Dangers of investment schemes
INVESTING in companies in the stock market is not a simple task. Investors ought to do their research and understand some level of finance before they can figure out what are the good opportunities. Still, the fact remains that the listing rules of the stock exchange are stringent.
Companies getting listed have to go through a multitude of filters and provide audited accounts, show past profitability and independent legal opinion on risk, among others. During the time they are listed, they still have to continue complying with many rules. This is where other investment schemes fall short.
So, considering other investment schemes, there are those that come under the Companies Commission of Malaysia that pitch early investments into plantations and even bird and fish farms. The problem with these schemes is that they rarely end up giving their investors the returns they promise. Consider the case of the Golden Palm Growers Bhd (GPG) scheme. It had collected over RM200mil from investors after launching in 2010. GPG is an investment scheme that allowed potential investors to participate and own oil palm plots without the hassle of becoming a smallholder planter. But investors are now scurrying to try to get their monies back. Tomorrow a meeting is being held between the scheme’s management and some of the top investors to try to work things out.
This is not the first time such investment schemes have ended up badly. Buyers should think twice before pouring their hardearned income into such schemes that do not afford sufficient protection to investors.