Thirty-three Singaporeans of Indian origin are crying foul, over a SGD 7,80,000 investment in undeveloped land in Chennai, according to media reports.
The group of 33 had bought 45 plots of land, each a few thousand sq ft in size, in Chennai. The investors were drawn by visions of gleaming villas, upcoming infrastructure and returns of more than 100%, on investments made between 2007 and 2011.
However, they are now crying foul at the Singapore-registered KMGM International, which sold them the land. They own land of questionable value, which is hard to sell as it has not been developed and has hardly risen in value, reported The Sunday Times. Consequently, the investors want to sell the land back to KMGM.
About 20 of them staged a walk-in on May 5, 2016, to confront KMGM director S Gulam at the firm’s premises in Singapore, demanding assurances that they could sell back their land.
Gulam was not there, but assured them by telephone that he would meet them on May 16. On May 13, the investors received letters, saying that the matter would be handled through his lawyers at Advaitha Law Corporation, according to the Singapore weekly.
Advaitha’s director, GB Vasudeven, told The Sunday Times that his client was ready to obtain valuations for each of the investors’ land parcels, but declined to disclose any further course of action.
He added that he has written to the 33, to say that if they try to enter KMGM’s offices again, they will be reported to the police as trespassers. Twenty investors have since gone on to make police reports against KMGM.
Mostly in their 50s and 60s, the investors said they trusted KMGM, because it is a Singaporean firm and its directors, lawyer R Kalamohan and Gulam, a former journalist, are well-regarded members of the Indian community.
No development on the land plots
Retired navy officer Anandam Thomas, 62, bought two plots of land for about SGD 41,470 in 2008. “My father was from India and I wanted a little piece of India for myself,” he said. After payment, he and the other buyers were flown to Chennai to see the land and to receive its sale deeds.
Last year and in April this year, he went back on his own to check and found that the land was still undeveloped and occupied by squatters. After his attempts to sell the land back to KMGM failed, he decided to gather fellow investors in the same situation.
Gulam, 54, told The Sunday Times by telephone that he was not out to cheat anyone and meant to help the investors sell the land. However, he said that it was impossible to sell it at a profit right now, as the Indian rupee had fallen drastically in the last few years and the property market was in a slump.
“When you invest overseas, you must take a risk. If you buy a house now and the price goes down, can you tell the developer you want your money back?” Gulam was quoted as saying.
Of the 45 contracts among the group, 24 had a clause guaranteeing they could sell the land back to the company after three years “at the best prevailing market price”. However, 27 contracts lacked a ‘patta’, an Indian land ownership document.
New Delhi-based lawyer, Alok Tewari, a senior partner with Indian law firm Kochhar & Co, said, “Legally it may be possible to sell the property without a patta.” He added, however, that sometimes the authorities may demand to see a patta to register a sale deed.