Posted By

Tags

Property hawks to the docks

Investigation followed by prosecution with possible prison term awaits those inflating value of properties, according to a Serious Fraud Office (SFO) warning.

Chief Executive Adam Feeley has warned investors to be alert while considering investment in properties or companies with high profile property development portfolios. His warning came on the wake of a number of cases currently under investigation.

Mr Feeley said the SFO was disappointed that many were making bad investment decisions based on information, which can only, at best, be described as optimistic values. “It is imperative that investors are made aware of the underlying assumptions on which the valuations are based,” he said.

Valuation exercise undertaken at the behest of the property owner would be subjective and be inflated beyond reality, investigators say.

According to Mr Feeley, properties had been rated 500% over their market value in some cases.

“Where there is a clear intention to deceive an investor with false information, the SFO will lay criminal charges against all parties to that offence, including any valuer who is knowingly a party to the deceit. However, in many instances, the valuations fall short of what is required to meet a criminal standard of proof for fraud,” he said.

Undoubtedly, the law enforcing authorities, including the Government, have the responsibility to protect investors. As Mr Feeley said, the best protection for persons investing in property was to commission their own valuations.

But SFO recognises that this may not always be feasible.

“An important part of our role is to identify alternative forms of redress where the conduct complaint does not meet the criminal standard of proof. The SFO is making referrals to the Valuers Registration Board in respect of some transactions, while some matters are under consideration,” he said.

As is often the case, a small number of fraudsters undermine the system and public confidence.

The New Zealand Institute of Professional Valuers is committed to healthy practices and would welcome any information on individuals or institutions perpetrating fraud.

-Venkat Raman

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Share this story

Related Stories

Indian Newslink

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement