Corporate Case

CAD probing The Gold Guarantee

The Commercial Affairs Department (CAD) is investigating The Gold Guarantee.

Explaining the nature of its probe against the gold trading firm, the CAD said it is “focused on the business practices of the company” and whether criminal offences have been committed.

“If there is criminal wrongdoing, the CAD will do its best to ensure that monies that have been illegally obtained are recovered and properly dealt with according to the law,” said the white-collar crime busters recently in an advisory posted on its website.

This development comes after two dozen unhappy clients of The Gold Guarantee visited the CAD on Jan 25 to lodge complaints.

They had invested tens of thousands of dollars in savings into the 18-month-old firm and were concerned after its founder and chief executive, Mr Lee Song Teck, became uncontactable that week.

Red flags were raised after Mr Lee did not show up for a meeting with clients on Jan 21. He has been largely uncontactable since and did not answer his phone when The Sunday Times called him last week.

Clients could elect for the company to keep possession of the gold and get a higher payout. They buy into the scheme through commission-earning agents, many of whom are themselves investors. Payouts can be as high as 2 per cent a month – or 24 per cent a year.

This incident comes after another gold trading company, Genneva, left more than 10,000 investors stranded last year. Genneva is being investigated by the CAD for financial improprieties. Last October, Mr Lee offered Genneva customers a rescue plan through The Gold Guarantee and Asia Pacific Bullion. Some investors are known to have taken up his offer.