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.
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