To: Genneva Malaysia Supporters
I have followed with great interest and intrigue some of the events that unfolded recently pertaining to the fiasco surrounding the raid orchestrated by BNM on Genneva Malaysia Sdn Bhd (Genneva). I would like to give my two cents worth on this matter. BNM has issued several public announcements regarding the gold raid and has been warning the public to be wary of gold scams and more recently informing the public of the reasons why action against Genneva was justified.
Other than that, there is no telling of the offence or series of offences which Genneva has actually committed and now almost a month passed and we still have no result. To me all these announcements by BNM are nothing more than mere public relations posturing, the need to remind the public from time to time that their action was the right course to take for the larger public good.
That is trying to make the ends justify the means, all in the name of protecting the public interest. But whose interest is BNM really purporting to protect? What about the interest of the 60,000 or more members of the public who are customers of Genneva and now financially stuck because of BNM’s action. Are they not victims too, their predicament brought about by an overzealous financial watchdog?
Is the interest of a few shadowy bogeymen based on some flimsy complaint going to outweigh and compromise the interest of all those people who had actually doled out their hard earned money to pay (quid pro quo) for the gold that they bought from Genneva? Is then BNM’s action seriously flawed?Some may ask why there are no straight answers.
Unfortunately there isn’t. Anyway, an answer from anyone of us is irrelevant, not even from the management or directors of Genneva (even though it may turn out to be the truth). That’s because it all depends whether BNM is acting on good faith. Otherwise everything you say is irrelevant and BNM is not going to back off. However the positive side is that all authorities holding power in this country including those exercising executive power are subject to checks and balance.
No one is above the law, including BNM or even the police. That is why in a democratic nation like ours, we have the judiciary to check if there is any abuse of power by the authorities. I am sure everyone is familiar about this and would have heard of the authorities being taken to court for abuse of power.
Every bad decision or action carried out by a public authority may be challenged in court when that decision or action is done mala fide or made in bad faith. The courts have got the powers to make declarations or injunctions or other judicial reliefs against bad decisions made by authorities wielding administrative/enforcement power.
Having said the above, let’s look to see if Genneva has got any merits to its case. By the way, points discussed here are not exhaustive. Is Genneva’s business illegal?The primary issue to this controversy is whether Genneva’s business is legal or not? The secondary issue is whether Genneva had acted legally in conducting its business or not? If the answers to both questions are in the affirmative yes, then Genneva will have nothing to fear.
As the Chinese saying goes, real gold does not fear the test of fire. If Genneva’s business is legal and the company did not do anything illegal, then all other issues (such as the sustainability of the business, whether it has enough working capital, whether it has enough assets against liabilities) are irrelevant. BNM will have difficulty pin-pointing a charge.
They can drag the case but they cannot charge.Sad to say, there are many detractors and critics of Genneva who have jumped into the fray with the authorities and are quick to brand Genneva business as illegal, hurling empty accusations that it is, among other things, a ponzi scheme etc. Many have gone overboard and stigmatized Genneva’s customers as greedy and asking for it. Of late, there appears to be a tug of war between the authorities and public by-standers to gain public support in the mainstream and alternative media. All that to smear Genneva and its customers name.
It is therefore so important that everyone in Genneva must stay focused, strong and remain resolute. All customers of Genneva will know the modus operandi of the company. We all know the obvious, that Genneva sells gold. No matter how long, gold is ultimately delivered to the buyer. The unshakable fact is that no one has provided any proof that Genneva has cheated. Sad that this unfortunate incidence which is orchestrated by some unseen hands, has landed a whole lot of people (myself included) in a financial quagmire.
But why is it that some people are blindly accusing Genneva’s business as nothing more than a Ponzi or illegal deposit taking scheme? A quick accusation is that Genneva charged a high premium for the gold. But is it that simple? Does a business become illegal if gold is sold at a premium price? Even if done on a willing buyer, willing seller basis? No one was arm twisted to buy or part with cash right? So why shoot Genneva down? In every business, profit is the main objective. That is why a seller hopes to sell his wares at a premium because that is where the profit is. Any court of law will agree with that.
Is it wrong and illegal to mark up 20% to 30% from the prevailing market price? Banks for instance, is it wrong to mark up a basket of foreign currencies and sell it to the public and earn cool dividends for its shareholders? Alternatively, for departmental stores, is it wrong to mark up a whole range of their wares and sell it to the public and if you are a member you get rewarded with cash vouchers for your next purchase?
Will BNM raid all these companies and question their business sustainability? If not, then why did BNM single out the gold trade generally and Genneva specifically and question the sustainability of its business? Let’s face it, like every business in Malaysia, Genneva makes a percentage of profit from every sale.
So even if a slice of the profit were to be taken off for commissions and hibahs, there is still ample profit left in Genneva’s kitty (by that I mean the firm’s account). Now what is the difference between a firm’s account and a trust account? We all know that when we buy gold from Genneva, everyone pays money (making up the purchase price of the gold) into a trust account maintained by Genneva.
What’s a trust account? Even a first year law student would know the significance of a trust account. Presumably and I hope those guys at BNM would too. Simplified, trust account means the holder (of that account) is making it known publicly that all monies in that account do not belong to the account holder. Instead the money is held in the capacity as a trustee.
Monies in that account may only be dealt with according to the terms of the trust, and in this case presumably it is conditional upon the completion of the sale and purchase of the gold in its entirety. The condition of the trust will be completed once the gold has been delivered to the buyer. Genneva’s profit (i.e. the purchase price paid by the buyer less the actual acquisition cost of the gold) too will be transferred into the firm’s account. So by logic, won’t there be a big discrepancy if you compare the two accounts, the one belonging to the trust and the one belonging to the firm?
Now then, which account is BNM referring when they went public to say that Genneva has not got enough funds (or assets) to cover its liabilities? I wish BNM will make itself clear on this point because there is a vast difference in making your allegation. If monies in the trust account are found to be lacking, then it will certainly be a case of CBT (criminal breach of trust). If it is the firm’s account that is found lacking, then it is not CBT because how Genneva uses its money is its own business. Similarly how Genneva generates more money from its own account is…well…Genneva’s business!
If Genneva wish to throw back some of its profits and share it with its customers as hibah or some other customer reward scheme, so what is the problem there? Payment of the hibah is entirely discretionary so if the company does not make money, there is no hibah to share out. Customer Reward/Loyalty programmes should not sound alien to us.
Numerous companies and departmental stores offer such schemes to reward its customers for their loyalty. Thus we see a host of cards waiting to be signed up, the Bee-Card, Tee-Card, Jay-Card etc. The essence is if you spend money buying their wares, you get back a certain percentage of money. Does it matter if the money comes in the form of vouchers in money’s worth? Is it a form of hibah too?
Would the same kind of people who labelled Gennevians as greedy, be quick to also label their wives, husbands, mother, father, sons, daughters etc greedy too if they go all out on members days to buy out everything under the sun and spend like there is no tomorrow in order to get a few ringgit of “hibah” from these departmental stores? Now before you take out your cash voucher and cash it in, have you thought about whether BNM is going to sneak peek into such transactions and question whether the business of the departmental store is sustainable or not?
That is because BNM might end up with sleepless nights worrying (out of public interest) that the cash voucher you are holding may turn out to be worthless paper in the end. Yes another point which I may add. Unlike Genneva, these departmental stores do not buy back their wares once sold. But Genneva on the other hand does.
A customer may sell his gold back to Genneva if he wants to and this can be done by making an offer of sale to the company but of course it is the company’s discretion whether it wants to buy back or not. Similarly Genneva cannot compel a customer to sell the gold back to the company and the customer may refuse to do so. Going back to the question whether or not it is a ponzi scheme? The answer may already be found in the memo issued by Genneva’s GM.
I would perhaps ask the following pertinent questions instead. Will a ponzi scheme take the trouble of setting aside monies paid by people into a trust account so that the monies will not mix with those in its own firm’s account, thus making the two highly distinguishable? Would a ponzi scheme give you back your money in the weight of gold instead of just paper? Would a ponzi scheme be able to last so long when it has been giving out hibah consistently over the past 3 years as promised?
Has it ever happened before that a con job has gotten so much support from its “victims”, especially when credited with so many “likes” on facebook? I am sure a court worth its salt will carefully study all relevant issues pertaining to this case in order to find the right answers.I wish to end here by saying (perhaps reminding) everybody that no one will help you if you don’t help yourself first.
We cannot expect the directors of Genneva to do much because they are the “suspects” in this investigation, remember? If they so much as come out to make a public statement, he/she will be the first to go behind bars for obstruction in an ongoing investigation. Their situation is sort of like being trapped in quick sand. The more vigorously you struggle, the faster you sink and die.
So what can we do?
The best course of action is to start a court action. Do not get confused, the court action is not to sue BNM (or the government) for the return of your money or gold. I wish to suggest starting a class action at the High Court against BNM (and others) to obtain a court order for a declaration/injunction/specific relief with regards to the questions posed above. A judicial review as to whether BNM has acted outside its powers will be extremely helpful in getting Genneva released.
As customers of Genneva who have monies deposited in Genneva’s trust account, we are all interest parties and as such we have the locus standi to file such an action. Imagine if Genneva has 60,000 plus members and each member contributes RM10 for the cause, we will have RM600,000.00 to fight our case.
If everyone pays RM20, there is a total of RM1.2 million. Now that is a force to be reckoned with. With that kind of money, we may get the best lawyers in the country to fight for our case. Karpal Singh is a good contender and being in the opposition party, I am sure they too will be mighty interested to see what kind of dirty tricks that is up the government’s sleeves. If there is general consensus amongst you all out there, I will be the first to chip in both money and time to help keep the ball rolling.
What say you?
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