Martin Lee @ Sg
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Genneva Gold in the News

This news report on Genneva Gold was broadcasted on Channel 8 last night.

For those who do not understand Mandarin, this is the summary:

  • Genneva Gold is in trouble and unable to fulfill its monetary and gold obligations to its customers.
  • Amount of gold involved is suspected to be more than 500kg.
  • Company declined to be interviewed and only allow buyers to enter its premises.
  • Their scheme works by allowing customers buy gold from Genneva at 20-30% price above spot rate,  but the company will give a cash rebate of 2% every month.
  • Customers given many reasons for delay in payment. They were given “payment vouchers” which were not redeemable.
  • Lawyers warn that customers dealing in such schemes should always be aware of the full terms and conditions, and more importantly the financial strength of the company. There is a lawsuit ongoing.
  • CASE reports that complaints against such companies have been on the rise and they are concerned about the companies.
  • As the schemes are not regulated, they do not fall under the purview of MAS. However, at least three of these companies have been already included in the MAS investor alert list.
  • Customers relating their experiences and unhappiness.
  • A group of 20+ investors have gone to CAD to ask for help. The police declined any comments as to whether they have commenced any investigations.
  • Another two gold companies have offered rescue or buyback plans for affected Genneva customers. Customers are required to join their schemes to get a good price.
  • The public is warned to check the financial strength of these companies before doing any business with them. These two companies are actually operated by the same person and they are also on the MAS alert list.

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6 comments
Annoying Me says 7 years ago

News from BusinessTimes Singapore 16 Oct 2012:

Tharman states MAS stand on gold buyback
But if needed, it will refine its regulatory framework

[SINGAPORE] Gold buyback schemes are currently unregulated, but the Monetary Authority of Singapore (MAS) will continue to monitor market practices and refine its regulatory framework if necessary, Deputy Prime Minister Tharman Shanmugaratnam said yesterday.

In a written reply to a parliamentary question that comes after this month’s raid on the offices of gold trading company Genneva Pte Ltd by the Commercial Affairs Department (CAD), Mr Tharman, who is also Finance Minister and MAS chairman, added that running a fraudulent or deceptive scheme is an offence under the law regardless.

“Like most other financial regulators around the world, MAS does not regulate schemes that involve investors acquiring direct ownership of physical assets, such as property, gold, art or wine,” said Mr Tharman.

However, it will continue to monitor market practices and investment landscape trends, and refine the regulatory framework where necessary, he said.

Mr Tharman urged investors to consider how returns in any scheme are generated and find out whether there is any protection or recourse should the operator fail.

http://www.mas.gov.sg/en/News-and-Publications/Parliamentary-Replies/2012/Reply-to-Parliamentary-Question-on-Gold-Trading-Schemes.aspx

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Annoying Me says 7 years ago

A very good summary of the Genneva gold scam.

http://www.financetwitter.com/2012/10/genneva-gold-another-collapsing-ponzi-scam.html

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Anonymous says 7 years ago

Can only say they deserve it. You sow what you reap.

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henry says 7 years ago

The allure of gold will always be. It is historical and many speakers within the financial industry help to fuel this allure, by suggesting that gold should be part of a portfolio.
Regular price increases also tempt people.

Gold is a metal. It is difficult to use as a currency. It is also necessary to convert it into a useable currency before it can be deployed.
Take the case of Zimbabwe. Inflation is at crazy heights and their economy has been in near collapse since 15 years ago.

It is still around. It still uses its own currency, although, to pay for milk, you would need a trillion Zimbabwe dollars.
Yet, it does not use gold as a currency. The US$ is widely accepted instead.

“To hedge against inflation” is the usual reason put forward to own gold. Inflation fluctuates on a monthly basis. Annualised and it is within a range of 2% to 4%. Using gold to neutralise this is quite futile. Depending on location, inflation rates vary.

In Singapore, our inflation rate is affected by COE and car prices and housing costs. Take these 2 items away and the rate stabalises to just under 3% annually.
That being the case, an investment in the stock market that yields 5% to 6% is very realistic and very attainable. If one is greedy, it can be more.

The talk about high inflation, high commodity costs, high fuel prices, high property prices must be seen in perspective. It is cyclical and and not perpetual. Even the Depression did not last, and the stock market was still functioning. The market, any market never closes.

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passerby says 7 years ago

you didnt mentioned that one being interviewed mentioned abt passing their gold to the co, didnt receive any payment and the gold.. but eventually they managed to get back half of the gold amt.. and still waiting for the rest.
this is weird. if the co cannot pay $$$ why let them take back the gold when its safer to sell it outside at a 20-30% + loss?

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    KLbull says 7 years ago

    It’s always an ongoing battle between the two conflicting emotions of greed and fear, so prevalent in games of chance where you hope to win, but fear to lose, both at the same time. A casino and a bull stockmarket are where this conflict is often seen in players.

    In the case of Genneva, if you still hope the company can survive long enough to return you all the gold and the discounts, you may refuse to take an immediate 30% loss by selling outside – that’s probably greed talking. It’s what led you to buy overpriced Genneva gold in the first place, expecting unrealistic monthly returns of 2%. Many people will not accept a big loss when there’s a sliver of hope remaining, others will just not admit to a mistake and cut loss. Decisions involving money are not always rational. And don’t forget, Genneva consultants are also on the sidelines influencing buyers.

    Reply
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