Legitimate Business or Scam?

This is the question that many of us are still pondering on – was it a scam right from the beginning? Or did Bestino really have honest intentions but were unfortunate in the quality of their advisers? Or perhaps they started with honest intentions but got greedy along the way?

If it was a scam from the beginning, then they have no intentions of paying us back. We have to recognize this and if we want our money back, we have no recourse but to take legal action. It is pointless to keep knocking on their doors. However, if they had honest intentions, we can give them the benefit of the doubt that they are trying to raise the money to pay us back.

A satisfactory answer to this question is very important to allow us to move forward. Hence, let us recapitulate the facts.

YM Chong comes from the family that owns Batu Pahat Goldsmith. This company is very well established, much respected and has created a niche for itself within the Indian community. The confidence to invest in Bestino was in a large part due to the Batu Pahat Goldsmith name. The question is: would YM Chong risk soiling the reputation that his father had worked so hard to build? I personally find it hard to believe that he would do so. Or perhaps he thought he could keep the two separate and no one would associate Batu Pahat Goldsmith with Bestino?

Bestino Berhad runs legitimate businesses. Of that there can be no doubt. Apart from the goldsmith shops, they run the PNG refinery which was awarded to them by the PNG government. They also have 3 factories producing natural oils. Would Bestino put all of these in jeopardy just for a miserable RM400 million scam? But then again, these businesses are continuing to run and do not seem to be in jeopardy.

In 2008, Bestino announced that it would be issuing an IPO in Singapore. This was later pulled back. Was this just an elaborate hoax to gain the confidence of the people? Again, I personally find this hard to believe.

Then, there is the other side of the equation.

Bestino collected the last of their gold bars from investors on 30th April 2009. Less than 2 months after this, they were raided and their bank account frozen. Can this be chalked up to coincidence? Maybe. But the fact remains that their gold bars are safe and our money is gone. They offered a gold bar investment scheme for 3 years with no problems with the authorities. But when the gold bars had all been taken back, the authorities raid.

In the document filed with SC, Bestino has clearance to issue RM400 million in preferential shares. But Bestino collected in excess of RM400 million and they continued collecting up till they were raided (mid June). Is this the action of an honest company? If what they were doing was legal or what they thought was legal, shouldn’t they have stopped collecting when they reached RM400 million?

I was told that one of their directors used to work in SC in a senior position. If this is indeed true, then wouldn’t this person know the internal workings of SC and know that the actions Bestino was taking were illegal? Wouldn’t he be able to advice Bestino correctly? Or could it be that Bestino knew what it was doing was illegal but decided to take the risk anyway? A risk which they took with our money and without our permission.

Bestino claimed that they were misled by their company secretary into believing that what they were doing was legal. This was a huge mistake by the company secretary. What happened to the company secretary? Fired? Legal action taken? If none of the above, that was very forgiving of Bestino. Anybody knows what happened to the company secretary?

For me personally, there are two actions of Bestino that I take issue with.

Firstly, the misinformation being given out by Bestino. Everytime, I call the company, I get a different story. The stories sometimes contradict each other. If Bestino was honest and sincere, they would make the effort to keep their investors updated. By updated, I do not mean sending out letters that do not say anything.

Secondly, their seeming lack of interest in paying us back. Although they say that "it is our business responsibility to pay back all the 6764 customers amounting to more than RM400 million (Bestino letter dated 14 Nov)", the only action they have taken is to try and sell their goldmine. No other efforts seem to be made to pay us back. No contingency measures that we know of.

So scam or legitimate business? What are your thoughts? Please do share if you have further information and facts that can shed more light and help us reach a conclusion.

List of Public Bodies

I have extracted the list posted by Anonymous May 18, 2010 3:52 PM below in order to make it more easily available. Thanks to Anonymous (May 18, 2010 3:52 PM) for the list.

Investor Affairs and Complaints Department
Securities Commission Malaysia
3, Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
General Line: 603-6204 8000
Tel: 603-6204 8999/8777
Fax: 603-6204 8991
E-mail: aduan@seccom.com.my

http://www.rmp.gov.my http://www.consumerfraudreporting.org/reporting.php

http://www.cassa.org.my/home.htm

http://www.en.cap.org.my/

http://www.fomca.org.my/

Chow Kon Yeow
http://chow.blogsome.com/

Lim Kit Siang
http://blog.limkitsiang.com/

Fong Po Kuan - Chamber Of Thoughts
http://pokuan.blogsome.com/

Shahrir Samad
http://www.shahrir-umno.blogspot.com/

Tan Seng Giaw
http://tansenggiaw.blogspot.com/

Teresa Kok
http://teresakok.blogsome.com/

The Star Citizen's Blog
http://blog.thestar.com.my/

Consumers Association Of Penang - CAP
http://www.cap.org.my/
10 Jalan Masjid Negeri, 11600 Penang
Tel: 04 829 9511, Fax: 04 829 8109

ERA Consumer Malaysia - Education & Research Association For Consumers Malaysia
http://www.eraconsumer.org/
4 Jalan SS 1/22A, 47300 Petaling Jaya
Tel: 03 7876 4648, Fax: 03 7873 0636

National Consumer Complaints Centre NCCC - Pudat

Khidmat Aduan Pengguna Nasional
http://www.nccc.org.my/

Petaling Jaya Community Centre - PJCC
http://komuniti.virtualave.net/pjcc/

DAP - Democratic Action Party - Parti Tindakan Demokratik
http://dapmalaysia.org/
24 Jalan 20/9, 46300 Petaling Jaya, Selangor
Tel: 03 7957 8022, Fax: 03 7957 5718

Keadilan - Parti Keadilan Rakyat
http://www.keadilanrakyat.org/
75A Jalan Lawan Pedang 13/27, Tadisma Business Park, 40000 Shah Alam, Selangor
Tel: 03 5513 3416, Tel: 03 5512 9646

Lee Hwa Beng Service Center - State Assemblyman for Subang Jaya
http://hwabeng.org.my/

MCA - Malaysian Chinese Association
http://www.mca.org.my/
Tingkat 8, Wisma MCA, 163, Jalan Ampang, 50450 Kuala Lumpur
Tel: 03 2161 8044

MCA Public Service And Complaint Department
Tingkat 8, Wisma MCA, 163, Jalan Ampang, 50450 Kuala Lumpur
Tel: 03 21618044, 03 2163 2305

MIC - Malaysian Indian Congress
http://www.mic.org.my/
6th Floor, Menara Manickavasagam, 1 Jalan Rahmat, 50350 Kuala Lumpur
Tel: 03 4042 4377, Fax: 03 4042 7236

Complaints.com.my
http://www.complaints.com.my/

Consumer.com.my/
http://www.consumer.com.my/

Attorney General's Chambers of Malaysia - AG - Jabatan Peguam Negara Malaysia
http://www.agc.gov.my/
Level 1-8 Block C3, Parcel C, Federal Government Administrative Center, 62512 Putrajaya Tel: 03 8885 5000, Fax: 03 8888 9362

Legal Aid Bureau - Biro Bantuan Guaman
http://www.bheuu.gov.my/

Jabatan Perdana Menteri
Aras 1, Blok B7, Parcel B, Pusat Pentadbiran, Kerajaan Persekutuan, 62502 Putrajaya
Tel:03 8888 1117, Fax: 03 8888 3791

Berita Harian - Bahasa Malaysia newspaper
http://www.bharian.com.my/
Balai Berita, 31 Jalan Riong, 59100 Kuala Lumpur
Tel: 03 2282 2323 Fax: 03 2283 2425, 03 22824340,
E-mail: bh@bharian.com.my

Business Times
http://www.btimes.com.my/
Balai Berita 31, Jalan Riong, 59100 Kuala Lumpur
Tel: 03 2282 2628, Fax: 03 2282 7600, 03-22825424,
E-mail: bt@nstp.com.my

China Press - Chinese newspaper
http://www.chinapress.com.my/
80, Jalan Riong, Off Jalan Bangsar, 59100 Kuala Lumpur
Tel: 03 2282 8208

An Open Letter to Bestino

Dear Bestino Management,

Information from Bestino has not been forthcoming and a lot of conspiracy theories are floating around. I ask that you call for an investor meeting in which you explain what has been going on and what are your efforts to repay the investors. A two way dialog is much needed to dispel the rumors and regain your credibility.

Rumour has it that the sale of your goldmine has fallen through. For myself, I have the following questions:

1) In your letter dated 3rd Feb, you said that '...we have decided on an alternate plan to reactivate the mines in PNG and hope to extract reasonable quantities of gold daily, sell and start paying the investors in stages....'.. Can I ask what is the status of this contingency plan.

2) My agent told me that Bestino has a lot of assets in gold bars and should anything happen to Bestino, it will sell the gold bars to pay the investors. Can I know what plan has been put in place to sell these gold bars and when will the money from the sale be given to us.

3) You have been paying us 3% interest monthly. As this has stopped from June last year, you have accumulated 33% in unpaid interest. This can be used to pay our capital. We will be happy to accept this 33% first while you raise the rest of the money.

4) According to my agent, one drop of your essential oil is worth USD17. You now have 3 factories and as such must be making a lot of profit from the essential oil. You have an obligation to pay us back. I believe some of this profit should be channeled to paying us back.