Proven Oil Asia in trouble? (3)

MAS (Monetary Authority Singapore) has added "Proven Oil Asia" to its "Investor Alert List":

I wrote the first post about this scheme almost two years ago. Should MAS have taken action more early? It all looks rather slow. Surely they must have known about my postings, they could have contacted me for more information, which they never did.

I often complain about the slow enforcement in Malaysia, but in this case they clearly beat Singapore (here and here), and the same applies to the media.

Proven Oil Asia in trouble? (2)

Five days after my last posting the MAS (Monetary Authority of Singapore) put the Capital Asia Group on their "Investor Alert List":

The company still advertises the Proven Oil Asia scheme on their website, mentioning "high returns from secure investments", "proven track record / non speculative", "proven strength of Conserve Oil Group Inc.":

Proven Oil Asia in trouble?

I have written several times about Proven Oil Asia.

The reason I wrote about this investment scheme was that a very similar one (Proven Oil Canada) in Germany seemed to have run in problems. Many of the names connected to the two schemes were the same. At the very least I had expected the authorities to have a close look at the scheme.

Both the Securities Commission and Bank Negara in Malaysia did indeed take action, Focus Malaysia and Kinibiz have written articles about the scheme.

In Singapore however I have not noticed any action whatsoever from the authorities, the media have also not given it any attention.

That might have been a mistake.

From recent information it looks like not only Proven Oil Canada but also Proven Oil Asia has run in some serious troubles.

MNP Ltd. ("one of Canada’s leading firms in Corporate Recovery & Restructuring") has a webpage devoted to Conserve Oil Group Inc., COGI Limited Partnership and Canadian Oil & Gas International. On October 26, 2015, MNP Ltd. was appointed as Receiver and Manager of these three companies.

Of interest are several of the articles listed on the webpage, for instance this one, some excerpts:

 

 

 

 

Another article with some excerpts:

 

 



 

 

The difficult structure of companies:

The convoluted structure might be a headache to unravel for investors in the schemes, but a field day for the lawyers involved.

In Germany a group has been formed by investors in the Proven Oil Canada scheme, the website is mostly in German, but Google Translate might help.

BNM: Capital Asia Group (M) "unlicensed activities"

I wrote before about the Proven Oil Asia scheme, most notable here.

In an interview with Kinibiz, Jonathan Quek, one of the investment scheme’s promoters in Malaysia, it was mentioned:


Amid the criticism, however, Quek revealed that the investment scheme’s promoters are engaging the authorities in order to bring the scheme under regulation. “We are doing our best to have our lawyers to work with SSM and SC to see how we can regulate this product,” said Quek, though declining to comment further on what progress had been made in this regard. “The last thing I want is for us to be raided by SC and Bank Negara, so we are taking a very active approach to contact all these regulators.”


Things might not have gone exactly "according to plan" with the regulators.

First of all the Securities Commission put Proven Oil Asia on it's list of unauthorised websites (I blogged about it here).

And secondly Bank Negara Malaysia has put Capital Asia Group (M) Sdn Bhd (partner of Quek's Wealth Insider Group" and involved with Proven Oil Asia) on it's alert list due to "unlicensed activities":

"Bank Negara Malaysia (BNM) would like to alert the members of the public a list of companies and websites which are neither authorised nor approved under the relevant laws and regulations administered by BNM.

This list has been compiled based on information, complaints and queries received by BNM regarding the activities of the persons and entities concerned. This list is not exhaustive and the Bank will update the list periodically from time to time. The list is intended to serve as a guide to the public.


The public is advised not to make any deposit or investment with individuals and entities that are not regulated under the relevant laws and should conduct the necessary checks with the relevant authorities if there are doubts regarding any schemes offered."

Proven Oil Asia on SC list of unauthorised websites

I have written several times about "Proven Oil Asia", most notably here and here.

The Securities Commission of Malaysia has included "Proven Oil Asia" on its "List of unauthorised websites / investment products / companies / individuals" (updated as at 9 April 2015):

The website that is mentioned (http://www.provenoil-asia.com/) now links through to the website of Conserve Oil: http://www.conserveoil.ca/

Certainly an interesting development. The "Proven Oil Asia" scheme is also sold under other names, but the mechanics seem to be the same.

Proven Oil Canada, Proven Oil Asia and landbanking

I wrote before about oil schemes: Proven Oil Canada and Proven Oil Asia.

In Kinibiz, Khairie Hisyam wrote two articles (both are behind pay wall):

Guaranteed returns from crude oil trading?

"Can physical crude oil trading guarantee lucrative returns? One such investment scheme has arrived on Malaysian shores and a number of investors have signed up on the promise of 12% return per annum. The big question mark, however, is whether it is too good to be true. In a two-part series, KiniBiz talks to the scheme’s insiders to find out if the lucrative returns are for real."

Is the crude oil scheme too good too be true?

"While much light had been shed on the crude oil investment scheme in the previous part of this series, a deeper concern for investors would be one name reportedly linked to the scheme — Jürgen Hanne, who was reportedly convicted of fraud. Amid the questions and controversy, however, the investment scheme is engaging the authorities in seeking to be regulated, said the scheme’s promoters."


I like to add that there seem to be some links between these oil schemes and with land banking. Jürgen Hanne (allegedly linked to Proven Oil Canada and Proven Oil Asia) was previously involved in property deals (and possibly in land banking). Monika Galba (Proven Oil Canada) worked before for Walton Europe. And Winston Yau Kwok Seng used to worked for Walton International Group and is now President & CEO of Capital Asia Group which company is marketing the Proven Oil Asia scheme.

When Winston resigned from his job he was sued by his former employer, Walton International Group. The court case was a very interesting affair, a few snippets (emphasis mine):


[1]       This case concerns a very bitter dispute between employers and two of their former key employees, one in Singapore and the other in Malaysia. According to the plaintiffs, this is a story of the defendants’ pride, revenge, greed and conspiracy. The defendants readily agreed that there was a conspiracy, but to them the conspirators were the plaintiffs themselves and some of their senior employees who sought to use them as scapegoats for the low morale of the plaintiffs’ staff and poor sales in Malaysia caused by mismanagement. The dispute spawned numerous causes of action, including solicitation of staff, unlawful interference with trade, spreading of malicious falsehoods, defamation and breach of the duty of confidence.

[2]       A secret tape recording that revealed no secrets, statutory declarations allegedly sworn before a Commissioner for Oaths who was not present, astounding admissions by the plaintiffs’ top management and unexpected withdrawals of very serious allegations made in affidavits peppered a long trial that lasted more than 13 weeks. There were 55 witnesses, 16 volumes of affidavits of evidence-in-chief (“AEICs”) and 9,772 pages of documents in the Agreed Bundles. The evidence could not have been more contrasting. Whether a lunch that was crucial to the plaintiffs’ case on solicitation was a jolly and enjoyable occasion to celebrate a birthday or a secret tense gathering with threats made to harm the attendees was the subject of intense debate. Whether or not there was a birthday cake and a “happy birthday” song at the said lunch was also disputed. This led one counsel to accuse the other side’s witness of hallucinating at the lunch.

[4]       The 1st defendant, Mr Winston Yau Kwok Seng (“Mr Yau”), Walton Singapore’s former Executive Vice-President, Asia, was responsible for the operations of the Walton group in Asia before he resigned on 17 January 2008. He was paid around US$5 million per annum.

[11]     According to Mr Doherty, Mr Dirk Foo revolutionised the organisation of the Walton Singapore’s sales department by implementing a four-tiered structure with Division Managers at the top, followed by Group Managers, Team Managers and Consultants. While Consultants were paid a commission on their sales, Team Managers earned commissions on the sales of all the Consultants in their teams. Group Managers had an overriding commission on the sales made by all the Team Managers and Consultants in their group. Finally, Division Managers were entitled to a commission on their own sales and an override on commissions earned by all the members of their teams. At the material time, Walton Singapore had 5 Division Managers, 10 Group Managers, 100 Team Managers and between 300 to 400 Consultants.

[121] ...... Just for the LB component, [Mr Yau] drew up a commission structure of:

DM    13%
GM    11.5%
TM    10%
Cons   7%

It looks like the commissions on land banking are very hefty indeed. I would be curious to know the commissions on the oil schemes. My guess is they will be hefty as well. But if there are indeed hefty commissions, how does the alleged guarantee work? Surely the sales people are not going to pay back the money they earned.

Walton International Property Group (M) Sdn Bhd by the way was raided and subsequently fined by Bank Negara Malaysia in 2009 and 2010.

SGX advertizes company featured on the MAS Investor Alert list (3)

Yesterday I wrote about the investment schemes that are being sold by certain marketing agencies, both in Singapore and Malaysia. Coincidentally, Focus Malaysia wrote on the same day the following:


"The flyer looks harmless enough. In simple graphics, simple terms and bad grammar, the reader is told he or she will get a return of 3% every three months on fixed payment dates, from "proven track records". That is 3% per quarter, or 12% a year. All one has to do is invest a minimum of RM 10,000 to buy crude oil.

It looks simple enough but how does a person like me, who isn't a commodities trader, buy crude oil?

The information on the flyer tells me the investment plan has been carried out, with success, in another country. Apparently, this scheme has "successfully raised over Euro 300 mil" through its "11,000-strong client base in Germany, and has distributed over Euro 37 mil to investors".

How the investment plan works is, I will be buying physical crude oil at a 3% quarterly discount from an established Canadian oil and gas (O&G) company, from its existing producing oilfields. The company will then sell the oil to its clients at the "normal" rate, which means an automatic 3% in my pocket.

A quick Google search reveals the Canadian company is under investigation in Germany for a similar investment scheme. According to an article in the German BusinessWeek, the company running the crude oil investment scheme denied a request for financial statements and was not forthcoming in revealing its shareholders, which raised questions. It is also questionable that the company aims at investors outside Canada instead of where its home base is.

If this company is under investigation in another country, why is it being allowed to run its investment scheme in Malaysia? Do we have loopholes in our legal framework which can be easily manipulated by those looking for a quick buck?

The story is old. Malaysians have seen it time and again. We have seen schemes in every possible form - plantations, gold, property, offshore investment. We all know someone who has lost money in similar schemes.

For all we know, the crude oil investment plan could be legitimate. But that is exactly the issue - we don't know. And we will not know - until it is too late. What is being done to protect investors from being ripped off?"


I am pretty sure the writer, Farah Saad, refers to the crude oil project as detailed here on Infinity Treasures website, which also goes by the name "Proven Oil Canada".

Pity that Focus Malaysia doesn't give the details, since readers should be informed. That is exactly one of the problems in Malaysia, a press who is (often) not sharp enough, and doesn't mention the alleged perpetrators, enabling them to flourish. "Name them and shame them" works wonders, but of course good enforcement is also needed, something that is problematic in the Malaysian context.

On the "Lowyat" forum more information can be found here.

It seems the investment started in Germany, and, according to the Wirtschafts Woche ("Economy Week") magazine, the scheme has run into severe problems. Unfortunately for the readers (and fortunately for the promoters in Malaysia and Singapore), these articles are all in German. Although my German knowledge is slightly "rusty", I will try to translate (with the help of Google) some of their hard hitting findings.

Die schmierigen Geschäfte von Proven Oil (The sleazy business of Proven Oil)
Die abenteuerlichen Argumente der Ölbarone (The adventurous arguments of the oil barons)
Update: Schräge PR-Kampagne von Proven Oil (Update: Weird PR campaign of Proven Oil)
Das Abkassiermodell Proven Oil (the business model of Proven Oil)
Proven Oil treibt Anleger in hoch riskantes Abkassiermodell (Proven Oil drives investors in high-risk business model)
Ölbarone in Not (Oil Barons in problems)

Proven Oil sued the magazine (as mentioned in the fourth link), but only a few sentences had to be amended, the huge majority of the claims was rejected. Proven Oil had to pay 80% of the cost of the court case, Wirtschafts Woche only 20%. With that Proven Oil had basically scored an own goal, since every one who would still sell the investment product in Germany should by now know what they were selling.

Some snippets:

"Most of Berlin's oil funds stopped the payouts to their investors."

"If you look closely, the investment idea turns out to be robbers gun: The self-presentation of Conserve Oil is outrageous, in the balance sheets it crunches. And who immerses himself in the network of companies of the Canadian oil barons will come up with the name of Jürgen Hanne. He became known in Germany as he aimed big before the year 2000 with real estate funds for nursing homes. "Dr. Hanne funds" were a disaster for investors. Hanne was convicted of fraud and fled on parole to Canada."

"Prior to his real estate career in East Germany Hanne was already in the oil business. In a similar way as today's Proven Oil tries to catch investors: promising high returns, suggesting guarantees, collecting money and first cashing in himself. From the money invested around 20 per cent goes to "additional costs"."

"In fact, the management should know more about olive oil than normal oil - both Conserve Oil chief Crombie and his vice Yoshiki Nakamura come from the hotel industry.

Questions about their qualifications were not answered"

"What happens to their money, investors Proven Oil can barely comprehend. Their German fund companies do not invest directly in Canada, according to the scanty information in the annual reports. More revealing would be the balance of the property companies in Canada, in which the fund companies participate. Their balance sheets do not get sent to the investors."


The below scheme shows how Hanne, his sons (Sebastian Hanne and Alexander Gramatzki), his trusted lieutenant (Jurgen Hainzl) and wife (Monika Galba) are all part of the not transparent organisation scheme:

The below new property scheme from Bridge Cap shows how Hanne and David Crowbie (both from Conserve Oil Corporation and the Proven Oil project) are interconnected with the Helwerda's from Sproule, the company that was supposed to independently verify the oil claims of Proven Oil. That independence looks now highly questionable.

In my previous blog article it seemed that "The Exit Scheme" has run into problems and has stopped payments in Singapore.

According to the above, the "Proven Oil Canada" scheme has similar issues and most of the funds have stopped payments in Germany.

Bridge Gap wants to collect another 20 Million dollar for a hotel project in Canada. Any takers?

SGX advertizes company featured on the MAS Investor Alert list (2)

I wrote before about Infinity Treasures and the fact that they had advertised on SGX's website, through the means of Google AdSense. I wrote:


"Does the SGX really need the money of AdSense that they allow on their website targeted advertisements selected by Google (not by SGX), which might include advertisements for websites that are on the Investor Alert List of the MAS?"


I am pretty sure some people within SGX are reading this blog, but SGX has not changed anything at all, they still feature Google AdSense advertisements which content they don't control.

In the mean time, it seems that one of the schemes promoted by Infinity Treasures has run into problems. The Straits Times published an article "US scheme late in paying $64.8m to Singapore Investors" (the article is unfortunately behind a pay wall) written by Tee Zhuo. Some snippets:


Angry investors here are demanding answers from the operators of a United States investment scheme. More than 200 people here could be affected, with $64.8 million yet to be paid back by the scheme, called The Exit Scheme.

One investor, Mr Amos Lee, 42, has lodged a report with the Commercial Affairs Department.

The US operators admit there are problems, but say they hope to return money to investors.

Infinity Treasures, the marketing agent here, is on the Monetary Authority of Singapore (MAS) Investor Alert List. The MAS website says the list shows "unregulated persons who... may have been wrongly perceived as being licensed or authorised by MAS".

Returns have been fully paid from June to October 2012, but those who put in money from November 2012 have faced problems. Some have yet to get payments due six months ago.


I wrote before:

"High returns are always accompanied by high risk, but there is no mentioning about risks.  As a personal choice, I avoid these kind of investments like the plague, these investments are sold (not bought), often the hard way."


I hope that the investors get their money back, but I do see great worries when I read the story in the Straits Times. Investors really should have done their homework first, but I pity those that made their investment based on the fact that it was advertised on the SGX website.

Compliments to Bursa, they have chosen not to use Google AdSense to monetize the traffic to their website.

Regarding Infinity Treasures, they call themselves on their website  "a premier asset-based investment firm". That is playing with words, they are simply not licensed by MAS. They are not a licensed investment firm nor an asset manager, they are just a marketing agent. They don't declare how much commission they make on their website, but I am pretty sure it will be huge.

On their Media-tab no news about the Straits Times article yet. And their track record leaves out "The Exit Scheme". All not really a surprise.

More information on the issues at the "Hardwarezone" forum, which also features a newspaper article in Chinese.

SGX advertizes company featured on the MAS Investor Alert list

I went to the SGX website to do some research and by chance I ran into the below advertisement at the bottom of the SGX website:

I was rather curious about which company can guarantee 3% per 3 month in the current climate of uncertainty.

The website of Infinity Treasures can be found here.

I expected a list of managers with their proven track records, lists of long term investment returns of the past, lists of concrete assets that the funds own, detailed year reports, auditors and trustees etc., but I didn't.

Instead I did find many pictures of happy smiling people, and returns offered that sound simply too good to be true:

 

 

High returns are always accompanied by high risk, but there is no mentioning about risks.

As a personal choice, I avoid these kind of investments like the plague, these investments are sold (not bought), often the hard way.

My curiosity increased further when I looked at the website of MAS (Monetary Authority Singapore) at their investor alert list:

Infinity Treasures is listed on the MAS Investor Alert List!

Going back to the SGX website, a detail popped up as my mouse went over the small blue triangle on the right:

In other words, the advertisement is ran by Google AdSense. According to Wikipedia:


"Google AdSense is a program run by Google that allows publishers in the Google Network of content sites to serve automatic text, image, video, or interactive media advertisements that are targeted to site content and audience. These advertisements are administered, sorted, and maintained by Google, and they can generate revenue on either a per-click or per-impression basis."


Does the SGX really need the money of AdSense that they allow on their website targeted advertisements selected by Google (not by SGX), which might include advertisements for websites that are on the Investor Alert List of the MAS?

Frequent visitors of my blog know that I am very much against privatizing stock exchanges (including Bursa and SGX). Stock exchanges should not be about maximizing profits for their shareholders, and thus should never have been listed in the first place.