Suspicious Investment Deal

My best friend invited me to a Koperasi Investment Briefing on 26^th November 2011 at Menara PGRM in Cheras which left me skeptical. I do not doubt her sincerity in wanting to share what she thinks is good business deal with me. However I think she may have been infected with the MLM fever and did not apply critical thinking to the whole deal.

Joint Investment between Fiber@Home and Koperasi Pengusaha Perdagangan Kuala Lumpur Berhad (KPPB) on 22^nd September 2011 witnessed by YB Dato’ Joseph Salang Gandum, Deputy Minister, The Ministry of Information, Communication and Cultural of Malaysia.

Source: http://fiberhomevalley.blogspot.com/2011/11/peluang-menjana-pendapatan-bersama-kppb.html (Note: this URL is not listed on their own website: http://www.fiberhome.my/ or their Facebook page. I got the link from: http://busuk.org/ping/view/41280)

This scheme is “Secured by Government”

(I take it to mean if the venture fail, the taxpayers will have to foot the bill to reimburse those who have invested in the Koperasi)

However KPPB is only officially registered on 26^th September 2011. Can a yet-to-be-registered Koperasi sign any investment agreement with other companies? Is the agreement enforceable?

The name of the Koperasi itself roughly translated into Cooperative of Kuala Lumpur Business Entrepreneurs Limited. Depending on how the word Entrepreneur is interpreted, everyone can join as even someone who is unemployed with some money is a potential Entrepreneur in the making. I’m no legal eagle, however with Kuala Lumpur in its name, shouldn’t its area of operation limited to Kuala Lumpur? However members are soliciting investments from all over Malaysia. (I have tried reading Akta 502, Akta Koperasi 1993 but couldn’t understand it).

Having been registered 2 months this Koperasi have yet to come up with its own website or Facebook page. However at the briefing slides are shown that the Chairman is one Y.A.M. Dato’ Baginda Tan Mas Dato’ Muhammad bin Haji Abdullah who is also Deputy Chairman of some UMNO branch.

This Koperasi or Cooperative is soliciting investment using MLM concept of member get member. The only difference is the bucks ($$$) stops at the level below the investor. Perhaps it can be called Dual Layer Marketing (DLM).

Or maybe not

At the briefing also it is mention that KPPB besides investing in Fiber@Home, also have investment in Taxi and Car Rental companies. However no details are given as to which Taxi and Car Rental Company. Their future investment plans for the next 10 years include investing in or opening 222 hotels and resorts. That’s almost 22 hotels/resorts per year. Is that even feasible? Does Malaysia have so many tourist arrivals both local and foreign to fill all those room-nights? What about staffing the hotels/resorts? Will they bring in more foreigners and registered them to be voters overnight?

I done some calculation and the Master of Ceremony (MC) also let slip that Return of Investment (ROI) is 78% over a 4-year period. Compare this with Fixed Deposit in bank which is 3.60% per year or total of 14.4%, this is way too high to the extent of being suspicious. 

With the general election coming, my best guess is UMNO come up with this scheme (scam?) to top-up their war-chest to fund their election campaign. After election, everything will slow down if not disappear until next election.