A Golden Investment That Sounds Too Good To Be True

A Golden Investment That Sounds Too Good To Be True

March 22, 2016 Scams 0

WHEN times are volatile and the economic cycle erratic, investors often turn to gold as a safe investment.

However, unscrupulous companies have now come up with very attractive ways to market gold in the form of coins or bars.

What makes this type of investment attractive or seem safe is not just the returns but the fact that investors are holding on to gold.

Agents for this type of investment would point out that if or should the company go belly-up, the investors would still have their gold coins or bars in hand.

According to a source familiar with such schemes, the gold that was offered to investors was usually lower in value than claimed. He said most goldsmiths would not buy this gold as the purity of the metal was in question.

He added that this was akin to Ponzi schemes as the earlier investors would have a better deal than the ones who come in later.

Starprobe was alerted to a “gold investment scheme” operated by Genneva Sdn Bhd, which was offering investors 50gm gold coins at RM6,500.

A member of the public said the company would pay investors 2.5% of the price of the gold coin and guarantee to buy back the coin at market value after a minimum holding time of one month.

“Initially investors were paid the 2.5% investment on a monthly basis but now it’s every three months because the company claimed the amount of paperwork generated was a hassle,” she said.

“I was approached by one of their agents who claimed to have sold 3kg worth of coins for RM300,000. This was “authenticated” by various photocopied documents,” she added.

Additionally, the company said the coins could be authenticated by Bank Rakyat and that investors could even pawn the coins to the bank at 65% of the value of the coin.

She also said an agent of the company had sent out an SMS with the message that the company was safe in the wake of the Bank Negara investigation into Bestino Group Bhd, a company dealing in gold bars that was being probed for illegal deposit-taking and issuance of redeemable preference shares.

“A check with the central bank’s website did not reveal any information relating to the company,” she said.

A Bank Negara official however told Starprobe that Genneva was not licensed. He could not comment further as no complaint had been lodged against the company.

Bank Rakyat, when contacted, said it was not aware of the scheme.

“We’ve posted notices at all our branches and Ar-Rahnu X-Change that the bank is not involved,” said a Bank Rakyat official.

When contacted, a Genneva official questioned our reporter’s credentials. The official also considered the complaints as not legitimate because they did not come from their clients.

“You’re fishing in very deep waters,” he said before hanging up.

More Reports:
Get-Rich-Quick Schemes Cause RM845m Losses

Losing All In Get-Rich Schemes

Lure Of The Birds And Nest

Advice From A Fraud Lawyer

Investor Alert

Source: Article from the Star Online, 13 July 2009