OJK Names, Bans Six Illegal Investment Companies
Jakarta. The Financial Services Authority, or OJK, has outlawed six companies claiming to offer high-yield investments, or which provided unregistered financing to unsuspecting customers, following an investigation by a special task force established to clamp down on investment fraud.
The companies are Compact Sejahtera Group, also known as Compact500, Bintang Abadi Sejahtera Cooperatives, or ILC; Inti Benua Indonesia; Inlife Indonesia; Segitiga Bermuda Cooperation, or Profitwin77; Cipta Multi Bisnis Group; and Mi One Global Indonesia.
Compact500 shut down its entire operation on Nov. 10, 2016, and officially changed its name to Bintang Abadi Sejahtera Cooperatives.
"The six companies have been under the OJK's [...] surveillance of their information on social media and in the printed and online media," Tongam L. Tobing, policy and investigations support director at the OJK, said in a statement.
Tongam said the companies are deemed illegal because the OJK discovered that they were operating outside the scope of their company licenses. The companies were set up under common trade licenses, which do not allow them to collect money from the public to be invested elsewhere or loaned out to others. Only banks, fund managers and brokerages are permitted to engage in such business.
A 2007 Trade Ministry regulation also bars companies from promising unreasonable profits.
Illegal investment companies typically ask for certain amounts in investment up front and promise investors guaranteed yields to the likes of 2 percent per day, or 30 percent per month.
While such returns are not unheard of to those trading in the stock market, the chance of finding the right stock is small and fluctuations in the prices counterbalance any excessive gains.
In comparison, the interest rates on rupiah-denominated time deposits start from around 6 percent annually at local banks.
Moreover, many of these shady companies often provide sketchy details on how they generate the promised returns on investments. Inlife went as far as claiming on its website that it has a legitimate investment license from the OJK, which the financial authority denies.
Others, such as Inti Benua Indonesia, help customers to obtain financing to buy cars or motorcycles under unconventional loan schemes that enable clients to receive a percentage of the vehicles' value in cash at the end of the loan period. Meanwhile, Mi One Global Indonesia presented itself as a multi-level marketing network selling phone credit.
Tongam encouraged members of the public to peruse the OJK's official list to make sure that investment companies are legitimate before making any investment decisions.
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