Singapore investors in Brazilian social housing developer EcoHouse are becoming increasingly anxious after promised construction updates and payments due during September have not been made.
On September 1 in a statement to PropertyGuru, a spokesman for BLJ, a London-based reputation management firm acting on behalf of the U.K.-based developer, said: “Investors remain the company’s number one priority.
“EcoHouse will issue a direct communique to its investors in the coming week, in order to alleviate concerns created by distorted information, inaccurate reporting, false and unsubstantiated allegations, that are currently circulating in the public domain.”
Nothing was received then, and despite repeated attempts by investors to obtain construction updates and information about when to expect their payments nothing has been forthcoming. One investor was recently told it could be weeks before further official updates are made.
The most recent communication from EcoHouse came after the Brazilian Embassy in Singapore denied all knowledge of the company.
The press statement from the embassy dated August 14, 2014. said: “EcoHouse not registered by Brazil’s CEF as a partner in public housing.
“However, taking into account the relevance of the Singaporean investors’ claims, the Embassy contacted several agencies within the Brazilian Government and was informed that the National Superintendence of the housing programme “Minha Casa, Minha Vida (MCMV)”, facilitated by the state-owned bank “Caixa Econômica Federal” (CEF), has no record of any agreement with any company bearing the name “EcoHouse” related to “MCMV” or to any other federal programme. “
In reply the EcoHouse statement said: “The company has explained repeatedly on the record that it utilises private funds to construct properties and then sell them to Brazilian buyers who qualify for the (MCMV) social housing programme, thereby obtaining 100 percent government-backed mortgages with federal subsidised rates.”
It is understood that EcoHouse was attempting to publish further clarification for its investors and the media based on the statement published by the Brazilian Embassy in Singapore.
PropertyGuru understands that legal action has commenced from a number of Singapore-based investors, meaning any further comments made by either side could be deemed as sub judice or in contempt of court by a judge. Further news updates may be few and far between.
Investors around the world, not only from Singpapore, invested the equivalent of S$46,000 with the promise of as much as 20 percent returns within one-year. PropertyGuru has communications from many investors including from Thailand, Malaysia, Hong Kong, China, the United Arab Emirates, the United Kingdom and the United States, all expressing serious concerns about their investments.
Some investors clubbed together with family and friends to invest in one unit, while others purchased multiple investments totalling S$200,000 each and more.
In early August the developer closed its Singapore offices at Suntec, citing the need to consolidate its global operations from London. The company’s website shows offices still exist in Kuala Lumpur and Shanghai, as well as in London, Brazil and Toronto, Canada.
The company was recently marketing a new social housing project in the south of Brazil called Monte Alegre to global investors, and it also launched a new associated international investment opportunity website.
Repeated attempts for comment for publication from EcoHouse during the last month have been unsuccessful.
Image: Work on phase one of the social housing project had begun at the Bosque development outside Natal, northeast Brazil, in October 2013. © PropertyGuru Group.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
