Investors,

Without buy back ‘guarantee’ & ‘discretionary’ monthly hibah, puts you at a bigger disadvantage because you have permitted an easy ‘escape’ clause for the company. Well it isn’t a problem to you because the company has never failed in paying hibah. And I assume you willingly accepted this risk when you participated in this scheme and prepared for the worst. That’s your choice; nothing wrong with it.

However if anything happens to the company, it reduces your bargaining power to sell unless gold prices increases dramatically by 20% or higher. I presume you were also very well aware of this risk and well prepared to accept the stake in the event something happens to the company. That is also nothing wrong. It’s your choice.

Please note that Bank Negara didn’t raid the company to ‘interfere’ the risk you willingly embraced but it was on the basis of the company’s tax evasion and avoidance, failure to lodge statutory documents, illegal money deposit, money laundering and appointmet agents without license. All that the directors need to do is to clear the air by cooperating with Bank Negara in their investigations by providing evidence such as fully audited financial report, money trail, documents that support delivery of gold upon signing S&P (S&P alone is not enough because it only covers the terms; there must be proof of delivery otherwise it will be deemed as illegal deposit ). I suspect that they failed to respond to BNM, therefore the company remained frozen. I don’t believe Bank Negara has the authority to raid a company that is outside their jurisdiction . Yes they can’t. Even some scams are not necessarily always under Bank Negara, for example scams that violates consumer rights; ought to be under Consumer Rights agency oversights.

Currently your position is very weak because you can’t sue the company; because you knowingly agreed the terms when you entered the scheme. You can’t sue Bank Negara because authority is vested on them unless there is evidence on abuse of power.

However what you can do is to plea with the directors to quickly clear themselves of any wrong doing; which it is definitely within their control by providing whatever proofs such as their financials (to counter tax evasion), money trail (to counter money laundering), documents to support proof of delivery (to counter illegal deposit taking) and etc. These are basic responsibilities for any business operations; so it is at the hands of the director to clear things quickly to resume business. No need to wait for Bank Negara to regulate gold trading.

On the flip side, I believe there is little incentive for directors to resume business . Why? Because to them it would be better to start a fresh new business on a clean sleigh. Resuming Genneva means the directors are to honour their obligations committed. Meaning they have to shoulder the ‘liabilities’ of 50,000 customers which estimated amount to over RM4billion. This is no small amount; will the directors put their hands to bear these liabilities to keep every customers happy?

You may say that the directors have done all they could to defend their position; it’s Bank Negara that is playing hardball and ‘bullying’ Genneva. If you accept my money lending scheme analogy; then you will understand it is the investors that are at disadvantageous position (buyer’s loss). Try do your own SWOT analysis.

But if you want to maintain that Genneva is purely gold trading model; then this raid should only affect the directors (seller’s loss). The raid shouldn’t affect the customers. For example I purhased gold from Poh Kong and assuming it was raided; it shouldn’t affect me because I have no stakes in the company. The affairs of the company is the responsibility of the directors not mine.

However if I have some stakes in Poh Kong such as my money ‘lent’ to Poh Kong then I have some vested interest in the business. In certain capacity I own some stakes in the company, the directors are somewhat ‘stewards’ of the money lent to them.

You have to decide which position you are in now. Are you a buyer with no strings attached? Or you have some form of vested interest in the company?

It becomes clearer to me that it works against the Directors favour to resume Genneva because of the liabilities accounted for.

In such scenario it is usually the lender who need to push for answer unless you are only a buyer.