Malaysia widens crackdown on gold trading companies

KUALA LUMPUR, Oct 6 (Reuters) - Malaysian authorities have

expanded a crackdown on suspected illegal gold trading
activities, raiding a total of four companies suspected of
taking deposits illegally, money laundering and tax evasion.
A central bank spokesperson confirmed on Saturday that
police and government agencies jointly raided the offices of
gold investment companies Pageantry Gold, Caesar Gold and
Worldwide Far East.
The Friday operations followed a raid by the authorities
earlier this week on the office of gold trading firm Genneva
following complaints the company had failed to pay its clients
and agents. Singapore's Commercial Affairs Department also
raided Genneva's offices in the island republic on the same day.
The raids come as gold is increasingly coveted by Asian
investors looking for a hedge against inflation and to ride the
strong gains in the precious metal's price. The price of gold is
around 11-month highs, driven higher in recent weeks by concerns
that loose monetary conditions in Europe and the United States
will stoke inflation.
Genneva Malaysia has more than 50,000 "satisfied" clients in
the country, according to its official website. It has
affiliated firms in China, Hong Kong, and the Philippines,
according to Malaysian national news agency Bernama.
"The management is working hard looking into the matters and
will keep you posted of the events," its management said in a
statement.
Company officials at Pageantry Gold, Caesar Gold and
Worldwide Far East could not be reached for comment.
Crowds of clients and agents of Genneva gathered outside its
closed branches in Kuala Lumpur this week following the raid,
many of them criticising the operation and calling for the
freeze on its trading operations to be lifted.
"We sell gold bars and have agreement letters for the
transaction and no cash is involved, everything is done using
cheques or online transfer, thus there is no fraud here,"
Nordiana Nasaruddin, a Genneva branch consultant in the northern
state of Penang, was quoted as saying by Bernama.
"We hope the company can continue its operations for the
sake of the 8,000 customers in the state, who are mostly
retirees," she added.
(Reporting by Yantoultra Ngui; Editing by Stuart Grudgings and
Jeremy Laurence)

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