Sunday, March 24, 2013

AMAC Ponzi scheme

More on the missing $18,000,000 A&B Fund invested with CEH's company, AMAC Capital.....

CHC had invested its fund in tens of millions with only one fund management company, AMAC Capital, a company founded and majority-owned by one of the CHC Board member at the time of investment, Mr Chew Eng Han.

The fund was invested through more than 40+ tranches in AMAC's Special Opportunities Funds (SOFs) ...over many years. These funds gave fixed coupon return to CHC.

There were many red flags in these investments:

1) AMAC Capital, though licensed by MAS, has had no previous track record in fund management.

2) AMAC Capital, being founded and majority-owned by a board member, was involved in a related-party-transaction (RPT), which entails stringent compliance requirements by the authorities that full disclosure must be made to the CHC congregation.

3) AMAC Capital, in giving a fixed coupon return to CHC and being given a free hand to invest the fund, was naturally encouraged to take extraordinary risks to generate high return for the SOFs, in order to generate huge profit for AMAC Capital.

4) These tranches of investment in SOFs ran the risks of a ponzi scheme where new tranches of investment were used to redeem older/matured tranches. This increases the risks of losses to be hidden till it reaches catastrophic failure.

Lo and behold, AMAC Capital could not redeem four of the tranches, amounting to $18,000,000, after CHC stopped putting in fresh investments due to the investigations.

Those involved in this questionable investment of CHC fund may feel that they are protected as the Board of Directors had approved the Investment Mandate drawn up by the Investment Committee.

Just because some people in leadership positions colluded to draw up an unfair, one-sided Investment Mandate, those who participated in this ponzi scheme that squandered $18,000,000 of a charitable organization can walk free, with their heads held high.

Do you think the authorities should investigate how the $18,000,000 went missing to prevent similar instances from recurring in future?

1 comment:

  1. Astonishing blog post beneficial for the traders under SGX Exchange, mentioning about the update regarding AMAC capital partners' investment scheme.

    ReplyDelete