Genneva Malaysia’s liabilities exceeded assets, says Awang Adek

KUALA LUMPUR, Oct 23 – Bank Negara Malaysia (BNM) has found the liabilities of gold investment firm Genneva Malaysia Sdn Bhd (Genneva Malaysia) exceeded its assets, said Deputy Finance Minister Datuk Dr Awang Adek Hussin.

Source from (The Malaysian Insider): http://www.themalaysianinsider.com/business/article/genneva-malaysias-liabilities-exceeded-assets-says-awang-adek/
Published: October 24, 2012

File photo shows the Bank Negara headquarters in Kuala Lumpur. The central bank says the liabilities of gold investment firm Genneva Malaysia Sdn Bhd (Genneva Malaysia) exceeded its assets. Early this month, BNM together with the Royal Malaysia Police, Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia carried out joint raids on several of Genneva Malaysia’s premises as well as the residences of its directors.

He said the situation clearly shows Genneva Malaysia was unable to pay returns to its investors.
Awang Adek, likening Genneva Malaysia’s operations to most illegal get-rich-quick schemes, said BNM’s initial investigations showed the company actually sold gold bars to attract investors, but later changed to just taking deposits.

“There was already an element of deposit taking in Genneva, and the company’s assets were so small compared to the amount invested by the people, so there was a very big gap between assets and liabilities.

“So how could it (Genneva) pay when its liabilities ran into billions of ringgit while its assets were just in the millions (of ringgit),” he said when concluding the Finance Ministry committee-level debate on the 2013 Supply Bill at the Dewan Rakyat here today.

Early this month, BNM together with the Royal Malaysia Police, Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia carried out joint raids on several of Genneva Malaysia’s premises as well as the residences of its directors after several investors who had become victims lodged police reports.

Awang Adek said it is not possible for Bank Negara, which is considering what appropriate action to take on Genneva Malaysia, to pay back the company’s customers the value of their investments.

“At first, some got a return of two per cent a month, but this was wrong. We cannot say the investors were blameless, they invested and there were risks.

“The company was really to be blamed. Where is there a scheme that can give such good returns, if it’s too good to be true, then it’s not true,” he said. – Bernama