Genneva freeze not fair to investors, says Dr M
Zurairi AR, The Malaysian Insider
Former Prime Minister Tun Dr Mahathir Mohamad appeared today to defend gold trading firm Genneva Malaysia, and asked Bank Negara Malaysia (BNM) to lift the suspension of its assets.
He made his remarks today despite a recent explanation by Deputy Finance Minister Datuk Awang Adek Hussin in Parliament that Genneva’s liabilities exceeded its assets and that showed the company was unable to pay returns to its investors.
“I don’t know what is wrong with the Genneva thing, they claim that they aren’t operating this pyramid scheme,” Dr Mahathir told reporters after addressing the 3rd World Conference of Riba (usury) here.
“Investigate first because if you stop the transaction, people’s money will be locked out and they cannot use, they cannot even get the gold … They deserve fair treatment.”
He also urged the authorities to regulate gold trading as he extolled the advantages of keeping and buying gold.
Genneva’s gold, which was advertised as syariah-compliant gold, was launched in December 2010 by Dr Mahathir, and a number of its traders were spurred on by the former PM’s recommendation.
Dr Mahathir, who was prime minister for 22 years before retiring in 2003, is an advocate of the gold standard and has urged for its adoption in global trade following the decline of the US dollar.
In January at the International Conference on Global Movement of Moderates dinner, Dr Mahathir had urged struggling economies to value their currency to gold instead of the US dollar.
“You don’t really have to exchange gold but to value your currency against it.
“Then you can have a business based not on speculation or manipulation, but on real value,” he said, while predicting a return to a Bretton Woods-style fixed currency exchange in coming years.
The Bretton Woods Agreement is an international trade agreement signed after World War II, which benchmarked the currencies of its signatory countries against gold and the US dollar.
Genneva’s bank accounts and other assets have been frozen by BNM since October 1, following suspicion that the company allegedly breached several banking and financial laws such as illegal deposit-taking, money laundering, tax evasion and appointing agents without licence, after several people lodged complaints with the police.
Genneva has some 60,000 customers and a monthly turnover of RM2 billion, according to its traders interviewed by The Malaysian Insider last month, but the company’s website states 50,000 customers and a turnover of RM3 billion.
Bank Negara Governor Tan Sri Zeti Akhtar Aziz has also said the central bank was fast-tracking investigations into the controversial gold trading company so that its customers would not be kept waiting for too long.
Genneva, Pageantry Gold Bhd, Caesar Gold Sdn Bhd, Worldwide Far East Bhd and Bestino Group Bhd are among 25 individuals and companies offering unlicensed activities that were placed on an investor alert list by the central bank last year, double the number from 2010 and the highest on record since 2003.
