Investors ‘lost’ $250 million in PIPC scam — Senate probe
An estimated $130 million to as much as $250 million worth of savings by private individuals were “lost” in the so-called Performance Investment Products Corp. (PIPC) scam, the company that a number of prominent personalities poured their investments into, the minimum amount of which was pegged at P2 million each.
Initial findings during a hearing yesterday by Senate investigators yielded this information alongside the assessment that the firm allegedly designed a scheme to dupe hundreds of persons from the very start.
Sen. Manuel “Mar” Roxas II, chairman of the committee on trade and commerce, noted the apparent failure of governance by concerned agencies that led to the commission of one of the controversial investment schemse that could also be considered another form of so-called pyramiding plot.
“Any recovery of the money invested into this, I think is nearly impossible. I don’t think there’s anyone who can realistically expect recovery (of their money),” the senator told reporters after the hearing, adding Singaporean Michael Liew who owned PIPC could no longer be found since his reported disappearance last July after the controversy first broke out.
Roxas, however, said they would continue with the inquiry despite a seeming gloomy ending for the “victims” of PIPC as his panel is also considering taking up a similar case, that of the infamous FrancSwiss company that alleged to have engaged in pyramiding scheme.
“The hearings are not yet over, but we already saw there was a grand design to dupe people in our country. Corporations keep changing their names and they used many schemes to lure investors,” he added.
The senator stressed they expect that criminal cases will be filed with the appropriate agencies “but in the meantime, we will look for ways to prevent this from happening again by coming up with stricter laws.”
“There are indications of possible remedial legislation because the laws in the books right now do not reflect the kinds of transactions that are being promoted by these entities,” Roxas said, adding the Securities and Exchange Commission (SEC) is expected to adopt in the future a more proactive stance on matters concerning this kind of transactions.
The committee, in its first public hearing, learned that the PIPC, registered as a research company and alleged local subsidiary of PIPC-British Virgin Islands, was not allowed to engage in foreign exchange services or to deal with securities such as investment contracts.
Yet, it actively sought prospective clients of investment products worth at least $40,000 each, with a promised high return of 12 to 15 percent annually, the senator said.
In their devised scheme, Senate investigators were told that their transactions involved trading of so-called future derivatives either through dollar, euro, yen or pound currencies or precious metals such as gold.
Roxas said they were also told that not only one company is involved in this issue but many others, including those operating in other countries such as Japan, India and China, all commonly being owned by Liew.
He added the laws on investment products must be strengthened to prevent the proliferation of similar “Ponzi” scams.
Regulators, such as the SEC, must also take a more proactive stance for the public.
“We also look upon the SEC to adopt a more proactive stance. SEC simply says, ‘well, unless there’s a complaint, we can’t do anything about it.’ Of course, during the good times, the interests were high, no one is complaining. But when the time comes someone files a complaint, it’s too late, the alleged perpetrators are no longer to be found,” he added.
Angie M. Rosales