1 On 7 April 1999, the Commercial Affairs Department (CAD) was approached by the National Crime Squad (NCS) from the United Kingdom to assist in its investigation into a global investment fraud operation. Essentially, the fraud operation involved cold calls being made to potential investors to induce them to purchase shares in global investment companies. But when the investors attempted to withdraw from the investments, they either could not contact the promoters of the shares, or were told that they could not have their money back. Many investors in the region, including some in Singapore, have been cheated of substantial sums of money.

2 CAD is in contact with the NCS, and is assisting the NCS with this investigation. Anyone with any relevant information on the case can contact CAD at 8386862 (Ms Kuah Leng Li) or 8386840 (Chai Yong Seng).

3 The case has received media attention over the past few days, and had been reported in The Straits Times on 25, 26 and 27 May 99. In The Straits Times' report of 25 May 99, a British detective was quoted as saying that in Singapore and Hong Kong, unlike in Britain, it was "not illegal to cold call people and sell them shares over the telephone," which was why "many Singaporeans were caught out by the fraud".

4 CAD would like to clarify that cold calling to sell investment instruments is illegal in Singapore. Under the Securities Industry Act, such cold calling is deemed to be carrying on a business of dealing in securities, which would have to be appropriately licensed under the Act. In addition, it may constitute an offence under the Companies Act.

COMMERCIAL AFFAIRS DEPARTMENT

SINGAPORE

31 May 1999