OJK, based on information received from the people, recorded many investment offers not within its supervisory authority. Most of the offers are made through internet websites or media online.
Jakarta (ANTARA News) - Fake investment companies still are operating openly in the country attracting thousands of investors by promising attractive profit.

Poor financial literacy is partly attributable to the expansion of the illegal business causing losses of trillions of rupiahs mainly to middle to low income members of the community.

Promises of big profit makes people easily cheated and lose caution in facing risk despite reports of big losses from venturing in the illegal business.

The Financial Service Authority (OJK) said in the first quarter of 2016 , there were 400 unlicensed companies offering investment products in the country.

Over the past several years thousands of individuals and institutions have invested more than Rp40 trillion, now feared lost in illegal investment companies.

Among such cases were in agribusiness involving Qurnia Subur Alam (QSAR) with 6,800 clients facing potential losses of around Rp467 billion; Add Farm with 8,500 clients facing potential losses of Rp544 billion, and Koperasi Langit Biru with 115.000 clients facing potential loss of Rp6 trillion.

There were also commodity and foreign exchange investment involving Sarana Perdana Indoglobal (SPI) with 3,401 clients facing potential loss of Rp1.5 trillion- Rp3 trillion, Wahana Global Bersama having 11,500 clients with potential loss of Rp3.5 trillion - Rp7 trillion, and Gama Smart having 10,000 clients with potential loss of Rp12 trillion.

Investments in gold were offered by Raihan Jewellery valued at Rp13.2 trillion , Virgin Gold Mining Corporation (VGMC) attracting 40,000 client raising Rp500 billion and Pohon Emas attracting 24,000 clients , who are feared to suffer potential loss of Rp574.10 billion.

The House of Representatives have asked OJK to warn the people against venturing in illegal business and to take firm measure against the illegal operation.

The legislative body also asked OJK to be more selective in granting license to investment companies to better protect the people.

The track records of prospective investment companies should be verified before they are granted the license.

Financial literacy

The OJK is the authority in improving the public literacy in finance to prevent the people from falling victims to rife illegal business.

OJK has improved its controlling system to prevent expansion of deceitful or fake investment companies.

Currently OJK has a task force called Waspada Investasi to warn the people from venturing in illegal investment operation. OJK formed the Task Force in cooperation with police and the prosecution office.

Chairman of the Board of Commissioners of OJK Muliaman D Hadad said in a bid to cope with the problem over the operation of fake investment companies, OJK would meet again with the police chief and the attorney general to coordinate actions . The three agencies want to take a more effective action .

The government needs to seriously address the problem with the expansion of the illegal business over the past several years causing losses of trillions of rupiahs to the people.

Muliaman said OJK , police and the attorney general office have to collaborate to slap a tighter control over the operation of investment companies in addition to educating the people to be more aware of the risk of venturing in illegal business.

The task force operates not only in Jakarta but also in the regions under OJK, police , prosecution office or other agencies.

Media online

OJK, based on information received from the people, recorded many investment offers not within its supervisory authority. Most of the offers are made through internet websites or media online.

Many of the investment offers come from companies licensed not by relevant agencies but other agencies like the Ministry of Cooperatives and Small and Medium Enterprises, the Trade Ministry, the Law and Human Right Ministry and the Commodity Futures Trading Regulatory Agency (Bappebti) of the Trade Ministry.

Some of the investment offer may break no law, but there are suspicious characteristics of the operation that need close observation, the OJK said.

Among the characteristics that gave rise to suspicion is the promise of big beyond normal level of profit and that the offers are not made more transparently via TV or radio. In addition, the address of the companies is not given clearly, and they refuse physical interaction.

The funds invested by the people are to be reinvested in projects abroad misusing the names of prominent figures , officials, religious leaders and leading artists with promise of big profit and bonus in goods, luxury cars and free pleasure trip abroad.

The clients are given the impression that the investment is without risk and the investment companies are associated to big or multi national companies.

OJK said based on experience, such business has always ended with big losses to the investing public.

The people, therefore, need to be aware of the risk they are facing and not easily cheated and carried away by promises of big profit, an OJK official said.

The Commodity Future Trading Regulatory Agency (Bappebti) of the Trade Ministry said the people should invest their money in legal broker companies.

The people should not invest their money before they know that the investment companies are properly registered at Bappebti.(*)

Reporter: Ahmad Buchori
Editor: Heru Purwanto
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