Money games in Malaysia see increasing players

Although Bank Negara maintains a list of ‘unauthorised and unapproved’ companies, more needs to be done.

HOW serious is the money-spinning industry in Malaysia? On my way back from Beijing last year, I met a group of young Chinese flying here to take part in a pyramid scheme initiated by Malaysians.

The money game industry has ventured out of the country in a big way.

On the flight, two Chinese nationals sitting beside me explained how to rake in fast returns through the get-rich-quick scheme.

“You Malaysians have missed this bounty. And we are now bringing some of our compatriots to Malaysia to grab a share of the wealth.”

These Chinese participants will visit the company’s headquarters in Malaysia, attending talks and doing some sightseeing on the side. I believe more Chinese will flock here several months down the road.

Many Chinese nationals will suffer if these get-rich-quick schemes eventually collapse, and this could very likely develop into another diplomatic storm between us and Beijing, further denting our already weak international reputation.

Of course, the Chinese are not the only people crazy about pyramid activities. Tens of thousands of Malaysians rush to them as well.

In 2012, we saw a gold investment scam that rocked the nation, which later saw Bank Negara working with the police, Companies Commission of Malaysia and the Domestic Trade, Cooperatives and Consumerism Ministry to raid four companies, seizing some 100kg of gold bars worth around RM20mil. Some 35,000 people had invested in excess of RM10bil.

Later, six directors and business consultants of Genneva Malaysia Sdn Bhd were charged for money laundering and illegal fund collecting activities. They faced a total of 929 charges involving a sum of RM5.5bil.

But in 2013, three directors and a former director of the company were freed from 224 counts of money-laundering and five charges of accepting deposits of more than RM141mil without a licence.

And in September last year, the High Court upheld their acquittal. The company had carried out the buy-and-sell activities physically and there was no evidence that the firm took deposits without a licence, the Judicial Commissioner found.

He said Genneva had given an option to buyers to either sell the gold back to the firm, keep it or re-sell the gold to parties other than the company.

Bank Negara and other enforcement units took action against Genneva to prevent more people from falling prey to allegedly illegal trading activities. Unfortunately, the momentum has not been sustained.

Take YSLM for instance. Despite the fact that the company caused quite a stir in this country, its founder, the “world’s future richest man” Zhang Jian, was subsequently arrested in Thailand, not Malaysia.

And now, Zhang is about to launch a virtual currency to stage a major comeback in this country. More than 1,000 people claiming to be members of Zhang Jian Pearl Club attended a gala dinner in honour of the “King’s return” in Johor Baru last Sunday.

What makes it so difficult to weed out illegal trading activities? Other than the AntiMoney Laundering Act, perhaps the Government can look at the Financial Services Act 2013 and the Direct Sales and Anti- Pyramid Scheme Act 1993 when dealing with these illegal syndicates, and could even consider legislating new laws if the existing ones are insufficient to handle them.

Thanks to lax enforcement, numerous money games have mushroomed in recent years. Bank Negara’s list of “unauthorised and unapproved” companies jumped from 271 companies last year to 288 today, many of which are involved in illegal forex transactions and gold investment.

And since we already have their details, why just keep them in the blacklist instead of taking solid action against them?

We can’t expect everyone to have the ability to think logically and make sound judgments. When the first batch of people have bagged handsome profits from the money game, more will follow suit soon.

And no one will believe they will be so unlucky as to lose all their money to unscrupulous dealers.

But you can’t be lucky forever. The deeper you sink in, the more you will lose.

Those who have made some quick cash from the scheme will naturally become staunch defenders of the company’s founder, as they lash out at well-intentioned reminders and media reports.

And since it seems so easy to become millionaires, sharp-witted young people tend to draw up a melange of new investment schemes to entice their unsuspecting victims, such as a 25-year-old self-proclaimed “Datuk” at the centre of a forex investment scheme in Penang.

In the meantime, the JJPTR scheme is said to have about 300,000 members, many of whom are professionals with supposedly above-average analytical abilities.

Who would want to work hard if they thought they could make money in get-richquick schemes? How are we going to transform the country’s economy with so many people engrossed in illegal money game activities? Once the scam bursts, the country’s economy will suffer a further blow.

The money game, therefore, is not something we should conveniently ignore. When your neighbours, friends and relatives begin to join them, our society will no longer be the same.

The fact that such illegal activities have been able to go on unchecked shows that the Government has been lax in enforcing the law. Sooner or later, if we allow such anomalies to go on, a much bigger storm will brew.

How are we going to transform the country’s economy with so many people engrossed in illegal money game activities? Once the scam bursts, the country’s economy will suffer a further blow.