A man was sentenced to jail after he took customer’s gold bar to sell and pawn it.
Lim Hong Boon (“Lim”), the former Head of Transactions at Genneva Pte Ltd (“Geneva”), was convicted of fraudulent trading and sentenced to 60 months in jail by the State CourtsÂ
Between 2008 and 2012, Genneva, a Singapore-registered firm, sold gold bars under a repurchase plan. The corporation offered gold bars to consumers under the plan, promising profits of up to 36% per year over a contract time.
Gold Bar “Inspection”
Genneva initiated a “Gold Inspection” operation in August 2012, in which clients were obliged to give over their gold bars to Genneva while renewing their contracts.
This exercise was supposedly carried out to determine the authenticity and purity of the clients’ gold. Customers were assured that within three working days, Genneva will repay an identical amount of gold to them.
Customers were unable to renew their contracts unless they surrendered their gold bars to Genneva. When the “Gold Inspection” operation was launched, Genneva was already in financial trouble as a result of the customer returns and the necessity to purchase back the gold bars sold to clients.
Where did the gold go?
During the two-month “Gold Inspection” activity, Genneva obtained around 3,500 kg of gold. Genneva did not perform any tests to determine the quality of the gold bars they gathered. Instead, the gold bars were sold, pawned, or “returned” to customers who had previously turned in their gold as part of the “Gold Inspection” exercise.
In September 2012, when the collecting of gold bars for the “Gold Inspection” exercise slowed, Genneva ran out of gold bars to return to its clients who had previously given over their gold bars to Genneva. When Genneva halted operations on September 30, 2012, it owes its clients around 640 kilograms of gold.
Lim’s conviction follows that of Kwok Fong Loong (“Kwok”) on July 30, 2020. Kwok was Genneva’s former General Manager and was charged with one count of dishonest trade under Section 340(5) of the Companies Act. He had pled guilty and received a sentence of 56 months in jail.