The group claimed they invested between HK26,000 (RM15,650) and HK$2.08 million (RM1.25 million) each about nine years ago, on promises of high returns after seven years when the land was to be sold.
However, the value of the property declined instead to about one-seventh of the purchase price, they said.
The group lodged a police report in Dang Wangi last week against the Hong Kong-based First Asia Properties (HK) Ltd and its Malaysian representative, First Asia Properties (M) Sdn Bhd.
They added that they will raise their plight with the Chinese embassy in Malaysia and the foreign ministry.
A spokesman for the Malaysian agent denied the claim that the scheme was a scam. He said the investors were listed as owners in the official Hong Kong land registry.
“This was a legitimate deal signed by them,” the spokesman said. He said the Malaysians were free to sell their land at any time, but believed that the land value would appreciate in about a decade, profiting the investors.
The investors’ spokesman said the Hong Kong company “stopped responding to our queries since 2015”. He said the land is currently priced at about HK$372 (RM224) per square foot, but was sold to them seven to 12 years ago at HK$2,600 (RM1,564) psf.
The Malaysian agent for the scheme said among the reasons for the drop in value was the Covid-19 pandemic, riots (in 2019 to 2020) and the HK government acquiring land to build low-cost homes.
Agricultural land, illegally occupied
The investors’ spokesman said a group of them had found that the land, in Kam Tin, northern New Territories, to be illegally occupied and the tenants were refusing to move out.
“Although the properties are in our names, someone else is collecting the rent,” he told FMT.
The spokesman said a Hong Kong real estate consultant they hired last year found that the property was agricultural land on a renewable 99-year lease from the government.
“It can only be used for agricultural purposes and no buildings or structures can be constructed,” he said.
He said the investors were promised annual returns of 12% for five years; most received payments, but some only for two years.
The spokesman said they engaged legal firms in Malaysia and Hong Kong, who advised them to exit their agreement with the management company appointed to lease and manage the properties.
“The Hong Kong lawyers said we have three options: we can either go to a small claims court, write legal letters of demand, or lodge police reports.”
The lawyers believe the management firm breached its implied duty by failing to keep investors informed, he said. “However, they said some investors may face problems because of a limitation law which bars legal actions after six years,” he said.