Precious Metal Investment 
85 Comments Genneva Gold Investment Scheme – Legit or Scam?
When gold investment is being concerned in Malaysia, many people always come across an investment scheme - Genneva Gold Investment Scheme. It has been a very hot topic for years in several forums. Everyone is giving comments about this investment scheme.
About Genneva Gold Investment Scheme
In this scheme, you aren’t only the owner of the gold. You are also receiving 1.8-2.5% cash return (which is known as “Hibah”) every month for 3 months under Genneva’s Syariah principle-based product plan. At times, they do offer 3% Hibah per month.
The scheme works similar like Fixed Deposit (FD). You can sell back the gold with the price you buy from them after the contract ends. Hence, your capital is 100% protected, yet with an annual return rate of 21.6-30.0%.
How it works
To begin a contract, investors purchase the gold with a sales and purchase agreement, letter of Hibah, certificate of ownership and the physical gold. After that, investors can enjoy the “Hibah” until the contract ends.
When the contract ends, investors have 3 options:
- Keep the physical gold
- Sell to third party
- Sell back to Genneva with the SAME price investors purchase
It sounds extremely fantastic for most of the people. It seems like “the best investment ever” whereby your initial capital is fully protected and the “Hibah” is guaranteed! FD will only yield around 3% to 4% per year, while Genneva is guaranteeing investors the high return. In addition, there are 3 exit strategies for investors.
But wait……
Everything seems too good to be true. As an investor, we always need to be aware of investment schemes which are offering extremely high return with little or no risk.
I decided to dig things out by researching about this investment scheme. Besides, I also attended one of their seminars last year. There are several agendas that I’m going to shared in this post.
1. High Premium
I saw many people are saying this in forums and I personally believe it. When I attended the seminar, the spot price of gold per gram was around RM168, gold smiths are trading at around RM200 to RM220 that time and Genneva was quoting us at about RM220 to RM230. The mark-up is way to high from what I expect. People are also mentioning that the gold bullions offered by Genneva is at the price of gold jewellery that gold smiths are trading at, and sometime even higher.
A very general advice that Genneva gold bullion investors and their consultants say is to keep the gold bullion bars if the sport price goes up after the contract ends and sell them to the gold smiths to earn a better return. Genneva will never hope investors to sell back the gold back to them.
After several research, I find that doesn’t make sense. Genneva is selling gold bullion at an average of 20% to 25% extra premium (Around 40-50% above spot price). This means that you can only break-even if the price of gold goes up by 20% to 25% if you want to sell them to any third party! Investors got to keep the gold for long term before that can actually sell them and make a gain.
Genneva consultants claim that we can always sell the gold to gold smiths at the same premium rate and this never happen. In fact, many Genneva investors say that the gold will always be sold to third party (include gold smiths) at an average of 40% loss.
However, many optimistic investors aren’t claiming that this is the risk because they can always sell back to the company. My question is, what if the gold is lost during the delivery (for those investors who are staying in the place where Genneva’s office isn’t setup, such as Miri)? The minimum and maximum loss will be 100% of your capital, and this happened before.
2. Hibah
The attractive return that Genneva offers is always something frequently questionable. Again we heard many Genneva investors say that “as long as I’m receiving Hibah, why do need to care where does the Hibah come from?”
As a careful investor, we shall always analyse and look at the whole scheme. The answer is pretty obvious. Investors who do not sell the Hibah back to Genneva, they’re paying the Hibah themselves! As mentioned above, the mark-up is as high as 20% to 25%. Giving 1.8-2.5% per month to the investors is extremely affordable for the company. As mentioned, Genneva always doesn’t hope investors to sell back the gold bullion and their consultants mentioned to me that usually investors won’t sell back because they’re positive with the growth of gold price.
Even if investors return the gold and get the capital back, Genneva will not make a loss. If you’re good in investing, you will know that with such a large money on your hand, you can do a lot of things to get the similar return. Genneva will do the same to offset the Hibah that they’re giving out.
As an investor perspective, you shall buy the gold and get the Hibah and sell back to Genneva after the contract and your net profit will be the 5.4-7.5% of Hibah per 3-month contract, provided there are no other risks.
3. Buy Back Guarantee
I believe this is another risk for investors. Genneva does offer buy back guarantee and during the seminar, those consultants are saying that they will always buy back the gold and return 100% of your capital.
However, buy back guarantee is something that they do NOT include in their policies. And, Genneva even claims that in newspaper.
Buy Back Guarantee is just something they practise, but they do not actually guarantee. You’re exposed to that risk if you’re hoping to get the Hibah only and sell back the gold bullion after the end of every contract!
4. Investigation of BNM
Until today, Genneva Sdn Bhd is still under the investigation of Bank Negara Malaysia (click here for reference). As a careful investor, would you risk your money in a company which is still under investigation since 2009 until today?
5. Turn Around Time
This is what I know from many investors. They don’t get the physical gold bullion right after they pay. Normally investors have to wait for at least 2 to 3 days before they can get the gold. For investors whose stay in a place where Genneva’s office isn’t available? They’ve to wait for the gold bullion for a longer period of time, as delivery takes time. There are several cases that investors receive the gold bullion few days before the contract ends!
The main concern is, who is going to be responsible for anything happen during that turn around time?
6. Shaky Business Model
There are too much things to be discussed and it isn’t possible to be mentioned here on by one. There are still a lot of things which are questionable. According to some Genneva ex-agent, the company keeps on changing policies which eventually make agents feel insecure and not comfortable. For me, the business model is relatively unstable.
And I always wonder one thing. If everyone is investing in Genneva Gold Investment Scheme just because of the Hibah and sell back the the gold bullion after every contract ends? It simply means that Genneva has to find ways to make money that yields minimum approximately 40% per year! By using your logic, do you think it’s possible? It may be.
Not forgetting that each agent is getting 0.5% commission and an extra 0.3% commission after their sales volume exceed RM3.5 million. Assuming that every agent is performing and getting 0.8% commission and every investor is investing vast sum of gold and get 2.5% of Hibah per month and sell back after contracts are expired, Genneva needs to find a business or investment that yields at least 39.6% in order to cover all these costs!
What about their operating expenses? Office rent, utility bills?
If investors start to sell off their properties, use credit card loans and go crazy with leverage and invest into Genneva Gold Investment Scheme that gives them 30% per year, can this business model sustain? This is possible because 30% of return is way too profitable if we compare with the rent received, and it’s for sure that the return can cover interest of any loans.
If everyone goes crazy in leveraging, is the business model sustainable? If there are 1,000 investors borrow money and invest RM1 million in this scheme, how will Genneva makes the RM400 million profit out of the RM1 billion, just to BREAK-EVEN?
If it’s not sustainable, how will this music stop if the day comes?
Advice for Investors
Investments always come with certain amount of risk. There are people who make good return without any problem with Genneva Gold Investment Scheme for the past few years. However, there are also a lot of people got deceived by the scheme.
The general and also the best advice for any investment is to invest only the amount that you are afford to lose. Another advice is do not borrow money and invest. If things go wrong, you will instantly carrying a huge amount of debt that you aren’t able to pay off.
Furthermore, if you’re really showing interest in gold and silver investment, I would highly recommend you to invest in physical gold and silver. Remember: If you don’t hold it, you don’t own it.
Very good analysis!
Invest in gold, is legit. Just that this business model is not rational and logic. But anyhow, i don’t agree with Geneva business model, since they mark up 20-25% selling price. But i do agree with investment in gold, since this is a genuine investment! Maybe investor can look for other alternative which is more genuine to invest.
I do not totally aggree with :”…..highly recommend you to invest in physical gold and silver. Remember: If you don’t hold it, you don’t own it……” My reason is, if you deposit your money in the bank, you don’t hold it too, doesn’t mean that you don’t own it! You buy unit trust from PBB, and PBB fund manager use your money to invest in other share market….. similar scenario, you don’t hold that particular share, but you do own it still….
As long as you found a genuine and reliable company, all your inverstment instrument, you need not to hold it, but you do own it too!
In many circumstances, invest funds with banks are safe enough. The reason why “You don’t hold it, you don’t own it” applies in precious metal investment is because you do not have the power to sell the precious metal with the price you want. Most paper or ETF will have a fixed spread between buy and sell price, hence, holding physical gold and silver actually gives you the power to sell at the price you want
Dear Jeen Hao
1. How can I calculate the premium % you mentioned? I get 0%-15% premium compared to goldsmith and 30%-37% premium compared to spot price.
2. Based on above, breakeven point if price of gold goes up is 0%-15%?
3. After 1 or 2 months of receiving hibah (if received), breakeven point goes down further? It may even be crossed if you managed to get it initially at 0% premium?
1. Assuming the spot price is RM100, and gold smith shop is quoting RM120 while Genneva quotes you RM140, then:
- Gold smith shop is quoting at a 20% premium over spot.
- Genneva is quoting at a 40% premium over spot (for its gold bar), and around 15%-20% premium compared to gold smith’s quote, which is for gold jewellery at most cases.
2. If we assume investors were to keep the gold after contract ends, and gold bar has a premium of 10% over spot, then the breakeven will occur when gold spot price goes up by roughly 30%. For instant, gold spot price is RM100, investors bought from Genneva at RM140, normal gold bar is trading at RM110 (10% over spot), then you need to wait the spot price becomes RM127 then only you can have the chance to trade the gold bar at RM140 in the market. By math, it’s around 30% to breakeven, however, according to some Genneva investors, their net loss is 40% if they sell it to gold smith shops, assuming spot price doesn’t change.
3. If it’s a 3 months contract, assuming you’re getting 2%/month. So, for the entire contract, you’re getting 6% return out of your capital. If you want to breakeven, you still need to wait the gold spot price goes up by at least 21%.
Extra note for investors: I’ve a friend’s friend who got the contract of Genneva. Inside, it states that the company will buy back the price at gold spot price, not the initial price that investors pay for. In this case, net loss can be more than 30% per contract!
Has anyone tried to find out where to sell their gold bars?
You will be subject to the following:
1. Detailed check/query about the pedigree of your gold, I.e. who is manufacturer, is it recognized gold bullion manufacturer, any certificate of purity/authenticity etc etc?
2. If the pedigree test is passed, price offered will be at discount to spot.
If you have to keep GENNEVA gold and sell outside, assuming the spot price is the same as when you bought the gold, you can easily suffer loss of 40%, due to the overprice you paid, and the discount that next buyer will impose on you. Not a wise move to buy GENNEVA gold.
The best place in Malaysia to buy or sell gold bullion is at mysmartgold located at Old KLANG Road, Kuala Lumpur. Google the name. Strictly cash dealing only both
for buying and selling. No hanky panky. Visit martin lee sg gold genneva blogspot for extensive discussion on genneva operations.
Dear P C Wong
1. Do Genneva offer pedigree gold? If not, what kind of gold do they offer?
2. If the pedigree test is passed, price offered will be at how much discount to spot?
3. How much above spot do mysmartgold sell at, given current prices?
I am not here to answer this Genneva colonel’s questions.
Dear Jeen Hao
1. Pls use the figures you blogged in the article to calculate the % premiums, not new sets of figures.
“When I attended the seminar, the spot price of gold per gram was around RM168, gold smiths are trading at around RM200 to RM220 that time and Genneva was quoting us at about RM220 to RM230.”
2. You mentioned gold bar trading (assuming normal gold bar trading price = gold smith shop price) at RM120 in your explanation to my 1st question (20% premium over spot). So if spot goes to RM117, normal gold bar should be trading at RM140, which is 17% to breakeven point.
Is it possible to post copy of the contract for viewing? Thanks
1) Spot = 168; Gold jewelry (take the average) = 210; Genneva Gold (average) = 225
Genneva Gold over spot = 33.93%
Genneva Gold over jewelry = 7.14%
I collect information from a number of investors Based on their experience, the gold price quoted by Genneva is sometime roughly the same as the price quoted by gold smith (gold jewelry) and sometime it’s far more expensive than price quoted by gold smiths, such as PK.
As precious metal investors, we NEVER PAY RETAIL (by Warran Buffet).
2) Gold bars are gold bars, they have their own premium. Gold price quoted by gold smiths represents gold jewelry price, which include the gold premium plus crafting or additional art value.
I have no ways to get the copy of the contract. If I got more proofs, I will upload.
Dear Jeen Hao,
You must be wary of this anon one.
He is a Gnneva mole, plant, troll.
Visit Martin Lee.Genneva gold.sg to read the entire gamut of this Genneva colonel’s postings since Mar 2012. Read about what is the popular opinion of the Genneva bloggers regarding this Genneva colonel.
Several bloggers there have advised everyone to ignore him, to llet him talk to his mirror. His assignment is to throw all kinds of irrelevant nonsense so as to muddy the waters.
Dear Jeen Hao
Sorry, but I need to conclude that the premium % which you originally calculated and indicated in your main article is inaccurate. As a result, the subsequent analysis you make using such premium % may mislead readers. Reason being per your reply:
1. The latter premium % calculated is different from your original calculations.
2. The article do not mention crafting nor additional art value when making reference to gold smith jewelry and its price/% premium.
You’ve your right to comment anything.
Thanks for your comment. I know, and readers who read the comment an tell that through the way he’s commenting. People with common sense will know that gold jewelry will have a higher premium because of crafting and workmanship or other sorts of premium. He expects we bloggers to tell everything from head to toes like teaching kids some common sense. Let him to continues investing and supporting Genneva
Dear Jeen Hao
In your article, it is stated “gold smiths are trading at around RM200 to RM220 that time”. No mention that it is jewelry. People with common sense may be misled to assume the article is talking about gold bars traded at gold smiths. When asked, you implied it means jewelry. Now, you confirm you meant jewelry from the beginning and end off with a snide & baseless remark.
At least, now, layman readers (with or without common sense) can ascertain what you originally meant in your article (if they read the comments).
Is this “Anon me” clown trolling here as well? He is a serial prevaricator and suffers from Extreme Question Syndrome where every post of his is a nonsensical question meant to provoke. He is likely from Genneva and many suspect he is their Punjabi lawyer.
Dear Merlion
The “nonsensical question” (as you claim) have clarified following:
1. The % premium mentioned in the main ariticle is inaccurate and off by more than 10%.
2. In main article, the term “gold smiths are trading at around RM200 to RM220″ refers to jewelry (higher premium because of crafting and workmanship or other sorts of premium).
3. It may be inaccurate to compare gold bars to jewelry. Subsequent breakeven point calculated is higher.
They use 25% for rolling, so if there is 4 buyers, means they get 100% free gold from them, and sell to 5th buyer!
Nice point you got
Dear Ethan Chan
Nice point you got.
If chicken rice seller makes 25% margin, they also get 100% free plate of checken rice (after 4th buyer), and sell to 5th buyer! Hey, that principle applies to every single business on the face of the earth.
Perhaps they are bunches of genneva consultant. I get to ve know one of them at a dating site, who seems to be waiting for a next victim. They will be provoked, if you was able to ve point out the facts of their ponzi scheme. Heard that they are now producing their own gold bar, which are not internationally recognized. Malaysian will never learn until it was too late. If they can survive for another 5 years, the banking industries will hits most.
I am kinda newbie in financial planning & hoping to get better view of this Genneva thing. So I am trying to do the simple math here…
Trying to get different info fr the internet, and most sites mention 2% return for a mth.
So, For the 12mth contract, fixed return = 2% x 12mth = 24%
If Genneva marked up 25% fr the spot price and give the investor 24% = Genneva is still earning 1%
If Genneva marked up 22% fr the spot price and give the investor 24% = Investor is earning 3% (but most of the bank could offer FD interest at 3.4%, right?)
If Genneva marked up 20% from the spot price and give the investor 24% = Investor will earn 4% (which is 0.6% more than FD could offer)
Investor will need to tie at least 10mths = 20% in order to equalized to the capital.
If investor just tie with 3mths/6 mths contract is actually not making the profit.
So guess is the investor himself to be justified whether to earn that 0.6% more from the FD could offer and invest to a “so many questions were asked company”
Pls correct me if I am wrong. Thx.
Dear Hoi
Using example of RM80 as spot price. Assume spot price no change 12 mths later.
If 25% mark-up, you will pay RM100. Every mth, you renew and get RM2. 12 mths later, you sell back the gold at same RM100 and would have received RM24 (RM2 x 12mths)
This Anon Me has been declared “persona non grata” on the martin lee Genneva gold sg blogsite. Please google and read all about it.
In the blog example of Genneva collecting RM1,000 million and having to earn RM400 million just to pay hibah and commissions, with a derived required ROI of 40% pa, it has to be pointed out that because Genneva has to use 80% of the RM1,000 million to buy the gold, they are only left with RM200 million principal on which to earn RM400 million. Therefore their required ROI to achieve is in fact
400/200 x 100 = 200% pa!!! Just to pay hibah and commissions!!!
How can 200% ROI pa be achieved??
WHY ON EARTH ARE THERE PEOPLE WHO GO AND BUY THE GENNEVA GOLD???
Dear p c wong
If one were to purchase RM800 million worth of gold, is one able to obtain it at a lower price?
TROLL ALERT
============
WARNING!! BEWARE THE CONTENTS OF THE POSTS OF THIS TROLL!!
TO UNDERSTAND WHAT IS A TROLL, AND THE TACTICS ADOPTED, PLEASE VISIT MARTIN LEE GENNEVA GOLD SG BLOGSITE. THE SITE ALSO CONTAINS MORE THAN 4,000 POSTS DISCUSSING THE MERITS OR OTHERWISE OF THE GENNEVA GOLD INVESTMENT SCHEME.
It seems like a big joke. We re here to share the facts of, is this scheme re worth to ve invest with or not. Not pointing the fingers at each other. Thou many bloggers has pointed out the motive of this company. We dont need to ve bother if they are whether their company consultant or just a cock sucker low class lawyer. Those who wish to stick their neck out, let them be. The solution are simple, if a company who having less then a million pay up capital. Do you ever thou of what if they happen to ve achieved one thousand million target? They will just apply for a wind up and put the blame at other. Do remember this, it a white collar crime, we won’t be able to do anything about. it. Even our lawyer will laugh at us. That why the previous victims re suffer in silent.
Dear Albert
Those who wish to stick their neck out need to ask themselves first:
1. Are they aware of & do they fully understand the discretionery clause?
2. Do they have gold in hand if they buy?
3. Are they buying within their limits and comfortable with the dollar value premium they pay for the gold?
4. Do they know their risk profile?
All things considered (together with all the info from the internet), decide. Your money, your choice.
You do ve your points, but we are not here to ve discuss the solutions – either they are legit or not. We are here just to help out those who are native with gold investment. If you ever thou that you re smart enough, thn created your own blog OK?
Dear Albert
What is the meaning of “native with gold investment”?
Should one assume a registered company is legit until proven otherwise by law?
Jeen Hao, thanks for the wonderful article with careful sensible analysis. I have searched for all kinds of information since long ago so that I was able to help a group of my customers whom I invested their money in mutual funds and bank gold prices with good return in 2009 and 10. Now I have moved away and no longer able to help them invest and some called me up about their Genneva investment.
A few of them even put all their money of a few hundred thousands lifetime savings into this and I shared a few important points and risks you have also mentioned hoping to open their eyes a little. I love my customers a lot and wish they would be able to analyse as we the experienced investors do. I have invested all kinds of things you can name in the market but none like this. Exactly as you said, I told them if you really want to join them, go in, make fast money and sell back to them fast. Because sooner or later, something unexpected is going to happen and some people will get hurt very bad financially.
Many of the things you mentioned here are 100% worthy of recommendation. I will refer your website to them. Thank you.
You ve already answered its, in your clauses 1 & 4. Do i need to ve says more? U re making a good profits out of urself, n hope for more frm those scapegoat to ve keep u making more profits. Pls dnt ever disturb at other people blogs again, if u re tat smart, thn start ur own gold investment blog. U wil nvr regard until until one day, one of ur grandson who re born without an ass.
HI all. This is just a misunderstanding. Saya dah lama trade gold dan terbukti ia bukan scam. boleh layari web ni kalo xcaya: http://www.lombongvgmc.com sume bukti ada dinyatakan di situ.
Did u enter into investment because u want the overpriced physical gold or u just want the so called hibah? Ask your self this. Better i just promise you the moon and the sky. At least if bnm raid, i still have the moon and the sky. The gold is just a feel good factor or surerity. Compared to pak man telo, he does no offer gold. Only promises. Of course gmsb caims they can pay you. They have collected billions of rm from the public…. Fatwa is out, bnm alert is out, ppim lodge police report, boom… It’s coming really soon.
Dear Mister R
You mentioned “It’s coming really soon”. Any time frame when it will come.
Yes, it happened yesterday 1 October 2012. Now, will you shut up?
Dear merlion
Thank you for confirming you only know about it on 1 October 2012 when it happened. Prior was conjecture.
Wow, Anon Me!
You are the biggest genius in the world!
But sadly, your sponsor GENNEVA has collapsed!
(1) Bank Negara has placed daily full page advertisements in the STAR and theNEW STRAITS TIMES over 6 days or more to warn the public about investment in unapproved schemes for gold or commodities etc. (early Aug 2012). (2). 3 people cheated by gold trading company enlisted the help of Kelana Jaya M P Mr Loh Gwo Byrne to highlight the matter in a press conference, reported in the Chinese media China Press and Nanyang SIANG Pao. (3) The National Fatwa Council has also declared the Genneva gold business to be NOT compliant with Syariah principles and advised Muslims to avoid this investment. (4). The Police has advised people that several gold trading companies are being investigated for cheating under Section 420 Penal Code, and that the public should avoid such PONZI schemes.
All the details can be read at Blogsite of “Martin Lee Genneva Gold” (pls google the name).
Dear p c wong
(1) But such unapproved schemes are legitimate? If not, why only warning, why no arrests & closures?
(2) Is the matter to do with goldco? Was it mentioned?
(3) May non-muslims invest then? Must muslims invest in Syariah compliant investments only?
(4) Any company names mentioned?
Why do you come to Jeen Hao Blogsite to advertise for another blogsite? Do you have any pecuniary interest in the other website/issue? Do you know that is very rude/impolite and a definite affront to Jeen Hao?
All parties interested in gold investment should visit blog called
Martin lee sg Genneva gold
Pls google for this link.
This site has more than 4,600+ postings. The infamous troll Anon Me has earned for himself on this site more than “100-epithets”. So there he is called the 100-epithet TROLL !!
From the site, you will read and conclude that Genneva gold is an out and out PONZI, a scam which will collapse very soon.
Dear p c wong
Why do you come to Jeen Hao Blogsite to advertise for another blogsite? Do you have any pecuniary interest in the other website/issue? Do you know that is very rude/impolite and a definite affront to Jeen Hao?
You mentioned “a scam which will collapse very soon”. Any time frame when it will come.
WELL, WELL, FOR THE RECORD, THE HOUSE OF GENNEVA COLLAPSED ON 01 OCT 2012. BURIAL DATE SOON! ARE YOU ALSO GOING TO ASK FOR THE DATE OF BURIAL??
Very Good analysis, Jeenhao. And also spot on.
Btw, in Singapore, they are defaulting in paying the monthly IR payments since jul 12 for > 2 mths. And to sellback, u have to wait up to 6 mths or more.
Many investors alr made police reports and this was reported in the Wanbao this week.
Why? Because I am one of these victims.
Yea! Many newspapers in Singapore did publish that news I think.
Here is one of the image copies I manage to get:
http://www.facebook.com/photo.php?fbid=381438795261068&set=a.364772203594394.82104.321367121268236&type=1&relevant_count=1
Bank Negara Malaysia has commenced investigations into Genneva Sdn Bhd and Etika Emas Estet Sdn Bhd under suspicion of conducting illegal deposit taking activities in breach of Section 25(1) Banking and Financial Institutions Act 1989 (BAFIA) and Section 4(1) of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA).
The raids on these companies were conducted at their premises in Kuala Lumpur following information received from members of the public. Relevant assets and documents of the company were seized for the purpose of investigation.
Hi JH
Yr opinion on the contract. If investors roll over the contract every 3mths, wld not GD make 20+% per transaction on the gold purchase value as each roll over is new contract. Investor keep paying mark up and GD gets 4x mark up in a yr.
After considering all the warnings signs (as listed in this blog, the media, the government and etc) and all the negative feedback, would a wise person still want to invest his hard earn money in this scheme? . Just like would a shop owner hire someone with dodgy background to be his cashier? In the end, It is up to you (the investor) to decide .
Hold hold hold.. people, I think we gone too far.
Of course we have our own opinion when come do discussion. Let’s back to neutral position. And I have just a little bit questions to ask.
1. The money this company involved is really big, if they are the scam company; why do the government/ central bank still let them to continue operating until today ?
2. Having to put aside of the % and the breakeven, Can I say, Genneva is just an ordinary gold smith shop with modern operating style? May be everyone can have a good night sleep by thinking this way.
Mr Papaveryrich,
You idiot!
Just days after your fanciful words, your patron the H Ouse of GENNEVA has collapsed!
Hey college boy Jeen Hao, go back to school and study more.
There are still lots of things you do not understand but you think you understand.
take a look , happen in singapore
Gold trading firm taken to court by customer
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Source
Business Times
Date
25 Sep 2012
Author
Genevieve Cua
[SINGAPORE] Genneva Pte Ltd, a gold trading company offering a “buyback” scheme, appears to be in hot water.
At least one customer has recently won an interlocutory judgment against it in the Subordinate Court, pending an assessment of damages. It remains to be seen, however, whether she will recover her claim of about $190,000. Genneva failed to respond to the writ of summons or to contest the case.
The plaintiff, Lee Bee Ghok, is represented by Goh Kok Yeow of De Souza Lim & Goh.
A second writ of summons has also been filed in the Subordinate Court claiming a total sum of roughly $86,000.
A number of other customers are also looking into launching a lawsuit against the firm for its alleged failure to honour its part of the agreement to buy back gold. One group of about 60 customers, representing a total of roughly $10 million in gold purchases, is understood to be consulting lawyers.
Genneva is on the Monetary Authority of Singapore’s Investor Alert list of unlicensed entities. Its scheme basically sells gold to customers at a hefty premium of 20-30 per cent. Customers, however, are told that they enjoy a “discount” of about 2 per cent off the headline price.
They are given the option to sell back the gold after a pre-agreed term of one month or three months. The gold can be sold back at the headline price and customers get to pocket the so-called discount. Assuming monthly rollovers, this could mean a return of as much as 24 per cent a year.
Genneva’s website lists a price of $96 per gram as at August. This is the equivalent of about $96,000 per kilobar of gold. UOB, which offers gold investment services, sells gold to the public at about $74,500 per kilobar.
Sources said that the firm had also offered a “safekeeping receipt” (SKR) scheme some years ago, where the customer does not take delivery of physical gold. The gold is held by the company for safekeeping, and customers can exercise the option to withdraw via a “sellback”.
Genneva director Leow Wee Khong could not be reached. Calls and e-mail to the company were not answered.
More recently, a source said, customers were marketed a scheme similar to SKR, but under a contract linked to a Malaysian company.
BT understands that in the last few months, customers have not been able to sell back their gold. Agents are also owed commissions for up to six or seven months. Customers that BT spoke with managed to make at least one rollover, earning 2 per cent, after which some invested yet more money.
Spot gold price touched a high of US$1,888 per ounce last year. It is now trading at US$1,759.
Customers who bought from Genneva are in a bind because of the high premium paid. Those BT spoke with paid between $91,000 and $93,000 per kilobar. UOB will buy back from the public at about $69,400 based on yesterday’s indicative prices.
Some customers are believed to have filed police reports. A police spokesman said: “It is inappropriate to comment on police investigations, if any.”
Based on Genneva’s latest available filings, 2009 revenue came to $236 million. Assets totalled $67 million and liabilities, $68 million. Paid-up capital came to $500,000. The company was registered in 2008 with four directors, three of whom are Malaysian.
The three Malaysians – Marcus Yee Yuen Seng, Ng Poh Weng and Chin Wai Leong – are also directors of Genneva Sdn Bhd. They are being sued by Bank Negara in Malaysia for alleged illegal deposit taking and alleged offences under anti-money laundering laws. The case is ongoing.
In Singapore, there are four apparently related Genneva companies registered as businesses. Apart from Genneva Pte Ltd, there is also Genneva Remittance, set up ostensibly for remittance services, and Genneva Syariah, described as gold bullion traders and dealers.
In March, Genneva World Pte Ltd was registered also for gold trading. It has six Singaporean directors, one of whom is Mr Leow, the Genneva director.
Customers are concerned that assets of Genneva are being transferred to Genneva World, which is expected to trade on a similar business model. Sources say that some customers have been invited to transfer their contracts to Genneva World, but they are asked to keep 30 per cent of their gold holding with the company.
Genneva’s model appears to fall into a grey regulatory area. Because there is typically a physical purchase of gold, the company is not classified as an investment adviser. The so-called discount that customers are extended is also not described as a yield or return.
Meanwhile, on its website, the MAS warns against schemes that dangle high returns, citing gold buyback schemes. It urges customers to question how the returns are generated, and whether the operators are regulated.
Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction
Hiah i also one of the victim
Good analysis! The company is raided by Bank Negara:
http://silverinmalaysia.com/genneva-raided-by-bank-negara-malaysia/
Now…what does everyone got to say now huh…’anon me’ and ‘papaveryrich’…bank negera went in…ponzi or not??
Spot on jeenhao!! If u don’t hold it, u don’t own it!!! I couldn’t agree more!!
‘Anon me’ is still spouting nonsense in Martin Lee’s blog while ‘papaveryrich’ has changed his nick to ‘papanotsorich’.
Dear merlion
Seeking elaboration/clarification menas spouting nonsense?
Yes, it is nonsense!
Your House of GENNEVA has collapsed!
Can you please shut up now?
Spouting deliberate nonsense is not seeking clarification and elaboration.
23% Return almost as high as loan shark and huge difference compared with the Bank which only offers 5%. Unbelievable!! High return comes with high risk. Now that risk has hit you. I wonder if you could get back all your money. There is a saying “Where could you find a golden goose jumping around on the street”
Im a muslim… but using ‘Hibah’… Ptui…
No money, no religion!
Good analysis jeen hao! I wished there were more gold investors reading yr artical.
Hi Genneva members Malaysia n Singapore!!.. We hope to help u in whatever we can.. We can BUY ur Genneva gold bar at RM166/g.. so if got 1.1kg, it’s 1100×166=RM182,600.. HURRY while the gold price is HIGH!! Inbox me if interested.. Lets solve it together! TQ
email me at st3dyst3dy@gmail.com
Are you offering to buy 1.1kg at RM182,000 in the hope that the seller failed to notice the 0.1 decimal, so that your actual offer is at RM165,000?? Is there any gold bar of weight 1.1kg!
Wah, you real tricky fella!
I sure all cases against Genneva will be withdrawn. All these happenings are just drama so that they don’t need to pay clients the premium they promised because they have no more funds to give. The directors and shareholders of Genneva is protected by someone or somebody. and for all you know they will even given “Datukship” title. Just like what happened with G-Gold Gallery. And the directors are roaming around freely and driving really nice care and sporting long hair and with CDs in tow.
Genneva’s trading style is exactly the same as the G-Gold Gallery in Ipoh, Perak Malaysia.
Hello dear friends
Where in Kuala Lumpur can accurately test the purity of gold,
thanks
from what i know genneva pay hibah and buy back gold for the previous records, not like the CSG fine metal sdn bhd company promise hibah but never pay the hibah cheat people money only and turn up customer buy gold more than the market price and now have to suffer can’t sell it and have to wait long long times until break even.
I cut my gold bar , inside is filed with chocolate with nutty flavor.
I came across mushroom investment, rare earth investment, vineyard investment, land conversion investment in New Zealand, gold investment waiting for IPO, herbs investment.
Good luck friends, you are making others rich by being poor and saddled with debts but the worst thing is to become the greatest fool at the end.
Let me see, I have 70000 fools hooked. Each fool invested MYR100,000. (Wow , MYR7,000,000,000 /) The company paid out 20% annually for 2 years: That is 40% (MYR2,800,000,000) = Net MYR4,200,000,000 in the pool.
I will ask my cronies to make a report to BNM, in hope BNM closed the company. I pocket all the money with my reputation intact.
My papa very rich, my mama very rich, all because of gold gold gold investment. I was having ferrari, lamborghini, diamler & benz, My papa very rich singing I want to be rich & my mama singing I want to have rich lifestyle. Holiday in Europe & America no problem. Business Class is how we travelled. Friends flocks to us like seagulls. Education, no,no,no, not here, you go UK. Papa was Agent 001 & Mama Agent 002 , we are number 1.
After 1st.October 2012 midnight, POOF!!! it is like a dream, a dark cloud over our head.
ferrari, lamborghini, diamler & benz became memories.
papa is singing I am a fool
mama is singing no more rich lifestyle
No more holiday even on Sunday
No class now as we are so deep in debts
Friends became FIENDS as we were so cocky
Stop your education now and get out bring some bacon in
Loan Agent, Bank Agent, Along Agent all came calling. Pay up or else
How we WISH……….. How we WISH…
You are genius
Anyone read Richard Chew posting?
I can understand all the frustration that is being aired here. And it appears Genneva has been deliverying what they promised thus many believe in this scheme.
However let me explain my view on the technical flaw in this scheme that warrants BNM to take such drastic action. My intention of giving my view is to help enlightened and hopefully will help many here to ask the right questions and direct it to the right party.
In any trading; there must be willing buyer & seller for a transaction to take place at a price agreeable by both parties. The seller will profit from the transaction and the buyer will receive the goods / service. Very clear cut exchange.
However in this scheme, technically the seller do not ‘realized’ its profit yet from the transaction because there is a contractual obligation that a monthly ‘gift’ of 2-3% is given to the buyer and the buyer has the option to sell back the gold at the original purchased price. In this aspect, the seller’s obligations to the buyer becomes a Liability to the seller. To put it in another words, it is the buyer that will receive the profits rather than the seller in this transaction scheme.
Therefore technically this transaction scheme cannot be deemed as trading because the seller doesn’t profit from the goods sold. If it is not trading then where does this lead to?
My next statement may sound absurd and may anger many of you here but please bear with me. My intention is to explain so we can have better judgement & help us understand why Bank Negara has to step in and take drastic measure.
I am saying this scheme is not trading because it is more inclined to money lending business which must be regulated under our Malaysia law. Yes, I just said it; this Genneva scheme is basically a money lending scheme misrepresented as gold trading scheme.
How can this be? You may say there is a sales purchase agreement and gold transacted then how can this be money lending? If its money lending scheme then who is lending to who?
In this scheme, you are the lender. Genneva is the borrower. You bear the financial risk, in return Genneva pays you the monthly interest as we know it as Hibah. At the end of the loan contract, Genneva returns the money to you. During the contract, you keep the gold bar as your collateral if in the event Genneva fails to pay; you don’t loose the full amount lent to Genneva.
If the deal is purely buy & sell with no contractual obligation; then it is clear curlt trading because seller profits and buyer keep the goods. But if there is a contractual obligations for monthly interest & buy back then it is surely money lending, the gold serves as the collateral; the lender profits and the borrower bears the liability.
This issuance of collateral gold is somewhat similar to companies issuing bonds to raise fund from the public. Bonds are meticulously regulated by Securities Commission & Bank Negara because it has to be secured against the company assets such as properties and etc.
The problem with Genneva is that they are not regulated and when they have more buyers (lenders) they are actually increasing the liabilities of the company while profit is not realized yet.
For a typical trading company, the more customers; the more goods trade out, the more profits realized. Clear cut profit realization. For example RM 1 billion of gold sold would generate certain amount of profit based on the profit margin.
However Genneva’s scheme, the more gold sold the more liability it creates for the company because of the obligations to buy back and pay the monthly gift. Therefore Bank Negara had to step in to ensure things are in order and to prevent it to get out of control. A small complaint would suffice to fuel the urgency for drastic action.
They had to confiscate the gold because it is the tool used by Genneva to solicit funds from the public. It is harsh but neccesary.
Please remain calm, let Bank Negara complete the investigation. My appeal to Bank Negara is they quickly resolve this soon, the people are getting restless because of their likelihood at stake.
~Richard Chew (posting on Bank Negara’s fb site)
If his writing is true and the authorities decided to take action, all Genneva Malaysia Sdn Bhd customers will be caught under the Act, MONEYLENDERS ACT 1951, SECTION 5 :
Licence to be taken out by monerlender
5. (1) No person shall conduct business as a moneylender unless he is a licensed under this Act.
5. (2) Any person who carries on business as a moneylender without a valid licence, or who continues to carry on such business after his licence has expired or been suspended or revoked shall be guilty of an offence under this Act and shall be liable to a fine of not less than Twenty thousand ringgit but not more than one hundred thousand ringgit or to imprisonment for a term not exceeding five years or to both, and in the case of a second or subsequent offence shall also be liable to whipping in addition to such punishment.
OMG…….. if Richard is correct…. all kena… well I think all customers rather than complaining BNM better still get a good lawyer now and hopefully can get a lenient sentence, but please don’t use “I don’t know I am lending Money since Ignorant is no excuse”
Look at it from the angle of a short term deposit taking scheme, where the 25% premium on gold bars is the unsecured deposit placed by Genneva gold buyers, discount/hibah is the interest equivalent and buyback is the promise of your principal being refunded for gold returned at contract end. Holding overpriced gold gives buyers a false sense of security. Unlicensed deposit taking is one major reason why BNM is so concerned with these ponzi schemes.
CRAZY DEPOSIT TAKING
You pay 100 units for gold. With 25% premium, the gold cost 80 units and markup is 20 units. After buying gold, GENNEVA got only 20 units left to invest. Pay hibah 3 units, consultant 0.5 units, upline 0.3 units, TOTAL 3.8 units per MTH or 45.6 units per annum. So with 20 units net cash holding GENNEVA must earn ROI of 45.6/20. x 100 = 228% pa just to cover these items !!! What about profit and admin overheads etc?
So how to sustain the operation? Here’s how:
1. They do not need capital, in fact the total paid up capital of GENNEVA M’SIA SDN BHD is only RM50,000 ! Unbelievable when they do billion RM business. Investor must pay up front for purchase and GENNEVA use part of you money to buy the gold. That is why you wait and wait for your gold.
2. They must keep on growing and growing the members to build up the PONZI Pyramid exponentially so that all the new investors money, only the 20 unit part, is used to pay the old investors’ hibah, etc.
3. Every now and then they do sleight of hand to pass you some own branded GENNEVA or SAMUDRA gold, maybe fake gold coated tungsten fools’ gold.
4. They make you play musical chairs game to wait and wait after you paid, maybe for old Buyer’s gold being sold back, or gold being handed in for inspection during rollover. So they did not back every Buyer’s order with real gold but just pass the same piece round and round. Some say only 50% backed, some say 70% back. Whatever, they are playing you for fools.
5. When you sell back, they make you wait and wait and worry like mad for your money!
6. The consultants say hibah and buy back at original price guaranteed BUT in writing they say these are “discretionary” — in the SALE agreement, in the signed acknowledgement form, and in the news ads in the papers. If They fail or refuse to pay you hibah or to buy back, you cannot even sue them.
7. When the pyramid stops growing and there are more sell back than buying in, it is time for their exit strategy. By this time they have a lot of cash in their pockets — your money. They may just abandon the company like in S’PORE, never send lawyer to fight the court case, OR they may secretly arrange for BANK NEGARA, Police etc to raid Them, then they ask every one to blame the GOVT for spoiling the party. When this happens, they already hide all the money and gold overseas!!!!
NOT MUCH HOPE TO GET BACK ANYTHING FROM THEM.
DO NOT EVER LISTEN TO THAT ONE CALLED ANON ME. HE WILL LEAD YOU TO FINANCIAL RUIN.
Did not realize that resident troll Anon Me at Uncle Martin’s blog has also been trolling here at this blog…..should have read the comments here much earlier……I missed all the fun reading the nonsense posted by Anon Me.
we dont know the real story behind, may be the company requested bnm, police to intervent so that they dont have to pay back the money to buyer. everyone is asking why the old company was in court hearing in 2009 and still pending judgement and the same directors of the new genneve can open business in 2010? something fishy…..
unique,
That was part of the plan when the bubble get humongous.
Not too far in the future, directors of Genneva and BNM would be discussing behind close door on how to share their exploits.
Will Mahathir and Rosmah be part of it?
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jeenhao,
Kudos! jeenhao, you have very good insight.
This post was done in 26th May 2012. It finally happened.
Thank you for speaking out loud!
Cheers!