Bank Negara Malaysia (BNM) has found the liabilities of gold investment firm Genneva Malaysia Sdn Bhd (Genneva Malaysia) exceeded its assets, said Deputy Finance Minister Awang Adek Hussin.

He said the situation clearly shows Genneva Malaysia was unable to pay returns to its investors.

Awang Adek, likening Genneva Malaysia's operations to most illegal get-rich-quick schemes, said BNM's initial investigations showed the company actually sold gold bars to attract investors, but later changed to just taking deposits.

"There was already an element of deposit taking in Genneva, and the company's assets were so small compared to the amount invested by the people, so there was a very big gap between assets and liabilities.

"So how could it (Genneva) pay when its liabilities ran into billions of ringgit while its assets were just in the millions (of ringgit)," he said when concluding the Finance Ministry committee-level debate on the 2013 Supply Bill at the Dewan Rakyat here today.

Early this month, BNM together with the Royal Malaysia Police, Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia carried out joint raids on several of Genneva Malaysia's premises as well as the residences of its directors after several investors who had become victims, lodged police reports.

Awang Adek said it is not possible for Bank Negara, which is considering what appropriate action to take on Genneva Malaysia, to pay back the company's customers the value of their investments.

"At first, some got a return of two per cent a month, but this was wrong.We cannot say the investors were blameless, they invested and there were risks.

"The company was really to be blamed. Where is there a scheme that can give such good returns, if it's too good to be true, then it's not true," he said.

IWK to be restructured

Meanwhile, on the Indah Water Konsortium Sdn Bhd (IWK) issue, Awang Adek said the Energy, Green Technology and Water Ministry has assured that IWK would be restructured as soon as possible to overcome its dependence on government subsidies.

"IWK really has a structural problem. The problem is the charge for consumers is RM2 to RM8, not enough to cover the real operational cost of RM23 per unit.

IWK wants to charge RM23, the government does not approve because the people will make noises, they say it's costly," he said.

- Bernama