In the wake of Myanmar’s most widespread and financially devastating ‘Ponzi scheme,’ millions of dollars have been lost, thousands of people defrauded, and a myriad of ministries left pointing fingers.
In December 2016, Saxon Capital Limited (SCL) began selling shares to residents of Pyay, Bago, Mawlamyine, and other townships promising an 80 percent return on their investment.
Though they registered as a public company in Yangon with the Directorate of Investment and Company Administration (DICA) in January, by mid-March their offices were vacant and senior management had disappeared without a trace.
On March 24, the Bago Ministry of Finance informed the Union Ministry of Planning and Finance that something was amiss and a federal investigation was promptly required.
The Ministry however, took two months to alert the Ministry of Home Affairs, the Central Bank of Myanmar, and the Securities and Exchange Commission of Myanmar (SECM), which only cumulated in the latter issuing a June 27 warning through state newspapers in Yangon, Mandalay, Ayeyarwady and Tanintharyi.
According to a report by Frontier Myanmar, rather than a coordinated investigation by the Ministry of Planning and Finance’s Financial Regulatory Department, “investigations by separate ministries and agencies have been conducted with little or no coordination, resulting in overlap and unnecessary delays.”
In an effort to educate the public on investing and harms of doing so through social media, on August 14 DICA released a list of 55 verified companies legally registered to sell shares and deemed safe for investment.
This list includes Yangon Stock Exchange listed companies, state-owned companies, and public private partnerships.
Ponzi schemes are not new to Myanmar. According the Myanmar Times, in 2015 an outlet called Global Growth Company Limited ran an illegal futures brokering business promised investment in the futures market but after collecting funds, disappeared without repaying investors.
Before the creation of the YSX, approximately 200 registered companies sold shares and did so directly to investors, which experts say promoted a climate of deregulation and informality that facilitated illegal scams and fraud.
Source: Myanmar Business Today
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