Swisscash at News This Week Part.3

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09-11-2007: SC Sues Managers of Gold Investment Scheme

by Sharon Tan
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KUALA LUMPUR: The Securities Commission (SC) had filed a civil suit against Powerhouse Asset Management Sdn Bhd and its Singaporean executive director-cum-shareholder, Tan Kok Kheng, to compel them to restitute RM1.93 million to 75 investors.

The suit is related to Powerhouse’s and Tan’s unlicensed investment scheme in gold structured products in early 2006 and the return of a shortfall of money to investors from that investment scheme.

In a statement on Wednesday, the SC said at the time of transgression, Powerhouse and Tan were licensed as fund manager and fund manager’s representative, respectively, which allowed them to carry out fund management activities relating to securities only.

The SC said Powerhouse, through Tan, had ventured into the investment scheme involving gold structured products in early 2006 without its approval, which was in contravention of the licensing conditions.

It said the scheme, which was not approved by SC, promised a net return of 10% on investors’ initial investment over a period of six months. With the investments, Powerhouse purchased and purified scrap gold into pure gold wafers which were sold at a premium in the gold market.

The SC said the fund management company had engaged unlicensed individuals to solicit and receive funds on its behalf for the unapproved scheme, which amounted to RM12.8 million. Powerhouse had also breached the licensing conditions when it disseminated advertisements and promotional brochures to the public without SC’s prior approval.

Following its findings, SC had directed Powerhouse to cease all investment activities and restrained the company from dealing with the investors’ monies by transferring all the monies from Powerhouse’s bank accounts to a SC-appointed trust company.

In Sept 2007, the SC appointed United Overseas Bank (M) Bhd and UOB Trustee (M) Bhd as trustees to carry out the distribution of gold wafers and monies to Powerhouse’s investors.

“To date, the trustees have completed the process of returning the monies to Powerhouse’s investors leaving a shortfall of RM1.93 million,” the SC said, adding that the Nov 5 suit was to compel Powerhouse and Tan to pay the shortfall.

SC had filed a similar suit on Sept 26, 2007 against Kenneth Vun @ Vun Yun Liun, the managing director and shareholder of FTEC Resources Bhd, to compel him to restitute RM2.49 million to the company. The sum was part of the proceeds raised by the company in an initial public offering of which Vun had allegedly misused for his personal use.

Other civil actions taken by the SC includes the case of Ayer Molek Rubber Company Bhd where SC obtained an injunction to safeguard RM20 million of the company’s monies to prevent the company and its solicitors from disposing of or dealing with the monies representing the company’s sale proceeds of several pieces of land in 2006 and 2007.

In the Swisscash Internet Investment scam case, the SC obtained a worldwide Mareva injunction to prevent the disposal of assets by the defendants and also secured a court order to direct one of the defendants, Amir Hassan, to transfer RM35 million of Swisscash monies held in bank accounts overseas back to Malaysia.

Source : http://www.theedgedaily.com/cms/content.jsp
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