9% Interest for 1 Year. Good Deal or No Deal?

Recently, Facebook pushed one of the following advertisement to me, an investment offering 9% interest over 1 year period. As a financial blogger, I took a deeper look and decided that I should do a quick review.

The investment is offering 0.75% interest each month for 12 months. The total interest is 9% for a year. The interest will be paid monthly and the capital will be repaid at the end of 12 months. The investment is backed by the company itself and is looking at pooling $10 million worth of investment fund. The minimum amount to invest is $20,000.

This is not their first offering. Their first offering is even higher at 12% for 1 year in November. 

From their website, you can tell that they are trying too hard to portray an image of high net worth investment company.

Using a random stock photo of a Caucasian man dress in suit on their main page? Using a wall street bull icon as company logo? Having the word 'Berkeley' to suggest they are linked to the UK property group? Their contact email is 'concierge@berkeleycapital.co'. Are they running a hotel now?

Just trying too hard.

A quick search shows that they have absolutely no link to the UK property group.

An investment backed by the company itself is only credible if the assets that the company holds are significantly larger than the investment.

The next thing I checked is whether they are a GST registered company. Since they are not a GST registered company, this means that the company taxable turnover is less than $1 million dollars. Would you invest $20,000 into a company which is not even earning $1 million? A company earning less than $1 million is trying to back an investment of $10 millions? 

I did not pay to buy the company information on ACRA so I could not check the paid-up capital for the company. The nominal paid-up capital for a private limited company is $1.

They also have a bunch of random prospectus, announcement and circular of companies on their website which are supposed to be the projects they are involved in, but none of the document mentioned their company name.

On their website, they allegedly listed 2 people as directors of the company. One is the CEO of ANI which I could not find any links to the company online. The other person has a generic name with no portfolio to be linked to any real person. Do request for a selfie with them if you are attending the event.

Lastly, the company is listed on the 'MAS Investor Alert List'.

The risk of the company liquidating is extremely high and shareholders of the company are not liable for its debts and losses beyond their amount of share capital. As a private limited, the company is a separate legal entity from its members and directors.

Without any doubt, this is not an investment where I would be putting my money into. I guess I am probably not their target audience too. Their modus operandi is to reach out to as many people as possible by dangling a very attractive deal. Those people who bite the bait will attend the event. They then sieve the vulnerable out and those are the ones they will be targeting. A 1% success rate is all they need.

Beware of any deals that are too good to be true. Stay safe investing!