Gold-trading investment company Genneva Sdn Bhd, which is under investigations for malpractice and other trading violations, had liabilities that exceeded its assets by 10 times, said Bank Negara Malaysia (BNM).
BNM said it has already uncovered “considerable losses” experienced by the company in 2012. The central bank released a joint update yesterday on investigations that it is conducting along with the police, the Ministry of Domestic Trade, Cooperatives and Consumerism and the Companies Commission of Malaysia.
It said that based on documentation seized from the company, more than 8,000 customers who have already collectively paid for 4,000kg of gold have not received their order. Genneva also owes RM80 million to customers who have surrendered their gold to the company but have not received their cash.
According to BNM, the company's method was to sell gold to customers at 20% to 25% higher than the market price but in return, promising customers a guaranteed return of 2% to 3%.
The central bank said this practice is not sustainable and the company's cash-flow was sustained from money collected from new customers.
In November, Deputy Finance Minister Datuk Seri Dr Awang Adek said Genneva could have raised as much as RM10 billion from 35,000 investors and that authorities have so far recovered RM4 billion in cash and bank accounts from investigations.
Genneva was just one of several companies conducting such trading that are being investigated. Among the other companies that were raided by BNM in October include Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd, which were all gold-based trading companies.
Customers have inundated the authorities with appeals to release some RM99.8 million of funds and 126kg of gold that were secured as evidence against the suspected parties.
BNM said the monies and gold were required as part of its investigations and will only be dealt with at the direction of the courts.
By Ranjit Singh
No comments:
Post a Comment