Dato’ Ramanan Ramakrishnan Explains How 17,000 Malaysian Indians Were Cheated By VenusFX
It has happened again, a large group of innocent people swindled with their hard-earned monies – a scandal that gripped the nation of hardworking Malaysians that was unearthed by a prominent social advocator against Ponzi Schemes, Dato’ Ramanan Ramakrishnan.
The press secretary to the Senate President of Malaysia and former treasurer-general of MIC, Dato’ Ramanan, has taken up the mantle to fight for justice and initiated a crusade to pursue the fraudulent perpetrators through the legal system to recover money for the victims.
After joining the victims who are majority Indian in filing police reports against VenusFX, the syndicate that launched the forex scheme sham, Dato’ Ramanan proceeded to hold a press conference to describe how the scam was executed and the ringleaders behind it.
How VenusFX started
VenusFX was believed to be a company registered in New Zealand with a virtual address. Besides Malaysians, the company also accrued investors from other countries. Information was unclear about its management structure and it was said to be under the governance of two Malaysian businessmen in their late twenties. However, since its inception, there were no findings that the business was legal as checks with Bank Negara Malaysia revealed that VenusFX operated without a banking and financial service license.
The company presented itself as a trading platform specialising in dealings with Gold and Silver in the Forex market. It gives out special bonuses whenever someone opens an account. Generally, all investors were promised a massive high return on investment of 480% in just 80 days. However, there was no clear indication of how the ROI was being generated.
The offer of high and quick returns was too good to pass up for some and since its launch in mid-2016, in just a short period of time, a large pool of investors poured in amounts between RM2,000 to RM55 million.
As there was no real forex trading involved to generate the ROI as claimed, VenusFX operated by merely recycling the newly invested funds to pay off the group of initial investors. Inevitably, by September 2016, VenusFX investors began encountering difficulties withdrawing their returns and their capital.
As of today, more than 23,000 victims were swindled, totalling up to an amount estimated at USD 18.1 million (about RM78 million). Based on all the accumulated police reports, law enforcement investigated the company and initial findings showed that VenusFX’s business module was similar to the pyramid system related to the operations of a Ponzi scheme.
Police have taken action and arrested six people including a woman in a series of raids in Kuala Lumpur, Pahang and Selangor; seizing a laptop computer, 10 mobile phones, 10 ATM cards and five luxury cars, a total value of RM750,000.
Aged between 28 and 35, the group have been remanded for 21 days under Section 3(1) of the Prevention of Crime Act (Poca). Police and the victims of these frauds are hoping that the arrests will lead to a larger recovery down the line, in a bid to regain their money from VenusFX.
With a large number of people that responded to the scam, it is worrying how quickly citizens jumped on board. People were quick to believe any wealth generating ideas, especially during hard times witnessed in Malaysia in recent years.
The problem comes with the recent economic downturn that is continuing on its nosedive towards recession, forcing us to look for ways to stretch our money, which is what these fraudsters are banking on. It is the best time and opportunity to lure innocent people into thinking that this is a way out of a financial rut, to grow our dwindling savings and increase income.
The only defence we have is to take extra precaution when we are approached by friends or strangers alike to invest in schemes that promise high returns with low risk and in a very short period of time.
Another sign that a scam is in front of you is the lack of transparency in their information on anything ranging from their company founders, business dealings, products, and services or simply put, if whatever questions you have are deflected or not answered, it’s a warning sign.
Nowadays, it pays more to say no to questionable investment schemes rather than burrowing up a hovel of financial woes. Avoid them at all costs.