On 21 February 2023 during the parliamentary seating, a member of parliament for Kepong, Lim Lip Eng had make a statement alleged that there are Ponzi Schemes, Illegal Deposit Takings, and Investments made via ‘Cash Trust Products’ through seven trustee companies which included:
1. UBB Amanah Berhad
2. ZICO Trust (M) Berhad
[Langsung] Sidang Dewan Rakyat 21 Feb 2023 (3 Hr 41 Min 55 Sec)
Please watch from 3 Hr 41 min 55 Sec
In response, I like to offer a timeline on events that led to the above comments. This is because the above is not a new incident. It spanned across several years. One of the trust company MP Lim mentions, ZICO Trust (M) Berhad, a member of SGX listed ZICO Holdings Inc, had only commenced its trust services in Malaysia on 11 January 2023.
Here, I would like to state my own views on them so that you would be notified of these events and thus, form better conclusions on them. They are as follows:
[24 May 2022] Cash Trusts Said to be Ponzi Schemes
The article stated that four bodies: ATCM, LIAM, MFPC, and FPAM have brought their grouses on Cash Trust Products to MP Lim. It had reported two remarks by MP Lim, where he’d claimed that ‘There is no proper regulation by Bank Negara Malaysia (BNM) or the Securities Commission (SC) on these trust companies.’
Several Cash Trusts Said to be Ponzi Schemes
1. ATCM = Association of Trust Companies Malaysia
2. LIAM = Life Insurance Association of Malaysia
3. MPFC = Malaysian Financial Planning Council
4. FPAM = Financial Planning Association of Malaysia
On the same day itself, the Edge had issued a separate article on MFPC where it denied its intentions on bringing such ‘grouses’ to MP Lim. But from this article, MFPC mentioned that it raised the cash trust issue to Bank Negara Malaysia (BNM) and the Securities Commission (SC).
Industry Groups Says Cash Trust Issue made known to Regulators
[24 and 25 May 2022] UBB’s Responses to the Edge Article
UBB posted two articles on their website in response to the first article that has been issued by the Edge. They are as follows:
Un”Trust”worthy Reporting by the Edge
Open Letter to the Edge
From my end, I wrote an article to offer my views on the above article. Such has been posted on WGLegacy.com on 30 May 2022.
Response to the Edge’s Article: ‘Several Cash Trusts said to be Ponzi Schemes’
[21 July 2022] UBB Amanah Sues Webinar Platform & Rockwills
The Edge reported that UBB Amanah Berhad had filed a suit against:
1. Learnabee International Sdn Bhd
2. Rockwills Corporation Sdn Bhd
3. Evanna Low (director of Learnabee)
4. Johari Low (director of Learnabee and largest shareholder of Rockwills)
From the article, UBB Amanah Berhad claimed that the defendants’ actions caused it to incur losses of RM 8.615 million from July 2021 to June 28, 2022, due to its customers cancelling and terminating its cash trust products. Their actions refer to a conduct of webinar series that portrayed trustee companies that offer cash trust products as operators of Ponzi Schemes, especially UBB Amanah Berhad.
Cash trust UBB Amanah sues webinar platform, Rockwills for allegedly equating it to a Ponzi Scheme
[18 October 2022] FIMM Annual Convention (FIMMAC) 2022
On Session 5: ‘Don’t be a Fool! Be Careful’ of FIMMAC 2022, a question on cash trust was posted to its panellists. Of which, En. Aznorashiq Mohamed Zin (AMZ) who is the Director of Investigation Division at SSM, had volunteered himself to answer the question. At best, AMZ’s statements were summarised as follow:
1. A complaint was made against cash trust products.
2. The similar complaint was also received by Bank Negara Malaysia (BNM) and Securities Commission (SC).
3. The basis of complaint was – ‘They offered returns that are ‘Exorbitant’.
4. The complainant and a particular MP met with his team to present this case.
5. His team discussed with Bank Negara Malaysia (BNM) and Securities Commission (SC) and carried out their own investigations.
6. Trustee companies are facilitators of trust agreements.
7. The money (investments) are being channelled into associate companies.
8. The associate companies (fund managers) are licensed by the Securities Commission (SC).
9. Majority of trustee companies have valid money trails.
10. No complaints were received on ‘people not receiving their returns’.
Aznorashiq Mohamed Zin
Certified Fraud Examiner (CFE)
Director of Investigation Division SSM
Appointed by Ministry of Finance (MOF) as Council Member of MIA
FIMMAC & IES 2022 D2S5: Don’t be a Fool! Be Careful (1 Hr 27 min 12 Sec)
Please watch from 1 Hr 27 min 12 Sec
[22 and 23 February 2023] UBB’s Response to MP Lim’s Claims
Referring to MP Lim’s statements at Dewan Sidang Rakyat, UBB Amanah Berhad replied with the following to refute the allegations and to invite him for an open dialogue.
“Abuse of Power by MP Lim Lip Eng” – MP makes false allegations yet again
Press Release: Statement from UBB Amanah on MP Lim Lip Eng’s Claims in Parliament
WG Legacy’s Viewpoints
Following the events, WG Legacy wishes to confirm that there are allegations in associating ‘Cash Trust’ with ‘Ponzi Schemes’ made to the public by MP Lim and other educators via various platforms. To which, WG Legacy disagrees and takes a stance, where the setting up of trusts with trustee companies is legitimate. Trustee companies in Malaysia are highly regulated and governed under:
1. The Trustee Act 1949
2. The Trust Companies Act 1949
3. The Companies Act (amended) 2016
The investments which trustee companies could make are strictly limited to the Trustee Act 1949 Part II Investments Section 4, Authorized Investments. I would like to attach a PDF copy of the Trustee Act as follows:
The Trustee Act 1949
It is vital to note that the Securities Commission (SC) is proactive in their undertakings as a regulator body. It is evidenced with Securities Commission (SC)’s placements of unregulated companies in their alert list in their official website. I believe if the above allegations made against all of these trustee companies are true, the respective trustee companies would have been listed under the Securities Commission (SC)’s investor’s alert list today.
So, what’s next?
Looking forward, WG Legacy shall work on the following:
1. Offer an update on the above matters, if and when it is necessary.
2. Further educate our members on the latest practices in estate planning.
3. Address issues related to a lack of confidence in trustee companies.
If you have any enquiries, please feel free to contact me below: