S'pore property agent jailed 3 months after promoting Australia housing scheme that lost investors S$16 million

According to CNA, a 55-year-old licensed Singaporean real estate agent has been sentenced to three months’ jail after her company promoted an Australian property investment scheme, causing 347 investors to lose a total of S$16.21 million.

Out of those affected, 344 were local investors who lost a combined S$16.09 million.

Wendy Kwek Siang Ling pleaded guilty on Jun. 24 to one charge under the Securities and Futures Act for consenting to her company dealing in securities without a Capital Markets Services licence from the Monetary Authority of Singapore (MAS).

Kwek also fully managed and controlled Global Property Network Inc (GPNI), a company with no employees incorporated in Seychelles in 2011, alongside her then-husband, to facilitate overseas property deals.

It was agreed that all funds in GPNI's bank account belonged solely to Kwek.

Through her introduction services, GPNI received S$2.735 million in commissions.

Ran property investment courses

In court documents seen by Mothership, Kwek was a licensed real estate agent between January and August 2015, the period during which the offences occurred.

She was the sole director and trainer of WK Events, a Singapore company that ran paid property investment courses.

Kwek drew an annual salary of around S$260,000 from this company.

Upon completing the course, participants would become part of WK Events' investment network and be notified of "property investment opportunities".

The investment scheme

Kwek was first introduced to Desiree Veronica Macpherson and learnt about the Macro investment scheme in August 2014.

Macpherson managed the Macro Group, a network of about 250 companies purportedly in the business of acquiring, managing, and developing real estate in Australia.

One of these companies was Macro Realty Development (Macro SG), a Singapore-incorporated company.

Between 2013 and 2016, the Macro group solicited funds for the purported development of dual-key houses in Newman, Australia.

The scheme raised approximately S$122 million from 1,800 investors worldwide.

Locally, around S$54.7 million was raised from around 643 investors.

The scheme was played out in several iterations, involving the development of different parts of land within Pilbara, a region in Western Australia, and was marketed in various countries, including Singapore, Malaysia, and Hong Kong.

In December 2014, Kwek signed an agreement for GPNI to act as an "introducer" for Macro SG.

Introducers usually signed agreements stipulating that they were to provide introduction services of the scheme to local investors.

As a result, they would get paid commission ranging from 10 per cent to 15 per cent of the total amount raised from investors who enter into a binding loan or agreement with Macro SG.

To get investors, WK Events sent out email invitations to past course participants and Kwek’s property network, inviting them to investment seminars held at their Shenton Way office.

The emails promised a "short-term and low-entry" 12-month fixed investment with "multiple layers of protection".

It stated that WK Events had arranged for a developer to share about a potential funding opportunity in Australia, which related to the provision of housing for miners with "assured 14 per cent to 16 per cent per annum" with an assured exit in one year.

The seminars drew crowds of over 100 attendees each.

Kwek would speak first before handing the floor to Macpherson.

The presentation included representations that the Australian government had invested S$1.7 billion in the region and that "there (was) exceptional capital growth".

The minimum investment was set at S$10,000.

Investors were promised a 14 per cent annual return for amounts up to S$49,000, and 16 per cent for investments of S$50,000 and above.

Using personal influence

During at least one seminar, Kwek told attendees that she had personally visited Newman, Australia, describing it as "the largest estate in the whole of the Pilbara segment for the mining industry".

She also claimed that the government wanted to create more housing for miners, and that she had met up with an Australian member of parliament who had championed the renewal of several cities, including Newman, and that she had seen "very good result".

Kwek ended the seminar saying that investors would have three levels of securities, two levels of guarantors by Macro Developments companies, and one, which is a security deed.

She explained that this was "the reason why this return is considered fantastic already".

She also said that this scheme had higher returns, unlike other projects, which were of "higher risk", and that those who invested S$100,000 would be referred to a Macro Developments representative who would take them on a site inspection trip in Australia.

At least one investor invested in the scheme because he felt assured after Kwek claimed she had personally flown to Australia to inspect the site and had even invested her own money into the scheme.

No MAS license

The Commercial Affairs Department (CAD) revealed that Macro SG ultimately entered into 411 finance agreements with 347 investors through WK Events, raising S$18.45 million.

Under these agreements, investors were framed as "lenders" and Macro SG as the "borrower."

The court said that these agreements constituted "debentures," which are classified as securities under the Securities and Futures Act.

By organising seminars and actively soliciting clients, WK Events was "dealing in securities" which is a regulated activity that requires a Capital Markets Services licence from MAS.

WK Events did not hold this licence, and Kwek did not seek legal advice on whether one was required.

According to CNA, Kwek's defence lawyers argued for a fine of S$150,000 instead of jail time, highlighting that Kwek herself had lost S$100,000 by investing in the scheme.

For consenting to her company conducting a regulated activity without the required MAS licence, Kwek could have faced a maximum penalty of up to three years in prison, a fine of up to S$150,000, or both.