Is Avenue Hotel Property Scheme a SCAM ?

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   After digging about Avenue Hotel Property Scheme, i thought it might be a good thing to share here.

   
   
   

   Info about Avenue Hotel Property Scheme (PDF).

   
   
   

   Company's website: Avenue Properties Bhd.

   
   
   

   My research:

   
   
   

   1) From the prospectus (http://avenuepropertiesberhad.com/pdf/avenueproperties_prospectus.pdf), look at page 40. The company’s RM 5 Million paid up capital is NOT funded by cash, but by Director’s words that he owes the company RM 5 Million. Then, at page 40, it says that amount is unsecured, interest free and without fixed repayment terms. In other words, this is a RM 2 company in disguise. To stretch that matter further, i can even create a company which is owned by me and my wife, paid up capital of say…. RM 100 Billion, with the only asset of the company is that i owed the company RM 100 Billion.

   
   
   

   How much is a “Guarantee” worth if that person DON'T have any assets and NO income? Do you think the bank would lend such person Millions (or for that matter, even thousands) ? Why would we treat this company differently?

   
   
   

   2) The Trustee they use (My Premier Trustee) is not registered (http://www.sc.com.my/eng/html/resources/stats/RegisteredTrustees.pdf). Why don’t they use registered trustee ? I asked the same question to a so called “Property investment company”, and that promoter's answer was, “Tell you what, you form one with the same terms using registered Trustee, and i’ll invest with you.”.

   
   
   

   Today, that company is no longer around (after separating quite a number of ignorant and possibly greedy people from their money). hhmm……

   
   
   

   3) Look at My Premier’s Trustee’s company profile ( http://www.mpt.com.my/Company%20Profile%202011.pdf) . Then, take a look at the companies they worked with. Notice none are companies u heard of. Next, google those companies. And……

   
   
   

   3a) AZZ Marketing. Some headlines when u search in google (in 1st page) are,
   – “AZZ Marketing Tidak Bayar Hasil Pemilik”
   – “Azz Marketing menipu jutaan ringgit duit rakyat”
   – “AZZ Marketing Berhad Pelaburan Ikan Keli Penipu!”

   
   
   

   - Facebook Group – bongkar AZZ Marketing. (http://www.facebook.com/group.php?gid=155223407845386).

   
   
   

   The funny thing is, My Premier Trustee on their website says that they’re not trustee for AZZ Marketing Enterprise, but only for AZZ Marketing Bhd. But when you go to main page of AZZ Marketing Bhd (http://www.azz4u.com/) , and you clicked on the bottom link http://www.kppazzmarketing.blogspot.com/ , that page wrote in their title , “KESATUAN PEMILIK PAKEJ AZZ MARKETING ENTERPRISE “. I might not be smart, but definitely i’m Not dumb to know that AZZ Marketing Bhd is related to AZZ Marketing Enterprise, and My Premier Trustee is related to both of these companies one way or another.

   
   
   

   3b) Arowana Ventures Sdn. Bhd. – Google it, and the scam has been a few years ago. I remembered surfing their website, and it’s closed. Now, it’s reopened again, promising a certain guaranteed return.
   – Read the lowyat’s forum (http://forum.lowyat.net/topic/2100249/all). I’m surprised they Recycle the same scam again.
   – Posted in June 2009 in investlah.com (http://www.investlah.com/forum/index.php?topic=3234.0). Search for “Arowana”.

   
   
   

   Same guarantees with all companies in MPT’s portfolio, different product. I wonder does “Ikan Keli” is the malay word for Arowana Fish. If that is so, that scammer really good in Recycling.

   
   
   

   3c) Search ” Prestige Diary Farm Berhad” on google, and on the main page, you’ll get:
   - [SCAM] Prestige Dairy Farm (M) Sdn Bhd (832757-A) [Archive …” (http://www.carigold.com/portal/forums/archive/index.php?t-57912.html)
   - “Prestige Dairy Farm memang scam – Topix” (http://www.topix.com/forum/world/brunei/TCM4J1NON9DPOE8UH/p34)
   - “Scam or Not? Prestige Dairy Farm” (forum.lowyat.net/topic/834067/+60)
   – “Skim cepat kaya versi baru : Labur dalam syarikat penternakan” (http://www.saifulsham.com/2008/skim-cepat-kaya-versi-baru-labur-dalam-syarikat-penternakan/)

   
   
   

   Also, forumers commented that the person behind “Prestige Diary Farm” and “Arowana Ventures” is the same person.

   
   
   

   3d) Look at ICT Venture – the structure looks about the same as all the rest too.

   
   
   

   Now, what does all these companies have in common:
   1) They give Guaranteed Return.
   2) The Return is way higher than FD (otherwise, how to lure the greedy + igporant people from “safe” bank?).
   3) THey give referral fee for promoting it, or it’s promoted by 3rd party marketeer.
   4) THEY USES MY PREMIER TRUSTEE.
   5) And lastly, … after a few years, the company is gone, like David Copperfied’s magic trick.

   
   
   

   Now, let’s assume we’re not sure “Avenue Hotel Property Scheme” is a scam or not. If that is so, then that means we’re not sure we might get back our Capital or not. Now, at 7% return, it’ll take 15 years for us to get back all our capital. Forget about Opportunity Cost lost during this 15 years. If that is not long, well, i don’t know what is.

   
   
   

   For the benefit of people who have already invested, i suggest you try to get back your refund. If can’t get back refund, then let’s pray that this is NOT a scam. After all, if it talks like one, acts like one, breath like one, smells like one, …… Maybe it might Not be one.

   
   
   

   Nevertheless, here’s more facts :
   First, let’s look at REIT’s Trustees. I’ve found there are 14 REITs in Malaysia, and below are the REITs and the Trustee they used. Note that AR stands for Annual Report. All AR can be obtained (and verified) from http://www.bursamalaysia.com/ .

   
   
   

   
   1. AMANAH HARTA TANAH PNB – Amanah Raya Berhad (page 2 of 2010′s AR)
   2. AMANAHRAYA REAL ESTATE INVESTMENT TRUST – CIMB Trustee Berhad (page 4 of 2010′s AR)
   3. AMFIRST REAL ESTATE INVESTMENT TRUST – Mayban Trustees Berhad (page 5 of 2011′s AR)
   4. ATRIUM REAL ESTATE INVESTMENT TRUST – BHLB Trustee Berhad (page 15 of 2010′s AR)
   5. AXIS REAL ESTATE INVESTMENT TRUST – OSK Trustees Berhad ( page 3 of 2010′s AR)
   6. AL-HADHARAH BOUSTEAD REIT – CIMB Trustee Berhad (page 28 of 2010′s AR)
   7. CAPITAMALLS MALAYSIA TRUST – AmTrustee Berhad (page 20 of 2010′s AR)
   8. HEKTAR REAL ESTATE INVESTMENT TRUST – AmTrustee Berhad (page 32 of 2010′s AR)
   9. AL-’AQAR KPJ REIT – Amanah Raya Berhad ( page 5 of 2010′s AR)
   10. QUILL CAPITA TRUST – Mayban Trustees Berhad ( page 2 of 2010′s AR)
   11. STARHILL REAL ESTATE INVESTMENT TRUST – Mayban Trustees Berhad (page 14 of 2011′s AR)
   12. SUNWAY REAL ESTATE INVESTMENT TRUST – OSK Trustees Berhad (page 7 of 2011′s AR)
   13. TOWER REAL ESTATE INVESTMENT TRUST – Am Trustee Bhd (page 3 of 2010′s AR)
   14. UOA REAL ESTATE INVESTMENT TRUST – OSK Trustees Berhad ( page 5 of 2010′s AR)

   
   
   

   How many of the 14 REIT uses Trustee that is listed in SC’s website? ALL !!!Or, let me rephrase the question differently. How many of the 14 REIT uses non-registered Trustee ? NONE !.

   
   
   

   Just in case someone might say that this interest scheme by SSM is different from REIT or Unit Trust (since both REIT and Unit Trust uses registered Trustee which can be found in SC’s website), i’ve dug further to the SSM’s interest scheme companies.

   
   
   

   There are currently 3 types of interest scheme in SSM, Sharefarming Scheme , Equipment Sharing and this Property Scheme. For convinience, let me list all the companies below, and the trustee they used.
   - AZZ MARKETING BERHAD – MY PREMIER TRUSTEE
   - GOLDEN PALM GROWERS BERHAD – AmTrustee Berhad – ( http://goldenpalm.com.my/auditors.html )
   - PLENTIFUL GOLD-CLASS BERHAD – BHLB Trustee Berhad ( http://www.chgs.com.my/trustee.asp )
   - AROWANA VENTURE BERHAD – MY PREMIER TRUSTEE
   - SWIFTLET ECO PARK BERHAD – PB Trustee Berhad ( http://www.swiftletecopark.com.my/scheme_why_esris_5key.htm
   - EAST WEST ONE CONSORTIUM BERHAD – Equity Trust (Malaysia) Bhd – ( page 10 of the company’s eprospectus here: http://www.eastwestone.com/downloads_eprospectus.html )
   - ICT ZONE VENTURES BERHAD – MY PREMIER TRUSTEE
   - AVENUE PROPERTIES BERHAD – MY PREMIER TRUSTEE

   
   
   

   All companies uses Trustee that can be found in SC’s website (which are registered), except for 4 companies below:

   
   
   

   1) AZZ MARKETING BERHAD
   2) AROWANA VENTURE BERHAD
   3) ICT ZONE VENTURES BERHAD, and
   4) AVENUE PROPERTIES BERHAD

   
   
   

   The 4 companies uses the SAME Trustee, which is My Premier Trustee, which is NOT a Registered trustee in SC’s website. Isn’t that alarming?

   
   
   

   Before looking for Guaranteed return, why not ask a more fundamental question? Where does the money comes from to pay the Guaranteed return since the business’s Revenue, Cost and thus Profit (be it Computer Rental or Arowana or Property) is NOT Guaranteed?

   
   
   

   As for CT Choo’s website, i googled further, and i found that this website of his ( https://sites.google.com/site/ctchoocap/home?pli=1 ) states that they’re working closely with My Premier Trustee.

   
   
   

   And this website of My Premier Trustee ( http://mypremiertrustee.blogspot.com/ ) have only 3 post, created only in August 2010, but have one post which is sourced from CT Choo.
   I’ll let you guys form your own conclusion.

   
   
   

   p/s: For the promoters of this scheme, please tell these companies to change trustee to registered trustee. Or, get My Premier Trustee registered with SC. However, if you still believe that it’s a good scheme, i suggest you to invite your wife, parents, relatives and all close friends to invest besides you investing at least 10% of your Net Worth there yourself.

   
   
   

   p/p/s: And if you own a house, you can actually get FREE money. How? Refinance your house to AIA or ING and get a fixed rate housing loan (say 30 years). Then take this lump sum and put (i avoid using the word “invest” since it doesn’t qualify as one as per Benjamin Graham’s definition) in this “Scheme”. Free money every year.

   
   
   

   HOWEVER, I STRONGLY ADVICE AGAINST THIS ! Being Greedy combine with Ignorant is bad enough. And if you add in Leverage to Greed and Ignorance , disaster awaits superbly soon!

We try to price, rather than time, purchases.

This article was extracted from Warren Buffett's letters to Berkshire Hathaway's shareholders in 1994. It's available at : http://www.berkshirehathaway.com/letters/1994.html

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We try to price, rather than time, purchases. In our view, it is folly to forego buying shares in an outstanding business whose long-term future is predictable, because of short-term worries about an economy or a stock market that we know to be unpredictable. Why scrap an informed decision because of an uninformed guess?

We purchased National Indemnity in 1967, See's in 1972, Buffalo News in 1977, Nebraska Furniture Mart in 1983, and Scott Fetzer in 1986 because those are the years they became available and because we thought the prices they carried were acceptable. In each case, we pondered what the business was likely to do, not what the Dow, the Fed, or the economy might do. If we see this approach as making sense in the purchase of businesses in their entirety, why should we change tack when we are purchasing small pieces of wonderful businesses in the stock market?

Before looking at new investments, we consider adding to old ones. If a business is attractive enough to buy once, it may well pay to repeat the process. We would love to increase our economic interest in See's or Scott Fetzer, but we haven't found a way to add to a 100% holding. In the stock market, however, an investor frequently gets the chance to increase his economic interest in businesses he knows and likes.

Take a look at what Warren Buffett wrote to his investors at July 12, 1966 after Dow Decline by more than 10% since it's peak to May that year. Sounds familiar to what we're facing currently?

"I resurrect this "market-guessing" section only because after the Dow declined from 995 at the peak in February to about 865 in May, I received a few calls from partners suggesting that they thought stocks were going a lot lower. This always raises two questions in my mind:

(1) if they knew in February that the Dow was going to 865 in May, why didn't they let me in on it then; and,

(2) if they didn't know what was going to happen during the ensuing three months back in February, how do they know in May?

There is also a voice or two after any hundred point or so decline suggesting we sell and wait until the future is clearer. Let me again suggest two points:

(1) the future has never been clear to me (give us a call when the next few months are obvious to you – or, for that matter the next few hours); and,

(2) no one ever seems to call after the market has gone up one hundred points to focus my attention on how unclear everything is, even though the view back in February doesn't look so clear in retrospect.

If we start deciding, based on guesses or emotions, whether we will or won't participate in a business where we should have some long run edge, we're in trouble. We will not sell our interests in businesses (stocks) when they are attractively priced just because some astrologer thinks the quotations may go lower even though such forecasts are obviously going to be right some of the time.

Similarly, we will not buy fully priced securities because "experts" think prices are going higher. Who would think of buying or selling a private business because of someone's guess on the stock market?

The availability of a question for your business interest (stock) should always be an asset to be utilized if desired. If it gets silly enough in either direction, you take advantage of it. Its availability should never be turned into a liability whereby its periodic aberrations in turn formulate your judgments. A marvelous articulation of this idea is contained in chapter two (The Investor and Stock Market Fluctuations) of Benjamin Graham's "The Intelligent Investor". In my opinion, this chapter has more investment importance than anything else that has been written."