Bank Negara: Be wary when returns are too high

KUALA LUMPUR: Investors of the four gold trading companies currently being investigated by Bank Negara Malaysia (BNM) have the right to make police reports against these companies, said a BNM official.

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/abuh/Article/
Published: October 09, 2012

BNM assistant governor Abu Hassan Alshari Yahaya said while the straightforward buying and selling of gold is permissible, investors should be wary when the returns are too high.

"If the returns are high, investors should be cautious if these can be sustained and ask what is the basis of these returns," he told reporters at a Fomca event here yesterday.

Abu Hassan said in general, the public must always be cautious when dealing with entities which promote such investment or when investing in certain non-regulated investment schemes.

"If the investors feel they have been misled by these companies, they should lodge a police report," he said.

Asked if there will be more such raids in the near future, Abu Hassan said BNM has a list of such companies which it is monitoring.

Four gold trading companies namely Genneva Malaysia Sdn Bhd, Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd were raided for several offences.

Most of the companies were believed to have been offering get-rich-quick schemes, also known as Ponzi schemes.

Earlier, Abu Hassan launched Fomca's Prudent Financial Month 2012 which is themed "Financial Responsibility Begins With Me".

The event is aimed at enhancing the relationship between consumers and financial institutions (FIs), whereby the former can bring forward any views or complaints to the latter with the help of BNM.

Fomca president Datuk Marimuthu Nadason said based on the reports received by the National Consumer Complaints Centre, the number of consumers' complaints against FIs has increased from 809 in 2006 to 1,147 last year.

He said most of the issues were related to credit cards, loans, hidden and excessive charges, the usage of information from CTOS and home auction issue.

Meanwhile, Abu Hassan was also asked to comment on the sharp depreciation of the ringgit against the US dollar in the past week.

"Volatility is part of the environment now and our financial system is in a good and sound position to absorb this volatility," he said.

Last Friday, the ringgit closed against the US dollar at RM3.06 compared with RM3.048 on Tuesday last week, which some analysts were saying could have been caused by "hot money" exiting the financial system.