On the 1st of October 2012, Genneva Malaysia was raided by both the authorities in Malaysia and Singapore for suspected offences including illegal deposit taking, money laundering, tax evasion and avoidance, false description (misrepresentations), appointment of agents without licence, and failing to lodge statutory documents.
In Malaysia, Genneva Malaysia Sdn Bhd, a gold trading company that has been the subject of a literal run by its customers, is under investigation by Bank Negara Malaysia (BNM) for alleged “financial improprieties”.
Its Jalan Kuchai Lama offices were raided by BNM yesterday. A number of employees were taken in for questioning. BNM not only seized all the documents and records of Genneva Malaysia but also seized all the stock of Gold and cash as well.
Genneva model is to sell specially marked gold to customers at a premium to the market. As of writing, it listed a price of $90 per gram on its website. The indicative retail gold price on the open market was about $70 per gram. Thus, Genneva investor pays a premium nearly 30% more for their gold. Genneva customers who hold on to their Genneva gold investment will a monthly 2% so-called discount off its list price. Genneva undertakes to buy back the gold in after the 3 months contact at the list price (the fine print on their contract stated that they are illegally obligated to buyback at the spot market price), and customers pocket the discount. Assuming a monthly rollover, they stand to earn as much as 24% year. Some customers have been offered a discount of as much as 2.5%.
Three Genneva directors of Genneva Sdn Bhd – Marcus Yee Yuen Seng, Ng Poh Weng and Chin Wai Leong, who are also directors of Genneva Pte Ltd – 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.