From BNM: http://www.bnm.gov.my/index.php?ch=en_fina...eralert&lang=en

Why should consumers be careful when dealing with unregulated entities or persons?

Consequences:
Consumer protection under the laws administered by BNM IS NOT APPLICABLE should the members of the public choose to deal with the illegal financial service providers.

Members of the public who participate in the illegal financial activities could also BE CHARGED under the law as abetting the operators of such illegal activities.

=========================

With reference to above BNM warnings, "members of the public" could mean previous customers, and/or sales agents... so now you have no worries whether BNM will take further action since you did not join; and can sleep easily at night.

many still cant sallow the truth pill.

they still got a week(s) time before they (BNM) come and announce, so TECHNICALLY there is still some HOPE ........ this is the arguement for few forumers friend ---

ask them to watch this. and try to relate what happening.

This was a comment made by Richard Chew on the Genneva Support group Facebook site which got deleted within a few minutes. I like to share his comment because I found that he explained the whole Scam very well.

"I can understand all the frustration that is being aired here. And it appears Genneva has been deliverying what they promised but forced to freeze their activities. .

However let me explain my view on the technical flaw in this scheme that warrants BNM to take such drastic action. My intention of giving my view is to help enlightened and hopefully will help many here to ask the right questions and direct it to the right party.

In any trading; there must be willing buyer & seller for a transaction to take place at a price agreeable by both parties. The seller will profit from the transaction and the buyer will receive the goods / service. Very clear cut exchange.

However in this scheme, technically the seller do not 'realized' its profit yet from the transaction because there is a contractual obligation that a monthly 'gift' of 2-3% is given to the buyer and the buyer has the option to sell back the gold at the original purchased price. In this aspect, the seller's obligations to the buyer becomes a Liability to the seller. To put it in another words, it is the buyer that will receive the profits rather than the seller in this transaction scheme.

Therefore technically this transaction scheme cannot be deemed as trading because the seller doesn't profit from the goods sold. If it is not trading then where does this lead to?

My next statement may sound absurd and may anger many of you here but please bear with me. My intention is to explain so we can have better judgement & help us understand why Bank Negara has to step in and take drastic measure.

I am saying this scheme is not trading because it is more inclined to money lending business which must be regulated under our Malaysia law. Yes, I just said it; this Genneva scheme is basically a money lending scheme misrepresented as gold trading scheme.

How can this be? You may say there is a sales purchase agreement and gold transacted then how can this be money lending? If its money lending scheme then who is lending to who?

In this scheme, you are the lender. Genneva is the borrower. You bear the financial risk, in return Genneva pays you the monthly interest as we know it as Hibah. At the end of the loan contract, Genneva returns the money to you. During the contract, you keep the gold bar as your collateral if in the event Genneva fails to pay; you don't loose the full amount lent to Genneva.

If the deal is purely buy & sell with no contractual obligation; then it is clear curlt trading because seller profits and buyer keep the goods. But if there is a contractual obligations for monthly interest & buy back then it is surely money lending, the gold serves as the collateral; the lender profits and the borrower bears the liability.

This issuance of collateral gold is somewhat similar to companies issuing bonds to raise fund from the public. Bonds are meticulously regulated by Securities Commission & Bank Negara because it has to be secured against the company assets such as properties and etc.

The problem with Genneva is that they are not regulated and when they have more buyers (lenders) they are actually increasing the liabilities of the company while profit is not realized yet.

For a typical trading company, the more customers; the more goods trade out, the more profits realized. Clear cut profit realization. For example RM 1 billion of gold sold would generate certain amount of profit based on the profit margin.

However Genneva's scheme, the more gold sold the more liability it creates for the company because of the obligations to buy back and pay the monthly gift. Therefore Bank Negara had to step in to ensure things are in order and to prevent it to get out of control. A small complaint would suffice to fuel the urgency for drastic action.

It is harsh but neccesary."

hmm... I wonder why is that, is it the same reason as to "protect" it's investors? or is it really about Money Laundering...

Yup

so how was it? Raid of Genneva was a misunderstanding or right action?
lol TLDR, pls tell me.

This is the latest article from NST

"IN VIOLATION- Genneva business worth RM5.3million against Islamic law, alleges Muslim consumer group

KUALA LUMPUR: FOUR police reports have been lodged against Genneva Malaysia Sdn Bhd over gold trade worth RM5.3 million.

It was understood that one of the reports was lodged by the Muslim Consumers Association last month, alleging that the company's gold trading business had violated Islamic law as mentioned by the Fatwa Committee of the National Council of Islamic Religious Affairs Malaysia (NCIRAM).

The report was lodged at the Ampang police headquarters.

An association spokesman said the report was lodged after they received almost 30 complaints about the company from investors since May.

Meanwhile, three other reports were lodged by investors, including a 44-year-old manager from Singapore.

It is learnt that the woman, who bought gold bars from Genneva Pte Ltd in Singapore in 2009, had wanted to take out her gold bars from the company upon maturity.

The woman further claimed she sought the help of her consultant but was given the runaround.

After much pestering, the woman was told that the gold bars were kept at the Genneva Malaysia Sdn Bhd office in Jalan Kuchai Maju 6 here.

Meanwhile, another complainant, a technician in his 20s, claimed that he bought 150g of gold from the company for RM29,700 in May. He got the gold bar and received three months hibah (gift) from the company.

The company, however, failed to pay him back his money when he returned the gold bar to them last month. He lodged a police report after waiting for almost a month.

The last report was lodged by a 44-year-old self-employed woman who had bought gold bars worth RM260,000 at the end of last month.

She was shocked when she found out the company's business dealings were not endorsed by Bank Negara.

Sources said all police reports have been referred to Bank Negara for further action.

The gold trading company is believed to be under investigation for alleged illegal money taking as well as under the Direct Selling Act.

NCRIM in July issued an edict against transaction or investment with Genneva Malaysia Sdn Bhd stating that such transactions violated Islamic laws.

Its chairman, Professor Emeritus Tan Sri Abdul Shukor Husin, told Bernama that Bank Negara had attested that the company's transactions and investments did not fully comply with the Gold Investment Parameters recommended by the 96th Fatwa Committee of the NCIRAM Conference in June."

- New Straits Times

DID SOME OF THE GENNEVA SUPPORTERS SAY THERE WERE NO CMPLAINTS VS GENNEVA?

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Added on October 6, 2012, 1:49 amSome comments on Richard Chew's post.:

1. It is money lending when looked at from the point of view of one investor lending to multiple borrowers. But this borrower Genneva borrows from 60,000 lenders. So looked at from GENNEVA'S point of view it is the converse of lending, which is DEPOSIT TAKING. But for deposit taking you need a licence from Bank Negara. Without licence Bank Negara WILL RAID THE OPERATION AND CLOSE IT DOWN ! This is what happened to GENNEVA1, GOLD LABEL, ETIKA EMAS, BESTINO.

2. But this deposit taking operation seems to be an extremely disadvantageous one for GENNEVA. Take 100 units cash, got to use 80 units to buy the gold, left with only 20 units, BUT STILL PAY THE HIBAH AT 2% OR 3% PER MTH ON THE FULL AMOUNT OF 100 units !! They are paying hibah and commissions at the rate of 168% to 228% pa on this miserable 20 units the squeeze out of the deal. (See the recent YEE YEE FATT post above).

3. GENNEVA has a paid up capital of only RM50,000 !! Might as well be ZERO !!

4. GENNEVA masterminds NPW, MY, and CWL already facing charges under Genneva1 operation !!

5. Is it wise to put your money on deposit with such a co in these circumstances?


This post has been edited by scorpio55: Oct 6 2012, 01:55 AM

I'm sharing this on my FB page for sharing and discussion and highlighting certain flaws.

Who is this Richard Chew, I want to give him a HI-five.

BNM did the right thing in raiding. The gold "trading" was a disguise.

-edited- wrong post

This post has been edited by idoblu: Oct 6 2012, 06:29 AM

Thanks for the compliment

I can sound like a lawyer and engineer too

Excellent description!

i too was approached few months back on this genneva business, i was almost tempted into it, but then my brain kick into action. to be honest, when i first heard of it, i already know something wrong. How can a company justify giving out such a big amount of cash back, 2-3% every month.. that would be 20-30% per year. and they're not even selling anything? seriously if ppl would think bout it, makes no financial sense at all. Have the invested thought how would Genneva be making money to give u those 2-3%? saying so, i pity a lot of ppl whose money are already invested into it (i think this is enron malaysia already). Hopefully the government can find a good solution to give back the real investor their money.

See today's news, it seems many people cannot swallow the hard truth. Or should I say that many had been fallen to this scheme. The masterminds should be apprehended and take into court of law, otherwise they will just open up another company name and do it AGAIN & AGAIN!

This post has been edited by ben83: Oct 6 2012, 08:34 AM

Give the investor back the money????
Crazy ar...lator will complain how come so little one payback.

Only payback to those who lodged the report against Genneva.
That would be fair.

The rest who stil support Genneva. Please hunt down the Genneva Directorss.

This is very enlightening! Thanks for sharing.

Very nicely explained.

Wow, nice article. Absolutely superb

+1 Agree.