Thai Boiler-room Scam Hits S'pore Investors

[george]

Thai boiler-room scam hits S'pore investors

Cold-call syndicate gets clients to pay for non-existent securities

SINGAPORE: A boiler-room operation in Thailand that previously bore the same name as Singapore-based boutique fund house Chartered Asset Management (CAM) has been found to be part of a regional investment scam whose victims included Singapore investors. But the two CAMs had nothing to do with one another.

The cold-call syndicate, which also targeted investors from Hong Kong, China and Malaysia, was in mid-2003 raided by Thailand's Securities Exchange Commission (SEC) and found to have been conducting an unlicensed securities business. Early last year, it changed its name from CAM to Bowen Reece.

A criminal complaint was last week filed against CAM/Bowen, according to Punyaporn Chavalitumrong, executive officer of SEC Thailand's enforcement department. He told a seminar here on investment scams yesterday. He said complaints had been received from investors on the cold-call firm from as early as 2001, including documents from Singapore investors.

According to Mr Chavalitumrong, CAM/Bowen bought a list of potential Singapore clients and cold called them to persuade them to purchase certain securities. They then followed up with brochures and transfer advices so that clients could send them funds for the trades.

Though details of how many Singapore investors and the amount they were cheated of were not provided, a UK-based online investors' forum contained several postings from Singapore investors who said they fell victim to CAM/Bowen's scam.

Using names of large institutions

One individual said he was approached by Thailand's CAM to buy into a company called Navcorp, following which he invested about US$18,000. Later on, he said Bowen Reece offered to convert some of these shares to another counter, called Starmax, and he paid another US$1,500 to top up the 'balance', before realising later it was a scam. Some users of the website also questioned if the Thai company was linked to Singapore's CAM.

When contacted yesterday, Colin Lee, managing director of Singapore's CAM, told BT he was alerted to the Thai operation sometime around May 2002 when some of his investors questioned if there were any relationship between the two firms. The queries abated by March 2003.

To clarify the situation further, CAM has posted a note on its website saying that only staff based in Singapore are authorised to act for the company, and has provided a list of official contacts.

Said Mr Lee of the incident: 'It was unavoidable from a legal perspective. During the onset, we had no way of knowing whether CAM Thailand was a legitimate operation or not, as it was operating in a jurisdiction outside of ours.

'We found out later that some of the boiler-room operations were utilising the names of successful large institutional fund management firms as well,' he added. Overall, the incident did not affect CAM's boutique fund business significantly, as its total assets under management and advice have swelled to around $650 million from $250 million in 2002.

Mr Lee also had some words for investors: 'Fraud and scams are common events these days and there is no way the regulators can cover all bases and schemes. If the 'scammed' investors with CAM Thailand had visited our website and read our newsletters, they would have detected a disparity in services and products offered as well as a difference in investment philosophy. Why would S'pore investors deal with Thai-based staff when CAM's origins and headquarters are in Singapore?

'The answer is that these investors are typically driven by promises of spectacular returns in double quick time - in essence, lambs for the slaughter.'

--TheBusinessTimes, Singapore