Friday Sep 14, 2013
"I don't trust you,"
Khin Khin said to
Felix. "So, I ask Dr
Sing to be
involved."
I was not keen on
being involved in
international
property development
between a
Singaporean group
known only to
Freddie and Khin
Khin's Myanmar group
which provides the
land. Felix is a
businessman with the
quadruple bypass
and does not reveal
the name of his
group, only saying
that it is a big
group with interest
in Myanmar property
development in large
projects. This
project was around
US$40 million. Khin
Khin could see the
big money in
commissions but I
don't know the
credibility of the
people involved.
There was Felix as
the front man and he
had told Shirley not
to get me involved.
Khin Khin is an
employment agent but
she has her Myanmar
contacts looking for
Singaporean
investors and joint
ventures.
"This project is a
BOT," I said to her.
She did not
understand.
"BOT means Build,
Operate and
Transfer," I am a
licensed realtor and
so she sought my
involvement. "In
BOT, the Singaporean
party will use his
money to build and
manage the project
for 50 years + 10 +
10 as in the
agreement. After
that the whole
business belongs to
the Myanmar party.
During the
management of the
operations, the
Myanmar party gets a
share of the net
profits."
This was a second
Myanmar development
project from Khin
Khin to Felix. The
first project was a
piece of land for
building a
condominium and
Felix's party was
involved and had
gone to inspect the
site. Felix had
given Khin Khin the
architectural plans
to forward to the
Myanmar party when
she went back to
Yangon last month.
"I threw the plans
into the waste paper
market," she told
Felix when she came
back to Singapore.
"The Myanmar party
did not bother to
see me to take the
plans." Her
philosophy is not to
beg her countryman
by going to the
office to submit the
plans. I would say
that this is not the
right thing to do,
but she did it.
"I don't like
begging the rich
people for favours
as I have to go out
with them for their
personal matters,"
she said to me as I
sent her to the
airport Terminal Two
on Sunday Sep 16,
2013 at 5.30am to go
back to Yangon. Some
Myanmar businessmen
will ask her out for
dinner repeatedly to
talk business but
she would not go.
"How is the rich
people going to be
rich if they don't
get free favours of
time or tasks from
others?" I asked her
as she kept saying
that I do not
understand Myanmar
culture and way of
doing business.
"Singapore also has
cunning businessmen
who cannot be
trusted too," I
said. "If the rich
people pay you for
services, then they
lose a bit of their
wealth. This does
not sit well with
them. It is the
ordinary average
person who pays you
for services done.
But in this
networking, the rich
person will return
you favours since
you have helped them
and they don't
charge you! The rich
people has their
powerful connections
whether they are
Myanmar or
Singaporeans and one
word from them may
help to resolve your
problems. But you
don't want to
socialise with them
by accepting their
dinner invitations
in Yangon, so don't
get involved in
international
property
investments. You may
get zero income
after spending so
much time."
A formal written
agreement to share
the commissions must
be done. "Felix
would have told you
that you would just
get a referral fee,"
I asked her. "Not a
sharing of the
commissions. A
referral fee of a
thousand dollars for
a US$40 million
project."
"Yes, he said that,"
Khin Khin confirmed.
"That is why he did
not want me
involved. He does
not want you to get
your share of the
commissions."
Since Khin Khin
asked me to get
involved, I asked
Felix what this
Singaporean group
would be paying in
commission.
"1% of the land
value," he said
solemnly. "This is
the standard
practice. Some
developers don't
even pay any
commission."
"1% of the land
value at US$20
million?" I was sure
this was not the
standard practice.
"Yes," he said.
I was sure that Khin
Khin's Myanmar group
would not accept
this amount and so I
phoned the agent
after getting Khin
Khin's permission.
I told Felix "It
should be 5% of the
project value which
is US$40 million.
Negotiable.
Certainly if your
group wants just to
pay 1% of the land
value of US$20
million, then don't
proceed."
Felix phoned the
Myanmar agent
directly after Khin
Khin told him that
2-5% is the
industry's practice.
This figure was
given to Khin Khin
by me and since
Felix phoned her
after I had spoken
about 5% negotiable,
Khin Khin revealed
the figures.
Although she had
asked me to deal
directly with
Freddie, she
undermined me by
revealing the 2-5%
figures. So, how
could Freddie
respect her?
Felix told her
arrogantly that his
party would proceed
to inspect the site
and would decide
later. He by-passed
her by direct
communication with
the Myanmar agent.
"That
is what happen when
you sound desperate
and reveal your
contact's telephone
number and email to
Felix, a person you
can't trust. He is a
businessman and
takes your
allegations about
his lack of
integrity with a
smile. For him, it
is the money from
the commissions that
matters, not your
explanations as to
why you want me to
be involved. Now you
have revealed your
source, he just
phoned directly and
by-passed you."
The Myanmar agent
had told her that
Felix phoned him and
emailed him
directly. No copy of
the email was ever
given to Khin Khin.
Property deals are
big money and there
is a lot of trickery
involved in
depriving the agent
of his commission.
In this case, Khin
Khin is not
redundant as she has
the trust of the
Myanmar agent. For
Felix, it is the
closing that counts.
If Khin Khin can't
deliver, he just
deal directly. After
all, he has the
Singaporean group
with experience and
money. It appears so
simple. Or is it?
TOA
PAYOH VETS
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