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Wine investors see red

by Cheow Xin Yi 04:46 AM Jun 17, 2011


SINGAPORE - A week after news of a police probe into an alleged investment scam involving Premium Liquid Assets' (PLA) Hong Kong office hit the headlines in the territory, Singapore investors of the locally-incorporated wine investment company are also searching for answers about their investments.


According to an automated reply sent to investors who emailed the company, the Singapore branch of PLA is "currently in the midst of handling a legal issue pertaining to our business partner in Hong Kong".


The email added its Hong Kong office chief executive and director is "suspected of fraud", and the firm's Singapore and Malaysia branches have reported the matter to "relevant authorities and are cooperating with the police and related departments" to resolve the issue.


"With sincere apologies, we are unable to officiate any liquidation or new investment at the moment ... We seek your kind understanding if your liquidation payment has been delayed," said the email.


The email did not name the director in question, who is reportedly missing as Hong Kong authorities investigate a case which could involve more than 400 investors and alleged losses of HK$50 million. The wine investment circles here refer to the man as "Christopher Koo".


When contacted, a Singapore police spokesman said: "It is inappropriate to comment on police investigations, if any."


Investors MediaCorp spoke to have expressed frustration at the uncertainty. One of them, who only wanted to be identified as Francois, said his only point of contact is his PLA broker, who told him to "wait" pending internal and external investigations. The French national said he has invested about S$29,000 in wine portfolios through PLA since 2009.


Although the lights were switched on when MediaCorp visited PLA's Ngee Ann City office on Monday, no one answered the door when this reporter rang the doorbell.


Some investors have turned to legal experts for help. Lawyer Sean La'Brooy, from Wee, Tay & Lim LLP, was approached by about 20 PLA investors on Monday and he is now "exploring legal options" with them. Other investors have held preliminary talks with provisional liquidators and asset recovery firms.


It is believed there are between 100 and 400 PLA investors in Singapore, with investment amounts ranging from between S$7,000 and S$160,000.


The Consumers Association of Singapore (CASE) has received one complaint since March regarding PLA, but the consumer body's executive director Seah Seng Choon said the consumer body does not oversee investment-related matters. Wine investments are also not regulated by the Monetary Authority of Singapore, noted Mr Seah.


A check with the Accounting and Corporate Regulatory Authority (ACRA) showed PLA as a S$300,000 paid-up limited exempt private company which was incorporated in 2005.


The records list a Mr Woo Kuan Yong as a director. When MediaCorp visited his flat on Wednesday, Mr Woo told MediaCorp that he was asked by his step-son, Mr Eldric Ko, to "register the company" but he has never been to the firm's office.


Mr Woo's wife said she last spoke to Mr Ko, who had called from Bangkok in April. She added that subsequent attempts to contact him on his Singapore mobile phone have been unsuccessful thus far.




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The Straits Times

Sep 5, 2011

S'pore investors aim to uncork fine wine profits

Growing number lured by gains of up to 5 times initial outlay, say brokers


By Melissa Tan


A GROWING number of Singaporeans have taken to investing in fine wine, lured by heady profits that can be as high as five times the initial investment cost.


This is according to wine brokers, who say Singaporeans are among their most enthusiastic clients.


Managing director of wine brokerage Australian Wine Index (AWI), Mr Andrew Bassett, said three out of four of his 3,000 clients are Singaporeans.


These include 'many doctors, especially surgeons, lawyers, engineers, even some hawker stall owners and taxi drivers', said Mr Bassett, whose company has $80 million worth of wines stored here.


He added: 'Every day the number (of consumers) is growing... We found that Singaporean consumers have really taken to wine, especially good reds.'


And the rising interest in wines is not for the sake of consumption, but the huge investment returns they can potentially bring.


According to Mr Bassett, a client of his bought a 2005 red Australian Shiraz wine called Mollydooker Carnival of Love for $115 in 2007. A year later, it was worth US$600 (S$720) on the market.


Of course, not all bottles rack up such dizzying returns, but Mr Bassett says wines make decent 'medium-term' investments, and can keep for up to 50 years.


'Our return was 12 per cent to 14 per cent per annum prior to the global financial crisis,' he noted, adding that he asks his clients to invest over a period of five years at least.


A recent auction of some of AWI's Australian wines at China's Guopai auction house in Shanghai late last month fetched gross profits of as high as 52 per cent, despite this being China's first Australian wine auction.


Wine investors buy through a wine brokerage, which typically recommends good investment wines, arranges storage and insurance, and eventually helps sell them.


AWI makes money by taking a commission of 5 per cent on the profit from each wine trade and from buying directly from vineyards, as well as charging a fee for insurance and storing the wines.


The brokerage's minimum requirement for wine investment is a sum of $10,000, but most of its investors put in about $50,000 to $150,000.


But there are risks as wine is not the most liquid of assets, and investors may find it hard to find buyers.


And the price of wine is 'governed by weather, sun and rainfall, and the whims and fancies of wine critics', said local wine expert George Wong.


Investors may see the value of their assets falling, not rising.


Mr Wong noted that Singaporeans also have a strong preference for French wine.


'French wines still occupy the top spot in Singaporeans' perceptions, because of France's long association with wine,' Mr Wong added.


Mr John Kapon, chief executive of New York- based wine auctioneer Acker Merrall & Condit, told The Straits Times that Singaporean clients made up 5 per cent of the company's total sales revenue in Asia over the past three years.


It mainly auctions French wines, which Mr Kapon said make up the 'majority of fine and rare (wine) sales and auctions'.


'Singapore is an exciting market with great potential. It is developing as an offshoot of its incredibly robust neighbour, Hong Kong, and will certainly expand in the years to come,' he said.



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If there are more investors the game will play on.

Too bad the new comers are not able to sustain the momentum.

Just like the European pension funds, where the age limit keeps increasing before drawn down, and even the minimum sum also keep increasing.


So sad....I don't like to be the one holding to the baby when it burst.


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