Investors and traders throng Genneva’s offices following raid by govt agencies
KUALA LUMPUR: Anxious Genneva Malaysia Sdn Bhd investors and trading agents thronged the company's headquarters here in Jalan Kuchai Maju 6 and its Penang hub to find out if their savings were safe in the wake of the raid by several government agencies.
Fears were rife because many of them had invested large sums of money in the company's gold trading scheme.
Shereen Lim, 54, who quit her job as a timber exporter to concentrate on gold trading as a consultant, said she felt victimised after the raid because her main source of income was affected.
“Many of my customers have been using the money from gold trading to support their children's further education, their aged parents or to pay medical bills,” she said.
“This raid is affecting our rice bowl and causing us a lot of hardship.”
The Genneva office remained shut yesterday despite a gathering of more than hundred-strong crowd, most of them consultants.
“Some of my clients are retirees in their 70s and 80s. They have put in their life savings here,” said Pat Lu, a senior consultant who also went into gold trading to fund her son's college education.
“My aunts and uncles are also customers. They buy gold from me, too,” she said, adding that they had been getting monthly returns calledhibah (a discretionary “gift” in Islamic banking).
“I'm wondering when my commission is going to be paid, because my son's fees will be due. If not for Bank Negara's raid, I wouldn't be worrying,” she said.
Another consultant, Moy Fook Thong, 75, said investors trading with the company receive physical gold in the form of wafers a few days after making payment.
However, due to the investigations, many customers and consultants had not been able to receive their gold or commissions, Moy said.
In GEORGE TOWN, Genneva regional director Datuk Joseph Kow held a closed-door meeting with some 100 consultants and investors at the office yesterday, where many of them expressed confidence in the firm's legality.
It is believed that among other things, Kow spoke about the raid on Monday and that more information would be released when company chairman, Tengku Muhaini Sultan Ahmad Shah, returned from London.
Like many of the consultants interviewed, Mazri Mahmood, 41, said the swoop had created many problems for his customers.
“Most of us are worried because the company's bank account has been frozen following the raid. Our transactions have also been interrupted,” he said.
Genneva investors still in shock
PETALING JAYA: Investors of gold trading scheme Genneva Malaysia Sdn Bhd were still in shock a day after an investigative raid on the company.
Anxious and confused over the scope of investigations, hundreds of them converged at the company's headquarters in Jalan Kuchai Maju 6, here, and its office in Penang, demanding answers.
However, Bank Negara Malaysia spokesman Lee Poh Fong said a statement would only be issued after investigations had concluded.
“There is nothing wrong with gold trading but we want investors to be careful against those promising high returns,” she said, referring to a previous press release issued on Sept 5.
According to the Domestic Trade, Cooperatives and Consumerism Affairs Ministry's enforcement division, one of the four government agencies involved in the raid of the firm, the action was in response to numerous complaints by investors.
Division head Mohd Roslan Mahayudin said besides Bank Negara, the lead agency heading the operations and investigations, the ministry had also been receiving complaints over the past four months from people who had allegedly lost their investments.
“The decision to raid Genneva was carried out by a task force led by BNM to probe get-rich-quick schemes,” he said.
Sources familiar with the investigations said the company was being investigated for offences under money-laundering and deposit-taking laws.
Singapore's Commercial Affairs Department conducted a similar swoop on Genneva Pte Ltd's Orchard Towers offices in the city-state on Monday.
Genneva has ceased all transactions pending the outcome of the investigations.
In a public statement posted on its Facebook page and website, the firm urged agents and customers to stay calm while it settled the issues with the authorities.
In GEORGE TOWN, a senior official of the company claimed that Genneva had not violated any laws.
The official, who wished to remain unnamed, said the firm wrote to the Finance Ministry earlier this year for guidance on gold trading and had also given its views on the business.
He said the ministry replied that a meeting would be arranged to listen to Genneva's views and suggestions on gold trading.
“So far, there has been no feedback on when the meeting will be held. We thank our customers for supporting us. We are purely a gold trading company. We will work hard to resolve this matter as quickly as possible.
“We urge our consultants and customers to remain calm for the time being,” added the official.
If deals are too good to be true, think twice
PETALING JAYA: There are many gold schemes available on the market but if the “consultants” offer deals that are too good to be true, the advice is: think twice.
Fund manager Danny Wong said investors should be careful of companies offering double-digit returns with no risk of losses, adding that it was unlikely that a company could get high returns without taking high risks.
“Investors should ask for more information about the companies they plan on investing their money in. Suspicious companies usually won't provide details like papers on studies or analysis,” he said.
Wong said the public should also avoid investing in companies without proper endorsement from Bank Negara Malaysia (BNM) or the Securities Commission (SC).
“A company that is licensed to take deposits or is in investment-related businesses will definitely be listed on BNM and SC websites,” he said.
The list of companies and funds registered with SC are available under the Data & Statistics section of its website (www.sc.com.my).
BNM provides a site (www.bnm.gov.my/microsites/fraudalert) which has guidelines on how to avoid being defrauded by doubtful banking and investment institutions.
The central bank's fraud alert site enhances public awareness on the dangers of falling prey to illegal financial schemes and lists information such as the definition of financial fraud, how to avoid becoming a victim, available enforcement action, how to report a fraud and a Frequently Asked Question (FAQ) section.
The list of financial fraud activities prohibited by BNM includes illegal deposit taking, illegal Internet investment schemes and unauthorised use of credit or debit cards.
“Generally, if the offer is too good to be true, people are advised to be wary and make an effort to verify the validity of the promised high returns,” BNM said on the website.
The site also urges those who had fallen victim to illegal schemes to lodge a police report and file a compliant to the relevant enforcement agency.
It also urged victims to keep all related documents of investments such as bank-in slips, deposit slips, agreements and vouchers received from the company or the perpetrator to enable action to be taken.
Genneva’s Singapore subsidiary raided too
KUALA LUMPUR: The Singaporean Commercial Affairs Department raided the offices of the city state's subsidiary of gold trading firmGenneva Pte Ltd.
In a similar operation conducted by the Malaysian authorities on the same day with Genneva Malaysia Sdn Bhd, department officers were seen carting away cardboard boxes and computer hardware from the firm on Monday.
The police action was the latest problem for the firm, which has been unable to meet financial obligations to customers and agents for some months.
One customer had previously sued Genneva for S$190,000 (RM472,000) and won a provisional judgment in her favour.
Genneva had written to customers and consultants last Friday, saying the directors had discovered “financial improprieties that led to delay in the payment of discounts and commissions and fulfilment of buy-back guarantees”.
It added that the necessary police reports have been filed. It is unclear if the authorities had acted on the firm's reports or of their own accord.
The letter also asked customers and consultants to remain calm and to cooperate with the company to work out amicable solutions, adding that the company is in the midst of negotiating with an external party to assist them through the financial crisis.