TEMPO.CO, Jakarta - THE case of Millennium Penata Future symbolizes the irony of Indonesia`s investment industry. Last month, the futures brokerage company was named second best by the Indonesia Commodity and Derivatives Exchange. But in reality, it is a different story altogether.
Millennium is now accused of stealing client money by luring them via a myriad of investment products. Alas, for years, the company active in foreign exchange and commodity trading has gotten away with its illegal practices, claiming many victims in Medan, Jakarta, Bandung and Makassar.
The company also runs a similar business in Taiwan. The fraud manifested itself when around 2,500 customers could no longer access the online foreign exchange trading application provided by the company. In fact, since last year, customers could not monitor transactions, let alone withdraw funds. The total embezzled money amounted to US$165 million, or around Rp2.2 trillion. Millennium dismissed the accusations saying it had not received funds from customers since 2009.
Millennium's denial can easily be countered. Taiwanese investors have transferred money to the company's two accounts maintained with a private bank in Jakarta. These accounts are also registered with the Indonesian Derivatives Clearing House (Bursa Kliring Berjangka) and the Commodity Futures Trading Regulatory Agency (Bappebti). Customers previously received monthly payments from these accounts, besides fund withdrawals that they made. When funds were transferred to a HSBC account in Hong Kong, the address of the account owner was the same as Millennium's office address in Jakarta.
Millennium should stop pretending to have no knowledge about what has unfolded in Taiwan, as there are documents indicating the appointment of Chen Hsuan Ming as the company's representative in Taiwan, and with the knowledge of company chief, Ajis Isnawan. The appointment was also endorsed by, among others, the Indonesian justice and human rights ministry, as well as the Taipei trade and economic representative office in Jakarta.
Therefore, its statement that Chen is not Millennium's employee comes across as an attempt to evade responsibility. After all, since his 'disappearance', Chen has reportedly been sighted at one of Millennium's subsidiary offices in Jakarta.
To prevent being lured by scams, consumers should exercise caution and common sense when choosing investment options. The key: don't be fooled by brokers' flashy flowery talks promising fantastic returns. The iron law of investment is that the higher the returns, the higher the risks go up.
Sticking to this principle, consumers may prevent themselves from falling prey to dubious schemes, including the one that has shocked many people: First Travel. After all, First Travel's modus operandi, similar to the Ponzi scheme, is not new. It recruits customers using cheap umrah minor pilgrimage packages as bait, and then use new investors’ money to pay old investors. Consumers should draw lessons these cases.
Bappebti and the Financial Services Authorities (OJK) should not sit idly by. As more and increasingly complex investment products are being offered, the two institutions should be more vigilant and coordinate more closely. As we see from the above cases, these strategic institutions appear weak and ineffective. Preventive measures should not be limited to education via banners or TV ads only. They need to do more.
Read the full story in this week’s edition of Tempo English Magazine
