British media has reported that EcoHouse, the United Kingdom-based property developer that was selling Brazilian social housing investments around the world, has been under investigation by tax authorities in the South American country for the last eight months.
The Financial Times yesterday reported details of the recent raid by Brazil’s federal police on the company’s headquarters in Natal, Northeast Brazil.
Some 50 police officers and 12 tax officers were involved in the raid, the newspaper reported.
Police said about 2,000 investors in Singapore are thought to have participated in the scheme, with promised of 12 to 20 percent per annum, although PropertyGuru believe the actual number of affected investors from the city-state to be closer to 1,000, although when including investors from elsewhere in Asia and around the world it would well be in excess of 2,000.
Interestingly, Brazil’s tax authority, the Receita Federal, said EcoHouse and its associates had been under investigation for eight months – meaning the company was still selling its products to Singaporeans and others while being investigated.
A spokesperson for the organisation told the Financial Times: “The organisation handled about R$150m over the past five years, with part of this amount passing through companies based in tax paradises and the accounts of institutions and people considered ‘doleiras’ [black market money dealers].”
In a further development, EcoHouse was absent from a government list of construction companies participating in the scheme obtained by a Financial Times’ freedom of information request.
The two state banks leading the scheme, Banco do Brasil and Caixa Econômica, also confirmed they had not heard of the company.
EcoHouse has closed its operations in Singapore, London and Natal, and PropertyGuru was unable to reach anyone from the company for commenton Monday. Most recently staff of the U.K.company were told by Chief Operations Officer Deen Bissessar that liquidation was “imminent”.
In the past the company has said that suggestions of any wrongdoing were: “malicious, inaccurate and fanciful allegations”.
Image: Cover of the EcoHouse sales brochure used to tempt Singapore investors.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.
