UBB Amanah Berhad Ponzi Scheme Allegations Fact-checked (2024)

The company UBB Amanah Berhad is contentious. It lacks even the most basic regulatory monitoring and has been accused of deceiving Malaysians on multiple occasions. By leveraging its financial and political might to silence the victims, the firm is clamping down on their concerns rather than addressing theirs. The following is how UBB Amanah Berhand dissuades detractors and advertises its Ponzi scheme:

UBB Amanah Berhad Silences Critics Through a Baseless Lawsuit:

The Kuala Lumpur High Court fined Learnabee International Sdn Bhd and its directors, Evanna Low Fei Ting and Johari Low Abdullah, RM450,000 for contempt of court after they ignored an injunction obtained against them by UBB Amanah Bhd, a private trust company.

The contempt of court accusation arose from Learnabee’s continual broadcast of deceptive information on its Facebook page, equating cash trust to a Ponzi scheme and falsely cautioning the public about an imminent collapse of the cash trust, notwithstanding a court order imposed on April 17.

Following UBB Amanah’s appeal for committal proceedings against the three people for violating the court’s instruction, Judicial Commissioner Leong Wai Hong issued a ruling on December 4, imposing fines of RM100,000, RM200,000, and RM150,000 on Learnabee, Low, and Johari. Furthermore, Johari was told to fund fees totaling RM175,000, while Low and Learnabee were together tasked with paying RM175,000 in costs.

Representatives representing Johari, Low, and Learnabee stated that they had complied with the court’s orders, including paying penalties and removing problematic Facebook pages. However, it is unclear if Low and Johari received jail sentences because the whole court judgment was not accessible for review.

KUALA LUMPUR, March 16 — In a recent development, the High Court issued a significant ruling in the legal battle between Kepong MP Lim Lip Eng and e-commerce firm Monspace (M) Sdn Bhd, as well as its founder Datuk Seri Jessy Lai.

High Court judge Datuk Akhtar Tahir issued the decision today, forcing Lim to pay a large sum of RM2 million in damages. Lim has also been directed to pay RM250,000 in charges to Monspace and Lai.

During the Zoom proceedings, lawyer Guok Ngek Seong confirmed the court’s decision and emphasized that Lim must issue a public apology within seven days of the judgment. The ruling also orders Lim to pay RM500,000 in damages to Lai and RM1 million to Monspace.

The court also sentenced Lim to pay RM500,000 in aggravated damages to both Lai and Monspace. Guok revealed that an immediate appeal was filed following the court’s decision.

The plaintiffs, represented by lawyer Ivanpal Singh Grewal, claimed damages for Lim’s allegedly defamatory remarks in various media publications between 2017 and 2018.

Lim responded to the ruling on Facebook, expressing his intention to appeal the decision to the Court of Appeal. He stated: “In 2017, I stood up and spoke out. In 2023, I was defeated in the High Court. Undeterred. The appeal was filed. Fight we must.

The case was filed in June 2019 in response to alleged defamatory statements made by Lim during a visit to Monspace’s headquarters in Bukit Jalil on May 23, 2017. Lim, joined by Sungai Pelek assemblyman Ronnie Liu Tian Khiew and 19 Chinese nationals who claimed to have been victims of the MonSpace investment scheme, demanding a refund or explanation for their money.

Lai claimed that Lim’s words implied unlawful activity, manipulation of Chinese investors, and dishonest business practices on her side, degrading both her and the company’s reputations. 

UBB Amanah’s initial action against the trio and Rockwills Corp Sdn Bhd claimed that they falsely depicted cash trust firms, specifically UBB Amanah, as Ponzi schemes via a 15-session webinar series. The lawsuit further claimed that Learnabee engaged in illegal and fraudulent actions within the cash trust framework with the intention of defrauding clients and customers.

Alleging meddling in its business activities, UBB Amanah claimed losses totaling RM8.615 million from July 2021 to June 28, 2022. The trust company highlighted Low’s participation in a webinar series that appeared to target UBB Amanah, instilling alarm among participants about mismanagement and financial hazards.

Furthermore, UBB Amanah accused Learnabee and Low of actively urging participants to cancel their trust deeds with the company by giving them sample termination and inquiry letters during the webinars. 

UBB Amanah Berhad, a Malaysian independent private trustee, has been embroiled in controversy over charges of fraudulent actions towards investors. Despite touting three decades of business experience and claiming to be focused on attaining clients’ desired goals, questions regarding the authenticity of its operations have arisen. The company claims to manage assets worth MYR2.6 million and employs more than 18,000 experts. With its headquarters in Kuala Lumpur, Malaysia, UBB Amanah Berhad is a major player in the trust company industry.

About UBB Amanah Berhad

Location and Contact Details

UBB Amanah Berhad is headquartered at B-G-9, Galeria Hartamas No.21, Jalan 26/70a, Desa Sri Hartamas, 50480 Kuala Lumpur, Malaysia, providing a central location for its operations. Clients can call them at 3-6211-41-99 for information and services.

Board of Directors.

UBB Amanah Berhad’s leadership team includes important people such as Tan Sri Dr. Suleiman Mohamed, Chairman, Aida Othman, Managing Director, Dato’ Muleidaran M Navaratnam, Director, and Dato’ George Varughese.

These individuals guide the company’s strategic direction, striving to maintain its declared standards of excellence and integrity.

Subsidiaries & Operational Focus

UBB Amanah Berhad is part of a broader conglomerate that includes UBB Private, UBB Investment Bank Limited, and UBB Amanah (Labuan). This study, however, focuses on the parent firm, evaluating its dependability and the credibility of its claims to prospective clients.

Regulatory Compliance and Concerns

Regulatory Status:

The Companies Commission of Malaysia (SSM) oversees UBB Amanah Berhad, which is registered under the Trust Companies Act of 1949. However, the SSM’s mandate is confined to corporate oversight and lacks authority over financial regulatory problems. The absence of a Securities Commission Malaysia (SC) license raises serious concerns about UBB Amanah’s compliance with financial standards, especially given its investment return guarantees.

Allegations about Unregulated Operations

The firm’s assertion of 6-8% annual returns without clear disclosure of the mechanisms raises questions. Critics say that UBB Amanah uses legal loopholes to offer unregulated financial products, which could indicate a Ponzi scheme structure. Recent rumors indicate that the Securities Commission Malaysia is about to conduct an investigation, throwing further doubt on its authenticity.

Public and Regulatory Scrutiny

According to recent media coverage, the DAP National Public Complaints Bureau has received complaints from a number of banking and insurance associations about “cash trusts” that claim unsustainable high returns and are suspected of being Ponzi schemes. This development highlights the growing worry over UBB Amanah Berhad’s activities and their potential impact on investors.

UBB Amanah Berhad’s boasts of considerable knowledge and asset management capabilities are eclipsed by allegations of fraudulent behavior and regulatory noncompliance. As investigations continue and public criticism grows, the reliability of UBB Amanah Berhad remains in doubt, prompting potential investors to act with caution.

While the report did not name any companies, it did claim that certain firms offer annual returns of up to 36%.

In contrast, Malayan Banking Bhd (Maybank) offers fixed deposit rates of 2.1% for 12 months and 2.35% for 5 years. Notably, Maybank is Malaysia’s largest bank by market value.

Maybank paid out 58 percent share in dividends in fiscal year 2021, yielding almost 7%. This figure greatly exceeds industry norms. 

Understanding Ponzi schemes.

Introduction to Ponzi Schemes.

A Ponzi scheme is a financial hoax in which investors are promised large returns with virtually no risk. It works on the idea of using new investors’ capital to pay returns to previous investors, resulting in a cycle that lasts until it becomes unsustainable.

Mechanism of Operation

In a Ponzi scheme, once you deposit cash, the organizers use them to pay out returns to prior investors while keeping a share for themselves. This cycle continues until the scheme fails owing to an inability to attract new investors or when too many investors try to withdraw their monies at the same time.

Examples and consequences

The inevitable failure of a Ponzi scheme results in the loss of deposited monies for investors. One noteworthy example is Bernard Madoff, who was sentenced to 150 years in jail in 2009 for running a Ponzi scheme that fraudulently claimed to have US$65 billion in assets.

Case of UBB Amanah and Cash Trusts

Examination of Cash Trusts

Lim Lip Eng, Chairman of the DAP National Public Complaints Bureau and Member of Parliament has expressed questions about the legitimacy of certain “cash trusts”. He stated that these financial products are frauds that exploit legal loopholes since they are not effectively controlled by financial authorities such as Bank Negara or the Securities Commission Malaysia (SC).

UBB Amanah Berhad in the spotlight

UBB Amanah Berhad, a corporation described in the context of these cash trusts, is regulated by the Malaysian Companies Commission (SSM), rather than financial regulators. This has resulted in several concerns about its operations and the validity of its cash trust products.

Claim and Operations of UBB Amanah Berhad

UBB Amanah Berhad promotes cash trusts, which provide access to monies even after the creator’s death, with over RM2.5 billion in assets under trust and over 30 years of operation. However, these assertions call into doubt the company’s commercial methods and operational openness. 

Legal Framework for Trust Companies in Malaysia.

Trust businesses in Malaysia are governed by the Trust Businesses Act 1949, which sets the specific conditions for a firm to be registered as a trust company. This legislative framework is intended to ensure that trust businesses follow particular guidelines to safeguard stakeholders and maintain the integrity of financial transactions.

UBB Amanah Berhad, a business previously mentioned for its involvement in dubious cash trust operations, is not licensed by important financial regulators such as Bank Negara or the Securities Commission Malaysia (SC). Instead, it only has a Certificate of Registration from the Malaysian Companies Commission (SSM) as a Trust Company under Section 4 of the Trust Companies Act 1949. This certificate certifies that the company has met the initial conditions for registration as a trust company, but it does not imply complete control by financial regulatory organizations.

Requirements for Becoming a Trust Company

The Trust Companies Act of 1949 outlines a set of requirements for a public corporation to be registered as a trust company. The criteria include:

• Maintain an authorized capital of at least RM500,000.
• Appointing directors in accordance with the Company’s Articles of Association.
• Having at least RM150,000 in legitimate authorized paid-up capital.
• Depositing securities worth RM100,000 with the Accountant General, subject to the Minister of Finance’s consent.
• Demonstrating the ability to meet obligations beyond its shareholder responsibilities, excluding deposited securities.

Despite these relatively tough regulations, organizations such as UBB Amanah Berhad find them manageable, considering their size and nature of operations. According to sources inside the cash trust business, such enterprises frequently have extensive connections, hampering regulatory efforts to enforce compliance or take legal action against them. This scenario highlights the problems authorities confront in ensuring trust firms follow legal and ethical norms, emphasizing the significance of due diligence for investors and stakeholders dealing with these entities. 

Online discussion and consumer sentiment

To assess UBB Amanah Berhad’s reputation and dependability, potential investors and interested parties have turned to online forums for evaluations and conversations about the company and its cash trust products. A thread dedicated to assessing UBB Amanah Berhad reveals various perspectives and experiences with the company, reflecting a mix of skepticism and endorsement.

Scam and agent infiltration allegations

Many participants in the discussion agreed that UBB Amanah Berhad may not be a trustworthy entity, with suspicions that it is a scam. Interestingly, the conversation was occasionally interrupted by persons claiming to be UBB Amanah agents or associates who unabashedly extolled the company. This cast doubt on the validity of favorable feedback and the firm’s overall trustworthiness.

Product Inquiry and Response

A user inquired about the UBB Amanah Cash Trust, citing a referral from a friend. The product, which has an annual charge of 3.5%, is said to provide a 6-8% NETT return over three years, as well as a guaranteed minimum of RM60k. The query was primarily motivated by a desire to obtain higher investment returns than the user’s fixed deposit (FD).

The first response, from a new forum member, quickly praised UBB Amanah Berhad as an excellent decision without providing any evidence or justification. This type of reaction raised questions about its sincerity.

Skepticism from Experienced Users

In contrast, a more experienced user rated the product as high-risk and advised against using it. This viewpoint added a sense of caution to the discourse, implying that the tempting returns may not be worth the potential risks.

Regulatory Concerns and Warnings

The conversation then switched to UBB Amanah Berhad’s regulatory standing in Malaysia. While several highlighted that the company is governed by the Trust Act, there was no clear consensus on its regulatory compliance or authorization, raising further concerns about its legality.

Participants also warned that offers offering abnormally high returns with low risk are frequently “too good to be true,” illustrating how easily unscrupulous organizations may capture naive investors with appealing, but possibly deceptive, claims.

Understanding UBB Amanah Berhad’s Terms and Profit Projections

Withdrawal Penalties

When investing with UBB Amanah Berhad, it is crucial to consider their policy on early withdrawal of funds. The corporation levies a 20% penalty on investors who withdraw their assets before the agreed-upon maturity date. This heavy penalty emphasizes the need of investors remaining fully committed to the duration of their commitment in order to avoid significant financial losses.

Characteristics of Profit Projections

The discrepancy between the phrases “projections” and “guarantees” in the context of the company’s claimed profit shares is a hotly debated topic among customers analyzing UBB Amanah Berhad’s offers. UBB Amanah promotes a “Projected Profit Share” range of 6.5% to 9% for its investments. It is critical to recognize that predictions are simply estimates or forecasts based on current facts and assumptions about future performance. Unlike guarantees, which promise exact returns, forecasts are hypothetical and might alter depending on a variety of factors such as market circumstances and company performance.

Implications for Investors

The use of predictions rather than guarantees raises serious concerns regarding the reliability and trustworthiness of UBB Amanah Berhad’s assertions. While all investment carries some risk and uncertainty, the difference between a predicted return and a guaranteed return is critical. Projections, by definition, do not guarantee returns, which means that investors may earn less than expected or even lose money. This contrast emphasizes the importance for investors to approach such investments with prudence, fully aware of the dangers and speculative nature of the promised returns. 

Questionable Return Projections

A user in the conversation brought up UBB Amanah Berhad’s claim of offering a 7% return from its “current participants,” which might include returns from Malaysian Government Securities (MGS). The corporation also displays return estimates in its marketing materials, which have been criticized for being too optimistic and lacking in verifiable performance statistics. The lack of published official track records to back up these estimates implies that actual performance data may fall short of expectations, casting doubt on the trustworthiness of their stated returns.

 Transparency and Hidden Costs

Concerns have been raised about the openness of UBB Amanah Berhad, particularly the possibility of unreported fees and expenses. A user pointed out that the company’s terms and conditions permit the deduction of undefined costs from Trust Capital without specifying what these expenses are. This vagueness raises worries about the likelihood of concealed costs that might dramatically reduce capital, a strategy that may have been intended to avoid legal ramifications.

Comparisons to Regulated Entities

A comparison of UBB Amanah Berhad and regulated trustees prompted additional suspicion. One major distinction is UBB Amanah’s lack of transparency about the specifics of its underlying investments. Unlike regulated businesses, UBB Amanah does not release a prospectus or other documentation outlining its investment plans, fund manager identification, or trust compliance with Shariah principles. Furthermore, there is no mention of insurance or investor protection measures in the event that the company defaults, which is common practice among respected and regulated trustees.

Claims of Scam

The conversation was riddled with commenters characterizing UBB Amanah Berhad’s operations as a fraud, citing a mix of unrealistic return estimates, a lack of fee transparency, and the absence of crucial information that would generally be supplied by trustworthy investment organizations. These concerns underscore the importance of potential investors exercising caution and conducting extensive due diligence before committing their funds to UBB Amanah Berhad’s investment products. 

Detailed Analysis of UBB Amanah Discussions on Reddit:

To gain a better understanding of UBB Amanah Berhad’s trustworthiness, I expanded my research to include debates on Reddit, a platform recognized for its active community discussions. This forum was buzzing with discussions over the credibility of UBB Amanah Berhad’s investment opportunities, particularly the company’s assertions about its Opportunity Trust product.

A user started the conversation by sharing a promotional flyer from UBB Amanah Berhad, expressing an interest in learning more about the firm and whether it would be beneficial to invest with them. The community responded quickly, with the most upvoted remark outlining numerous major concerns:

Lack of Transparency on Underlying Assets:UBB Amanah Berhad’s inability to reveal the underlying assets that would provide the stated returns raised the first red flag. This omission calls into doubt the foundation for projecting these returns.

Use of “Projected” Instead of “Guaranteed”: UBB Amanah Berhad’s choice of words in their communication was telling; by using “projected” returns rather than “assured” or “guaranteed,” the company conveys the speculative nature of the returns, with no promise of actual profit.

Risky Underlying Assets: The group concluded that for the predicted returns to be as great as stated, the investments must be high risk. This is exacerbated by a three-year lock-in period, during which investors cannot retrieve their cash without risking severe fines.

Another participant emphasized the risk to the principle investment, pointing out that trust initiatives do not ensure the retention of invested funds. This means that investors may not only lose out on predicted returns, but also experience losses. This user urged prospective investors to thoroughly investigate how UBB Amanah Berhad produces such high returns and to discuss these methods with corporate personnel.

Further investigation on Reddit discovered another thread challenging the legitimacy of UBB Amanah Berhad. A reviewer faulted the company for not providing more additional information beyond their marketing brochure. The brochure’s failure to describe how the trust generates returns raised considerable concerns. The reviewer took a cautious approach, stating that when the workings of an investment scheme are unclear or cannot be independently verified, it is best to avoid it.

The Reddit conversations concerning UBB Amanah Berhad serve as a strong reminder of the significance of conducting due diligence when selecting investment possibilities. The community’s observations reflect widespread mistrust about the company’s lack of transparency, speculative profits, and the risks involved with its investment products. Before committing cash, potential investors should carefully review the material supplied by UBB Amanah Berhad, obtain clarification on the investing procedures involved, and evaluate the inherent risks. 

Is It Safe to Invest with UBB Amanah Berhad

Based on a thorough examination of numerous perspectives, user conversations, and the company’s own promotional materials, there are strong reasons to approach UBB Amanah Berhad with caution. The attractiveness of the company’s high returns generates instant red lights, indicating a scenario that may be too optimistic to be achieved without major risk.

 Indicators of Potential Financial Misconduct

UBB Amanah demonstrates features typically linked with financial schemes, most notably using legal ambiguities to prolong unethical actions. The promise of high returns, combined with a lack of openness regarding the procedures for obtaining these profits, resembles the strategies used by entities engaging in fraudulent financial schemes.

Historical precedents and regulatory challenges

The example of ACE Holdings Bhd stands as a cautionary tale of a financial investment firm that was finally forced to repay a significant sum to its investors following intervention by the Securities Commission Malaysia (SC). This precedent highlights the risks of investing in entities that promise extravagant rewards.

Unfortunately, UBB Amanah Berhad still operates outside of the SC’s regulatory scrutiny, giving it more leeway to continue operations without immediate consequences. This regulatory gap poses a substantial challenge to investor protection and the integrity of the financial markets.

Given these issues, potential investors should approach UBB Amanah Berhad with caution and suspicion. The alluring profits claimed by the corporation must be balanced against the potential risks and the track record of similar firms that have exploited investor faith. Caution is advised until UBB Amanah’s activities and investment strategy are subject to stronger regulatory monitoring and transparency.

Conclusion

The history of UBB Amanah Berhad is filled with legal battles and public skepticism, highlighting the crucial role of transparency, regulatory compliance, and the need for investors to stay alert. After all the legal battles have ended, it becomes clear once again that the saying “if something seems too good to be true, it probably is” holds true in the world of investments. This saga is a strong reminder for everyone involved in the financial ecosystem to be cautious, well-informed, and critical when considering investment opportunities. It emphasizes the importance of verifying the legitimacy and ethical nature of such opportunities.