What can investors do?

DO INVESTORS have any recourse in such cases?

Not much, lawyer Pratap Kishan told The New Paper.

"They can sue the company, but they can't sue the directors as any investment contract they entered into would be between the company and them, and not with the directors."

If the investors sue the company and the case goes to court, investors can get a "judgment in default" if the representatives of the company do not appear.

"But they can enforce the judgment only against the company, not the directors," said Mr Kishan.

He added that concerned investors should lodge police reports so the police can investigate if there is any fraud.

Consumers Association of Singapore executive director Seah Seng Choon, said: "Consumers should be mindful that such investments are not regulated by the Monetary Authority of Singapore.

"So they are not subjected to stringent requirements imposed on regulated investment companies."

As such, the risks can be high, and "risk-averse" consumers should not get involved, Mr Seah added.

In this particular case, consumers should "ensure there is physical wine stored in the warehouse and that the company is transferring title of the products to them when payment is made".

Mr Seah said: "They should also check for other hidden costs such as warehousing and transport to determine the total investment."

Finally, they should also seek legal advice on the documents to be signed, he added.

Other tips from Case for investors:

1. Beware of hype. Seek a second opinion if in doubt. Consumers should familiarise themselves with the type of investments in the market to get the best deal.

2. Read through the agreement's terms and conditions carefully. Clarify if in doubt.

3. State all verbal claims and promises in writing.

4. Never focus solely on expected profits. Pay attention to possible risks and losses.

5. As far as possible, invest with companies that are properly regulated for investment.

This article was first published in The New Paper.