sun Resorts development in Turkey: even on RTL-Z, the local financial news channel, and some feature 'articles' in newspapers. It was a property bond with a minimum investment of €50K. They promised "guaranteed" results of 12.8% per year cash yield return over a number of years whilst the resort was developed. They published a very nice glossy brochure with plenty of figures, accountants stamps, translations and even had a "formally approved" financial risk analysis available for a short time on their web site. I may still have a copy on my PC. They also had online sales of the villas via a very fancy 3d site-plan web interface. I looked seriously at this as an investment. I decided against for three reasons i) the numbers did not add up if they could not sell the central hotel in the development and there are a lot of (empty) hotels already in Turkey ii) I checked up on the company that was running the deal via Dutch companies house and found they had a paid up share capital of just 18K euros, which is the legal minimum for any company iii) the prospectus made this out to be a low risk bond, but my research told me this was a high risk investment in property development from a company with no track record. I even published on a few local investors sites saying that I was not happy with the numbers and the mortgage guarantee, and asked others for their opinion. I did not invest, although I was sorely tempted as a high-risk high-reward punt.
So what was the true story? Well it is still being told. But it looks pretty much like it was all a very elaborate fraud. They allegedly collected millions from unsuspecting investors and then scarpered. All of the property deeds, stamps and accountants letters etc. were apparently faked. The FIOD (financial investigation and detection service) are now investigating if there is a formal case to answer.
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I've also just read on teletext that they arrested 15 people today and conducted house searches in 54 places including Switzerland and Belgium. The FIOD have approx 150 statements from investors (who deposited at least 50K each) >= €7.5M.
Estimates on RTLZ web page said that 700 people had invested >= €35Mio
Similar story for "Royal Dubai." Possible links to "Palm Invest?" Denied by Palm Invest. But a lawyer is taking them to court.
Buyer beware: Make sure you know what legal recourse you have when investing in overseas property, and who regulates the investment. A good rule of thumb is simply not to invest in any funds in the Netherlands with a minimum deposit of €50K, because these are not regulated by the AFM (authority for financial markets.) As a major investor you are assumed to be able to take care of yourself. Funds with a minumum investment under 50K that are sold to retail investors are heavily regulated on the other hand.
Earlier this year I saw repeated advertisements for the Golden Sun Resorts development in Turkey: even on RTL-Z, the local financial news channel, and some feature 'articles' in newspapers. It was a property bond with a minimum investment of €50K. They promised "guaranteed" results of 12.8% per year cash yield return over a number of years whilst the resort was developed. They published a very nice glossy brochure with plenty of figures, accountants stamps, translations and even had a "formally approved" financial risk analysis available for a short time on their web site. I may still have a copy on my PC. They also had online sales of the villas via a very fancy 3d site-plan web interface. I looked seriously at this as an investment. I decided against for three reasons i) the numbers did not add up if they could not sell the central hotel in the development and there are a lot of (empty) hotels already in Turkey ii) I checked up on the company that was running the deal via Dutch companies house and found they had a paid up share capital of just 18K euros, which is the legal minimum for any company iii) the prospectus made this out to be a low risk bond, but my research told me this was a high risk investment in property development from a company with no track record. I even published on a few local investors sites saying that I was not happy with the numbers and the mortgage guarantee, and asked others for their opinion. I did not invest, although I was sorely tempted as a high-risk high-reward punt.
So what was the true story? Well it is still being told. But it looks pretty much like it was all a very elaborate fraud. They allegedly collected millions from unsuspecting investors and then scarpered. All of the property deeds, stamps and accountants letters etc. were apparently faked. The FIOD (financial investigation and detection service) are now investigating if there is a formal case to answer.
[broken link removed]
[broken link removed]
I've also just read on teletext that they arrested 15 people today and conducted house searches in 54 places including Switzerland and Belgium. The FIOD have approx 150 statements from investors (who deposited at least 50K each) >= €7.5M.
Estimates on RTLZ web page said that 700 people had invested >= €35Mio
Similar story for "Royal Dubai." Possible links to "Palm Invest?" Denied by Palm Invest. But a lawyer is taking them to court.
Buyer beware: Make sure you know what legal recourse you have when investing in overseas property, and who regulates the investment. A good rule of thumb is simply not to invest in any funds in the Netherlands with a minimum deposit of €50K, because these are not regulated by the AFM (authority for financial markets.) As a major investor you are assumed to be able to take care of yourself. Funds with a minumum investment under 50K that are sold to retail investors are heavily regulated on the other hand.