A story of the Celtic Tiger

[Declan]

By Fiach Kelly

Wednesday November 11 2009

FATHER-of-three Alan O'Neill remortgaged his home and ploughed his pension, personal savings and money set aside for his children's education into the Dubai scheme.

The ice salesman, from Ballycullen in south Dublin, travelled to Dubai before committing his money. He liked what he saw and hoped the investment would yield cash for his family's future. But now he has no idea where the €440,000 he put into the scheme four years ago is, or what it has been used for.

"I read about it in the papers and it sounded interesting," he said. "I went over and I was just sold on the Larionova idea and the concept.

"I've invested in four different properties with Larionovo. The first one was International City, which is now completed and I still don't have deeds or keys for it. I've seen the end product, the site. I've bought in Sports City -- Westgate is 60pc paid, again through Larionovo and Profile. The third property I bought was Snowdome through Larionovo and Profile and 32 group, which is 50pc paid.

"I've a €10,000 deposit paid on another one -- the Waterfront -- to Larionovo. I have no idea where that has gone."

He returned to Dubai again last year to see what progress had been made on the developments.

"I was over there twice last year and they were just up to sub-floor level. There were no problems at the start and all the indications were fantastic until Larionovo disappeared overnight.

"The last contact I had was around nine or 10 months ago and I've been trying to email them and had people email on my behalf but there's been no joy.

"I'm planning to go over there in December to find out for myself. I don't think it will be completed. I'd like my money back at the moment because I really need the cash at home."

[Lone Shark]

In fairness, that's just a story of greed. The man took a punt on something with money he couldn't afford to lose, and it worked out very badly. I feel sorry for him, and my heart goes out to his kids, but that's nothing to do with the Celtic Tiger - get rich quick schemes have been around since time immemorial.

The thing that annoys me is that there is so much regulation on a bookies, and yet stuff like this is considered "investment" (read: legit).

[ludermor]

This was just sheer stupidity! And then they go on the national media and broadcast how stupid thye were.

[brokencrossbar1]

I was going to say the same myself.  Also, to be honest if it was me and I had invested nearly half a million in a deal I would being over there sitting at the front door to the site.  If he hasn't had any contact in 9-10 months it is his own fault for not jumping on a plane or doing whatever was necessary to sort it out.  As you say you have to feel sorry for the family but he got caught up in the spinning, greedy world and got his ass chomped. Sort out your own house and don't go crying to the press to pressurise someone to give you a dig out!

[Declan]

Interesting that you don't think its linked to the old Celtic Tiger LS. I'd have thought it symptomised the whole madness myself

[Gnevin]

Never invest what you can't afford to lose and never put all your eggs into one basket.

[Donagh]

He couldn't have looked too far. The first Google hit:

"Please be advised that Paul McCann was appointed Provisional Liquidator of Larionovo Limited on Tuesday 25th November 2008.  If you have invested in a property through Larionovo Limited, please see the below contact details for your development. If you have any further queries, please contact larionovo@grantthornton.ie.

Dubai investors (excluding investors of Zero Five Zero Limited developments)

For any queries regarding your development please contact Shirley in Profile at ph: 0097143511107 or fax: 0097143518885.

Escrow accounts

For investors in Sports City wishing to find out the status of their funds they need to contact Dubai Islamic bank. They are the escrow agents for the developments in Sports City.  Investors need to give their name and the unit number in the development and the bank will verify the funds.

DIB bank can be contacted at:  Customer Service Desk: Tel: +971 4 2075885
Fax: +971 4 2075133 E-mail: escrow@dib.ae"

The second Google hit:

http://www.google.co.uk/search?q=Larionovo+&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-GB:official&client=firefox-a

Would tell him that Larionovo going bust shouldn't affect his investment as "All contracts should be with the developers from whom the property was bought and so, presuming the developers are capable of building the projects, should still complete."

Sounds like he just wants his money back.

[Lone Shark]

Interesting that you don't think its linked to the old Celtic Tiger LS. I'd have thought it symptomised the whole madness myself

I'd agree that there were a lot more tales of this kind of lunacy in Celtic Tiger Ireland, and looking at how we plan on dealing with these things now, there'll be twice as many in the future as the message appears to be that those who minded their money and saved, will now be taxed to the hilt in order to keep the Celtic Tiger Cubs in the houses that they couldn't afford in the first place.

Nonetheless I think a lot of the Celtic Tiger damage was done by people losing the ability to think objectively, and acting out of a combination of peer pressure and a fear of being left behind. Many people piled into the get-rich-quick pyramid scheme that was property for investment purposes, but most of those who have been burned were those who worried about getting left behind in the rush to get on the "property ladder" (whoever heard such nonsense?). Shite like "Rent is dead money" was peddled to the point where it became accepted as the truth, and people stopped thinking.

However there is a difference between that and somebody who literally went all Kipling on it and consciously risked their entire life savings on one game of pitch and toss, like this guy did.

You're probably right that the culture was there to allow this stuff to thrive, but it was still a big jump from your standard Celtic tiger stuff.

[the Deel Rover]

Would you think of buying a property now lone shark ?

[Lone Shark]

Would you think of buying a property now lone shark ?

Seeing as I've lost my 9 to 5 job and am freelancing, not personally. If I was advising someone else, I would say the same thing I always have - the long term value of a house is roughly four times the annual income of the type of person you would envisage living there. (It used to be three but some allowance should be made for most families now being dual income) If you look at a house and it looks like the kind of place that a doctor would live in, then it should cost four times a doctors wage. If it's the kind of place that a manual labourer would usually live in, then it should cost four times that wage. That's where it's going, and anything over that price is froth which will be blown off eventually.

The wild card is of course if you have a young lady getting nesty. That's when you might have to overpay, for the sake of a quiet life.

[Canalman]

One very small benefit to our recent woes is that you don't have to listen anymore to people yapping on about their apt/villa in Spain, Turkey, Cape Verde, Transylvania etc etc.