Property agent promoted Australia housing scheme that lost investors S$16 million, gets jail

Property agent promoted Australia housing scheme that lost investors S$16 million, gets jail When the scheme fell through, 347 investors who had entered into finance agreements through introduction services provided by Wendy Kwek Siang Ling's company lost a total of S$16 million. SINGAPORE: A real estate agent who ran paid courses teaching how to invest in property used one of her companies to promote investments in a housing scheme in Australia. However, when the scheme fell through, 347 investors who had entered into finance agreements through introduction services provided by the agent's company lost a total of S$16 million (US$12.3 million). Wendy Kwek Siang Ling, a 55-year-old Singaporean who earned S$2.7 million in commission for her introduction services, was sentenced to three months' jail on Wednesday (Jun 24) for an offence under the Securities and Futures Act. She pleaded guilty to one count of consenting to her company dealing in securities when the company did not have a capital market services licence granted by the Monetary Authority of Singapore for the regulated activity of dealing in securities. The Australian woman behind the alleged ponzi scheme, Ms Veronica Macpherson, was declared bankrupt in 2018. THE CASE The court heard that Kwek holds a Bachelor's degree in business administration. At the time of the offence between January and August 2015, she was a licensed real estate agent and the director of companies including WK Events and Global Property Network Inc (GPNI). WK Events, which Kwek managed and controlled, ran paid courses which Kwek personally taught on how to invest in property. This included a course titled "Property Riches Program" which was advertised on channels including The Straits Times, court documents stated. After her "students" completed the course, they would become part of WK Events' investment network and would be notified of "property investment opportunities". She received a salary of around S$260,000 as the director of WK Events. GPNI was incorporated in Seychelles in 2011 by Kwek and her then-husband to facilitate overseas property deals. There were no employees and Kwek fully controlled the company. From January to August 2015, Kwek gave her consent for her company WK Events to deal in securities in the form of an investment scheme operated by Macro Realty Development (Macro SG), a Singapore-incorporated company. This company was a part of a group of about 250 companies collectively known as the Macro Group, which was purportedly in the business of acquiring, managing and developing real estate in Australia. The group of companies was managed by Ms Macpherson, an Australian. Between 2013 and 2016, the Macro Group solicited for funds which were purportedly for the development of dual key houses in Newman, Australia. Different versions of the scheme, involving the development of land in Pilbara, a region in Western Australia, were marketed in various markets including Singapore, Malaysia and Hong Kong. LARGE SUMS RAISED Between 2013 and 2016, about S$122 million was raised from 1,800 investors across different countries. In Singapore, about S$54.7 million was raised from about 643 investors. Most of the signed agreements were made through companies such as WK Events, which acted as "introducers" of the scheme on behalf of Macro SG. Introducers typically signed agreements to provide introduction services to local investors in exchange for commission or introduction fees ranging from 10 to 15 per cent of the total amount raised from investors. Kwek was introduced to Ms Macpherson in August 2014 and found out about the scheme. She decided to provide introduction services for the scheme through her companies and signed an agreement for GPNI to act as an introducer. The introduction services were provided through WK Events, which organised six investment seminars at its office in Shenton Way from January to August 2015. WK Events promoted the seminars by sending invites to previous attendees of its programmes or those who were part of Kwek's network of property investors. The invites stated that WK Events had arranged for a developer to share about a potential funding opportunity in Australia linked to the provision of housing for miners, with "assured 14 per cent to 16 per cent per annum" The opportunity was for a "fixed 12-month investment term" and "short term funding returns of 14 - 16 per annum with an assured exit in one year". It was described as "short term and low entry levels" with "multiple layers of protection" by an "established development group with proven track record" and backed by two levels of security. About 100 or more people attended each seminar, where Kwek would talk before handing the time over to Ms Macpherson who would introduce the scheme in detail. Representations made during the seminars include that the Australian government had identified and invested S$1.7 billion in three Pilbara cities to revitalise them and that rental yields in Newman were 10.3 per cent compared with 3.8 per cent in Melbourne. The minimum investment was S$10,000, with the cited returns for investments of up to S$49,000 being 14 per cent per annum, while investments of S$50,000 and above were 16 per cent. During at least one seminar, Kwek told attendees that she had personally visited Newman, Australia and described it as the largest estate in the whole of the Pilbara segment for the mining industry. She also said there was a call by the government to create more housing for miners and said she met up with a member of parliament who had championed the renewal of certain Australia cities including Newman and had seen a "very good result". Kwek ended off this seminar by saying that investors had three levels of securities, that the scheme was unlike other projects with higher returns and reiterated the rate of return. The court heard that the investment scheme was a "debenture" and constitutes securities under the Securities and Futures Act. Under finance agreements entered into by investors at the seminars, investors were referred to as "lender", with Macro SG reflected as "borrower". The scheme was also structured for 12 months with investors promised annual returns to be paid at designated times. By organising seminars and actively soliciting investors to attend them, WK Events was carrying on business in "dealing in securities", a regulated activity. This was despite not holding a capital markets services licence granted by MAS. As director of WK Events, Kwek consented to and was directly involved in these activities. At no point did she seek legal advice on whether a capital markets services licence was required for WK Events' activities on the scheme. Under the introduction services provided by WK Events, Macro SG entered into 411 finance agreements with 347 investors, including Kwek herself. Most of them were local. A total of around S$18.45 million including S$100,000 from Kwek was raised for the scheme under the introduction services by WK Events. At least one investor put in money because of Kwek's personal influence and representations that she had flown to Australia, seen the site and had invested her own money. The investors sustained around S$16 million in losses arising from the Macro Group's eventual default on repayments on both interest payouts and investors' capital, after making some initial interest payouts. Under its introducer agreement, Kwek's other company GPNI received about S$2.735 million in commission based on 15 per cent of the total investment value raised. Kwek has withdrawn the entire amount. Earlier this month, she handed over a cashier's order for S$500,000 to the Commercial Affairs Department as voluntary restitution or compensation to the investors. The prosecution sought four months' jail for Kwek. Three other people were fined between S$80,000 and S$120,000 in 2023 for being introducers of the Macro scheme under different companies. Deputy Public Prosecutor Sarah Ong said the harm and culpability were the highest in Kwek's case compared to the other three. Ms Ong said Kwek had played an active role in organising the seminars and reached out to a closed group she had influence over. She also described the returns as "fantastic". Kwek's lawyers sought a fine of S$150,000 instead, pointing out that Kwek had lost S$100,000 herself in investing in the scheme. For consenting to her company carrying on a business in a regulated activity without a capital markets services licence, Kwek could have been jailed for up to three years, fined up to S$150,000, or both.