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Enforcement Action against Company Conducting Illegal Deposit Taking

Release Date: 20 Sep 2017

A joint raid was conducted on MGSB Berhad led by Bank Negara Malaysia together with the National Revenue Recovery Enforcement Team of the Attorney-General’s Chamber (NRRET), Royal Malaysian Police (RMP) and Companies Commission of Malaysia (SSM) on 15 September 2017. MGSB Berhad was raided for suspected offence under the Financial Services Act 2013 (FSA) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA). The joint raid was one of the continuous inter-agencies measures to eradicate illegal financial scheme activities.

Raids were also conducted on seven premises related to MGSB Berhad located in Kajang, Bangi, Shah Alam and Kuala Lumpur (Jalan Tun Razak) and its affiliates (company secretary and legal firm). Relevant documents were seized to assist the investigation. Three company directors suspected to be the mastermind and agents for illegal deposit taking activities were arrested and remanded. The joint raiding operation also resulted in the freezing of 54 bank accounts in 11 banks and seizure of cash comprising ringgit and foreign currencies amounting to more than RM700,000 under the AMLA.

Under Section 137(1) of the FSA, it is an offence for any person to accept deposits without a licence. Investigations for money laundering will also be undertaken under the AMLA. Upon conviction, a person is liable to a fine of not less than five times the sum or value of the proceeds of an unlawful activities or instrumentalities or RM5 million, whichever is higher, and imprisonment not exceeding 15 years.

Members of the public are advised to be wary of unlicensed companies for purpose of investment and should refer to licensed financial institutions listed on Bank Negara Malaysia’s website (www.bnm.gov.my).

© Bank Negara Malaysia, 2017. All rights reserved.