Press Statements by Bank Negara Malaysia on Genneva Malaysia and Other Gold Trading Firms
Today is day 10 since the Bank Negara Malaysia(BNM) led a raid on Genneva Malaysia Sdn Bhd.
At the same time, Bank Negara Malaysia issued a Press Statements on “Update on joint raids conducted by enforcement agencies on companies suspected of conducting illegal investment schemes using gold”
The joint press release between the Attorney General’s Chambers, the Royal Malaysia Police and Bank Negara Malaysia said the gold trading firms are suspected of operating illegal investment schemes using gold.
On last Friday, another three gold trading firms i.e Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd. were jointly raided by the police, Bank Negara and Ministry of Domestic Trade, Cooperatives and Consumerism for suspected offences that include illegal deposit-taking, money-laundering, tax evasion and avoidance and false description.
In total four were raided i.e Genneva Malaysia Sdn Bhd, Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd.
I read in The Edge today that the chances or probability for the investors to get back their frozen golds or money is very slim.
This is because those who invested on Genneva(using old company name) last time, their monies were still frozen pending investigation.
Anyway, I hope the Bank Negara Malaysia able to resolved this case as soon as possible. This will then allow the freeze on the company’s account to be lifted and enabling all investors to withdraw their money and gold.
Press Statements by Bank Negara Malaysia | Central Bank of Malaysia:
1) Update on joint raids conducted by enforcement agencies on companies suspected of conducting illegal investment schemes using gold
The Attorney General’s Chambers, the Royal Malaysia Police and Bank Negara Malaysia, would like to provide the following update on the recent raids against companies suspected of operating illegal investment schemes using gold.
These raids were conducted in the interest of protecting the investors as well as the public at large from falling victim to illegal schemes.
Based on surveillance and examination conducted on these companies, it has been discovered that these companies are operating schemes that are believed to be not sustainable to provide the promised high monthly returns, nor would they be able to provide the buy back guarantee of gold.
Such schemes are not sustainable because the returns promised are not funded through gold trading, but from the monies invested into such schemes. The investigations have also revealed that the amount of assets and monies held by these companies do not commensurate with the amount collected from their investors.
Prior to the joint raids, it has been noticed that these companies have delayed in returning gold or money to the investors within the stipulated time as promised. Such signs are early warning indications prior to the collapse of such schemes that would result in significant losses to investors.
For more information, members of the public may contact the following:
BNMTELELINK (Customer Contact Centre)
Tel: 1-300-88-5465
Fax: (03)2174 1515
The Attorney General’s Chambers of Malaysia
The Royal Malaysia Police
Bank Negara Malaysia
Bank Negara Malaysia
10 October 2012
2) Update on the Joint Raids on Genneva Malaysia Sdn Bhd, Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd
Following the joint raids on Genneva Malaysia Sdn Bhd, Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd by the Royal Malaysian Police, Bank Negara Malaysia, Ministry of Domestic Trade, Cooperatives and Consumerism and the Companies Commission of Malaysia are mobilising the necessary resources to expedite the investigations into these companies.
These companies are being investigated jointly by the relevant enforcement agencies for suspected offences among which include illegal deposit taking, money laundering, tax evasion and avoidance, misrepresentation including false description and appointment of agents without licence.
The assets and the accounts seized and frozen arising from the raids are preserved for the purpose of facilitating investigation into the suspected offences and to protect the interest of the investors.
Any enforcement actions by the relevant authorities on unregulated financial and investment schemes are carried out to protect members of the public from risking their hard earned monies. Members of the public should be cautious of investment schemes that promise high returns over a short period of time with an arrangement that guarantees the return of the principal amount invested.
Members of the public are advised to check with the relevant authorities when dealing with companies or individuals offering seemingly attractive business opportunities or financial services that are not licensed by the authorities.
For more information, members of the public may contact the following:
BNMTELELINK (Customer Contact Centre)
Tel: 1-300-88-5465
Fax: (03)2174 1515
Bank Negara Malaysia
The Royal Malaysian Police
Ministry of Domestic Trade, Cooperative and Consumerism
Companies Commission of Malaysia
Bank Negara Malaysia
08 October 2012
3) Joint Raids on Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd
Joint raids were carried out today on Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd by the Royal Malaysian Police, Bank Negara Malaysia and the Ministry of Domestic Trade, Cooperatives and Consumerism for suspected offences among which could include illegal deposit taking, money laundering, tax evasion and avoidance, false description including misrepresentations and appointment of agents without licence.
Members of the public are advised to check with the relevant authorities when dealing with companies or individuals offering seemingly attractive business opportunities or financial services that are not licensed by the authorities.
Members of the public are reminded to be cautious in investing in unregulated schemes. The enforcement agencies will take action on illegal financial schemes to protect the interest of the investors and the public at large.
For more information, members of the public may contact the following:
BNMTELELINK (Customer Contact Centre)
Tel: 1-300-88-5465
Fax: 03-2174 1515
The Royal Malaysian Police
Bank Negara Malaysia
Ministry of Domestic Trade, Cooperative and Consumerism
Bank Negara Malaysia
05 October 2012
Consultants and investors show support for Genneva
As at 9:30pm on 10/10/2012, there 4,599 likes in the Genneva Malaysia Supporters’s Facebook group. The number of likes keep going up.
This is a platform to gather all the Genneva Malaysia Consultants, supporters and investors in one place. The group seem to be very active with many updates and videos.
In the about section it stated that “We are the Supporters of Genneva Malaysia Sdn Bhd, the world’s most innovative gold trader who cares for the people from all communities and from all walks of life. This is where 1Malaysia is. Genneva Family walks the talk.“
Where as in the Description section it stated that “GENNEVA MALAYSIA SDN BHD DID NOTHING WRONG. We are happy and satisfied customers, very grateful to the company for sharing their profits with us since 2010. We have no complaints as we received our dues as promised. GENNEVA is the company we trust to buy gold from with our hard-earned money. 30-odd complaints does not represent the 60,000 of us. Thus, the raid by Bank Negara Malaysia is uncalled for.
FYI, we the customers were informed by GMSB management last week of September that we will get our gold, hibah and commissions this week (1 October onwards). Bank Negara Malaysia raided Genneva Malaysia Sdn Bhd and froze GMSB’s bank account on 1 October. More than 60,000 livelihoods and families are affected.
Genneva Malaysia Supporters will be organizing a MARCH TO PUTRAJAYA to visit the Prime Minister Najib Tun Razak if no concrete solution is forthcoming by the end of two weeks, as stipulated by BNM to complete their investigation.”
Note from the Genneva Malaysia Sdn Bhd’s Management to To all their Valued Customers and Consultants
From the bottom of our hearts, we THANK YOU for all your expressions of love and support as seen at Genneva Malaysia Supporters Facebook -facebook.com/GennevaMalaysiaSupporters
As our computers and server were also seized on 1 October 2012, we are unable to reach all our consultants and customers nationwide. Please tell everyone to remain calm while the investigation is ongoing.
We hear you, our trusted and loyal customers and consultants. Much as you push us to call for a press conference to explain matters and to clear Genneva’s good name, we will abide by the law not to make any statements within the 14 days period of investigation.
Please be assured that the Board of Directors and Management are doing their level best to resolve this matter as soon as possible.
In this trying time for all of us, lets stay together as one Genneva Family and pray for a positive outcome.
We sincerely apologise for all the stress and inconveniences caused to you and your loved ones.
Thank you.
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What’s next for Genneva Malaysia?
AS the multi-agency probe on Genneva Malaysia Sdn Bhd and three other gold investment companies proceeds, the authorities are increasingly specific about what they’re looking into and what they have found.
On Oct 1, after the police, Bank Negara, the Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia carried out joint raids on several premises of Genneva Malaysia and on the homes of its directors, the press release only said these actions were for “suspected offences under the laws administered by the respective enforcement agencies”.
Four days later, the agencies listed the suspected offences as illegal deposit taking, money laundering, tax evasion and avoidance, false description (including misrepresentations), appointment of agents without licence, and failure to lodge statutory documents.
The agencies issued another statement on Monday, apparently to explain that the assets and accounts seized and frozen following the raids on the four companies “are preserved for the purpose of facilitating investigation into the suspected offences and to protect the interest of the investors”.
There was also some tweaking of the suspected offences. The statement doesn’t mention failure to lodge statutory documents. Instead of “false description including misrepresentations”, it’s now “misrepresentation including false description”.
The latest update at the time of writing, issued on Wednesday, shows that there has been significant progress since Oct 1.
For one thing, the Attorney-General’s Chambers, the department headed by the Government’s principal legal adviser, has joined the enforcement action against Genneva Malaysia and the three other companies (Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd).
Judging from Wednesday’s joint statement, the Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission are no longer part of the probe.
However, the involvement of the Attorney-General’s Chambers probably means that the Government is already evaluating the possibility of going to court as the next step.
It’s also telling that the statement describes the four companies that have been raided as being “suspected of operating illegal investment schemes using gold”.
It’s the first time that the authorities have been explicit about their belief that the money that these companies collect from customers is not channeled towards licensed investments activities.
“Based on surveillance and examination conducted on these companies, it has been discovered that these companies are operating schemes that are believed to be not sustainable to provide the promised high monthly returns, nor would they be able to provide the buy-back guarantee of gold,” the agencies said in their joint statement on Wednesday.
“Such schemes are not sustainable because the returns promised are not funded through gold trading, but from the monies invested into such schemes. The investigations have also revealed that the amount of assets and monies held by these companies do not commensurate with the amount collected from their investors.
“Prior to the joint raids, it has been noticed that these companies have delayed in returning gold or money to the investors within the stipulated time as promised. Such signs are early warning indications prior to the collapse of such schemes that would result in significant losses to investors.”
Given what the police, Bank Negara and the Attorney-General’s Chambers have said to date, it’s hard to imagine Genneva Malaysia going back to business as usual.
That’s a horrifying thought for its customers and consultants, said to number in the tens of thousands.
Many of them have been highly vocal and visible in expressing support for Genneva Malaysia and in appealing for the return of the money due to them.
Enforcement matter
The first of these two issues is an enforcement matter. After wrapping up their investigations, the agencies will decide whether there’s any wrongdoing and if so, whether there’s sufficient evidence to initiate prosecution.
That decision may come soon. The agencies have twice assured that they are “mobilising the necessary resources to expedite the investigations”. If Genneva Malaysia and its officers are dragged to court, it’s up to them to contest the charges.
The consultants and customers will definitely be watching closely.
The second and more immediate issue the consultants and customers’ anxiety that they may not get back their money will of course hinge on the conclusion of the Government’s enforcement action.
Such uncertainty is stressful and painful, particularly for those who have at stake money that they simply can’t afford to do without.
There’s little solace for these people as long as they have no access to their funds handled by Genneva Malaysia. The freezing of assets and accounts is an unfortunate but necessary part of such investigations.
The next best thing is to know when, if ever, they’ll be handed back the money. However, nobody can provide that information anytime soon.
Lessons from the past
Meanwhile, it may be useful to study the case of the Swisscash investment programme, an Internet-based scam that drew civil action by the Securities Commission (SC) in 2007. But before that, Swisscash-related websites had been flagged by the SC as unauthorised investment websites.
In September 2006, the SC and Bank Negara issued a joint press release to warn Malaysians against investing in the Swisscash programme, which claimed to have invested in equities, commodities and foreign exchange, and offered returns of up to 300% within 15 months of investment.
To stop the defendants from holding out as fund managers and investment advisers without a licence, the SC filed a civil suit in June 2007 against three Malaysians and four companies controlled by one of the three individuals.
The regulator also obtained a worldwide injunction to prevent the Swisscash operators from disposing their assets, and to compel them to disclose details of their assets, companies and bank accounts.
In September the following year, the SC obtained judgment against the defendants in the amount of US$83mil and such further amounts as may be traced for payment.
A November 2009 settlement between the SC and two Malaysian defendants paved the way for the compensation of Swisscash investors, using the eligibility and payment criteria and payment ratio approved by the Kuala Lumpur High Court.
These criteria were recommended by the SC and PricewaterhouseCoopers Advisory Services Sdn Bhd, the Administrator appointed by the SC to manage the restitution from a pool of funds amounting to RM32.7mil.
One criterion was whether the investor was actively involved in recruiting others, in which case he was considered as abetting the scheme. “Any investor who was also involved in the scheme as a recruiter or an upliner would not be eligible to claim his money back,” says the SC in its website.
The Administrator received 22,780 claims, totalling approximately RM188mil, from Malaysian and foreign investors.
According to the SC’s Annual Report 2010, RM30.53mil was paid to 19,625 eligible claimants. The payout rate was 20 sen to the ringgit. By the end of 2010, the Administrator had effected restitution to 99.1% of the total eligible claims.
Considering these numbers, the Swisscash case is not exactly a source of comfort and optimism for the Genneva Malaysia consultants and customers. The SC’s actions here show that it’s a long, hard road towards getting back money albeit merely 20% of the original sum invested in a too-good-to-be-true scheme.
Swisscash ought to be a cautionary tale about the need to truly be sure about the transparency and regulatory aspects of an investment scheme. Sadly, not many people see it that way.
Those involved in Genneva Malaysia are likely to say their case is completely different. Let’s hope they are right.
Executive editor Errol Oh wonders about Switzerland-linked names for investment schemes. Genneva reminds us of Geneva, Switzerland’s international financial centre. As the SC noted in a court document for the Swisscash case, “Switzerland is world famous in financial matters and noted for its sophisticated financial standing and integrity”.
fr:biz.thestar.com.my/news/story.asp?file=/2012/10/13/business/12167213&sec=business