Rich Filipinos lose millions in new financial scandal (PIPC)

[Monseratto]

MANILA, Philippines -- Another financial scandal has hit Filipino investors after online pyramiding schemes like Francswiss, which promised high returns, folded up when authorities exposed them.

This time, the victims appear to be the well-heeled.

As much as $250 million in investors’ funds may have been lost after the owner of a foreign exchange trading outfit disappeared, leaving the company’s bank accounts here and abroad nearly empty.

Because of this, an official of the trading firm called Performance Investments Products Corp. (PIPC) Thursday asked the National Bureau of Investigation (NBI) to help find the company’s Singaporean owner who is suspected of having salted away the funds.
In a letter to NBI Director Nestor M. Mantaring, Cristina Gonzalez-Tuason, PIPC general manager, requested the help of Interpol to locate Michael H.K. Liew, the owner of Performance Investments Products Corp. in the British Virgin Islands (Performance Investment, BVI).

“I, together with the other investors of Performance Investments (BVI) have reason to believe that Mr. Liew unlawfully took [the] money of Performance Investments (BVI) to the grave prejudice of its investors, like myself,” she said in her letter.

Tuason asked the NBI “to determine Mr. Liew’s current whereabouts for his immediate apprehension and to trace, and if possible, retrieve, the funds he unlawfully took.”

The complainant gave no indication of the amount involved, but anecdotal reports put total investors’ losses at between $140 million and $250 million.

Futures derivatives

The investment scheme involves the trading of sophisticated financial products called “futures derivatives,” which allow the investor to trade on margin, which magnifies their gains, but also amplifies losses when the market moves against them.

The scheme is similar to the operations of the defunct Manila International Futures Exchange, which was closed by the Securities and Exchange Commission (SEC) in the mid-1990s after receiving numerous complaints from investors.

Liew is also president of PIPC, the local subsidiary, which holds office at Citibank Towers in Makati City. He and Tuason are also incorporators of PIPC along with Tina Jurado and Ernest Sy.

$40,000 minimum

Sources said Liew was in the country as late as two weeks ago to meet with investors and clients.

A source said investors were required to put in a minimum of $40,000 each. Those who did not have the minimum amount were asked to come in with partners to come up with the minimum investment block.

The investor is then asked to identify a pair of currencies (i.e. dollar-euro or yen-pound, or any combination) where he or she would like to place the investments.

The company and its assigned traders then deal in these currencies and regularly update the investors of the status of their accounts.

Sometimes, investors also have the option of putting their money in metals like gold. It is not known if investments in metals were affected by Liew’s disappearance.

12-percent return

With an average of 12-percent return per annum, profits are then wired to individual investors’ accounts in ABN-Amro and other banks.

The past several weeks, however, investors failed to get their updates, prompting them to deluge PIPC with inquiries.

Early this week, investors were told that Liew had absconded with their money and that the bank accounts which held their investments had been emptied and closed.

In her complaint letter, Tuason said PIPC executed several service agreements with several offshore foreign corporations (OFCs) to provide them with financial research and information and to distribute and disseminate information about the offshore companies.

She said the third parties, which received information about the offshore companies, sometimes ended up investing in them.

“In particular, Performance Investments (BVI) invites these persons to place a certain amount of money with them for trading in the foreign exchange market, with the possibility of a profit,” Tuason said. “However, there is no guarantee of any profit as foreign exchange trading of this kind also involves risk.”

Regular investors

“Because of the reasonable returns that most of the persons were receiving from Performance Investments (BVI), most, if not all employees and/or consultants of PIPC, became (its) regular investors,” Tuason added.

“I am one of those who were enticed to invest or participate in the programs of Performance Investments (BVI),” she said.

On July 9, however, Tuason recounted that PIPC was informed by Liew to stop providing information about the OFCs. This was the last communication she received from Liew.

She and other PIPC employees and consultants, who had invested in Performance Investment, failed to receive their profits after this.

Only $2M recovered

They then tried to contact the Performance Investments (BVI) office in Singapore, which told them that the funds had been invested in three different banks, with one account in Hong Kong already closed by Liew.

So far, only $2 million in investors’ funds have been recovered.

“We had by that time already received several calls from our co-employees and friends if we ourselves had received remittances on profits due from the said company,” Tuason said.

“Based on these calls, we believe that the total amount of investments placed in Performance Investments, is by far, more sizeable than the amount [recovered],” she said.

“Based on the foregoing, I, together with other investors of Performance Investments, have reason to believe that Mr. Liew unlawfully took the money of Performance Investments to the grave prejudice of its investors, like myself,” she wrote the NBI.

Tuason said that she and other investors would file the appropriate criminal, civil and administrative cases against Liew to recover their investments.

inquirer.net