Bank Negara: FAQs on gold firm raids

PETALING JAYA: Bank Negara has provided answers to nine frequently asked questions following raids against companies suspected of operating illegal financial schemes using gold.

Source from (The Star Online): http://thestar.com.my/news/story.asp?file=/2012/10/23/nation/12211780&sec=nation
Published: October 23, 2012

On the authorities' concern with the business model of such companies, Bank Negara said the operating schemes were believed to be unsustainable.

“Such schemes are not funded through actual gold trading but from new monies invested into such schemes,” it said.

It also added that the value of assets and monies held by such companies did not commensurate with the amount collected from the investors.

On why the raids were carried out:
The companies were being investigated for suspected offences, including illegal financial schemes, money laundering, tax evasion, false description including misrepresentations, appointment of agents without licence and failure to lodge statutory documents.

On why the authorities were only taking action now:
Enforcement action can only be taken when it has been established that there is reason to believe an offence has been committed.

“This is to avoid hasty or reckless enforcement actions that may affect genuine businesses,” said Bank Negara, adding that the length of investigations depended on the complexity and magnitude of the case.

It also said that the investigations were accorded high priority and all necessary resources were being mobilised by the relevant enforcement agencies to conclude the investigations as early as possible.
> On why the assets of the affected companies were frozen and seized:
This is to prevent attempts to destroy or suppress evidence.

“This also prevents the assets from being dissipated to the detriment of the investors,” said Bank Negara.
> On whether the affected investors can claim their money or gold from the seized assets:
Bank Negara said it was up to the court.

“After the court proceeding is concluded, investors may file to the Court a third party claim for the return of money or gold,” it added.

Bank Negara also provided tips to evaluate an investment scheme such as urging consumers to only deal with licensed financial institutions and authorised dealers as well as refer to financial fraud alert on Bank Negara and Security Commission's websites.