Tchau, EcoHouse?

The ST reported today that Brazilian property developer EcoHouse has closed its Singapore office. The move came shortly after the firm was put on the Singapore central bank's investor alert list just last month.

 

EcoHouse Group's office on the 42nd storey of Suntec Tower Two was opened with much fanfare in February of last year. The company builds social housing projects for former slum dwellers in Brazil.

 

The latest turn of events has left some of EcoHouse's investors in Singapore worried about whether they will get the returns they were promised. This is after the Brazilian firm had netted millions from investors in Singapore by offering returns of about 20% after just one year, on investment sums as low as $46,000. However, several investors have claimed that they have not been paid despite their contracts having reached maturity.

 

Some Singapore investors in EcoHouse told ST on Friday last week that the firm had not informed them that it was closing its office here.

 

 

The wife and I did a quick search and found that news of the office closure was already reported in The PropertyGuru website some 4 days ago. In a statement released by Chief Operations Officer for EcoHouse Deen Bissessar:
 

"I can confirm that we have taken measures to consolidate into our Brazil operation and managing global affairs from our global headquarters in London.

 

This will not only help to reduce costs, but to fix administrative and communication issues.

 

Singapore investors should ideally view this as a further measure to improve the overall company position, thereby allowing us to complete our contracts with them faster.

 

Their contract is with Brazil and the position remains unchanged. We are doing everything we can to improve the situation with regard to construction and payments."

 

In recent months there have been reports that unsatisfied investors have commenced legal action against EcoHouse for recovery of their capital investments along with promised returns. EcoHouse has previously denied it is in breach of any of its client contracts, although has admitted construction delays have resulted in delayed payments to its investors.

 

Bissessar added that EcoHouse remains committed to its clients. “If that was not the case we would simply shut all doors – which is something we have no intention of doing, he said.

 

He added that all client communications should be directed to sales.support@ecohousegroup.com where a member of the EcoHouse U.K. team will respond.

 

Now that the Singapore operation had suddenly shut its doors, allegedly without much of a notification to its clients, it does not reflect very well on the company's pledge of being "committed to its clients". It remains to be seen how responsive the email communication channel in the UK will be.

 

With this EcoHouse saga, the wife and I believe that the original intention of the project was genuine in nature and purpose. But along the way, it has morphed into a pyramid scheme of sorts. And the reason for the quick exit from Singapore is more due to the impending legal tussle that EcoHouse expects from disgruntled local investors and less because of consolidation. But that's our humble "layman" opinion as per always...

 

 

 

Click on link below to read our previous post on EchoHouse:

http://sgproptalk.blogspot.sg/2014/07/property-investment-in-brazil-ecohouse.html