Central Bank resumes GoldQuest probe
The Central Bank has resumed investigations into the GoldQuest multi level marketing (MLM) business amidst reports that Vijayeswaran S. Vijayaratnam, Group Managing Director of Quest International (QI) which owns GoldQuest and whose business interests in MLM activities here have been swirling in controversy, was arrested in Jakarta on May 3.
Central Bank sources told The Sunday Times FT that the inquiry into the GoldQuest’s case that was closed somewhere in the second half of last year was resumed by the regulator some months ago.
“We started investigating the GoldQuest activities and their dealers since the end of 2004 and was carrying out our duties up to last year, but with the appointment of the new Governor, Nivard Cabraal, the investigations were halted,” one source said.
Vijayeswaran, 40, considered a demi-god by employees in some countries where his operations exist, was arrested at an international event at the Jakarta Convention Centre along with three of his Filipino partners.
A separate probe into Ferntea Ltd (one-time couriers for GoldQuest products into the country) where the regulator was investigating the foreign holdings of the company and alleged exchange control fraud has also begun by the Central Bank.
He said that Anura Fernando, presently the Managing Director of Ferntea who ousted the chairman and main shareholder of the company, Jayantha Fernando when he acted in concert with Suntex International Holdings Limited, a GoldQuest company, was called to give evidence at the Central Bank regarding foreign holdings of Ferntea. He said these foreign holdings were traced to GoldQuest through its subsidiary, Suntex International Holdings Limited.
Anura Fernando, who is in London at present, confirmed the probe to The Sunday Times FT via telephone. “I was called to give evidence regarding foreign holdings pertaining to Ferntea Ltd,” he said. When asked whether he was aware of Vijayeswaran’s arrest, he said that he was not ‘aware’ of it. “I am not aware of it, but I saw it in the newspapers,” he said.
He said Vijayeswaran is not ‘directly’ involved in Ferntea. Forty-eight percent of Ferntea was acquired by Suntex in May 2005 and the balance was brought thereafter.
Fernando also said that Vijayeswaran's arrest has no bearing on Ferntea as the latter is not directly connected to the company.
When The Sunday Times FT contacted the Central Bank Governor Cabraal regarding the matter he said that the Central Bank is aware and has taken stock of the arrest. “The Central Bank has noted Vijayeswaran’s arrest,” he responded without giving details.
A top stock market regulatory official said that the arrest will have a bearing on GoldQuest dealings in Sri Lanka, but it is a moot point whether it will be investigated by the authorities.
“This arrest may warrant further investigation for the respective division in Sri Lanka, which is the Financial Investigations Unit (FIU) dealing with pyramid schemes, terrorist financing and anti-money laundering activities,” he told The Sunday Times FT.
GoldQuest over the last three years has been constantly trying to puff –up its image in Sri Lanka. More than two years ago GoldQuest hired public relations firm Rowland PR to handle its PR but the latter quit over some issues. Earlier this year, another Colombo PR firm was asked to organise an interview with Vijayeswaran with the Sri Lankan media as a GoldQuest-boosting event with the reporters being offered to fly to Malaysia to interview him! But that didn’t materialise.
Newspapers said Vijayeswaran is alleged to be involved in an MLM company with branches in South East and East Asian countries, where it produces limited edition coins and medals, jewellery and timepieces sold through network marketing.
Indonesian news agency Antara quoted the Indonesian police as saying that the four arrested were on the wanted list in the Philippines for a US$ 90 million fraud and Hong Kong for MLM scams.
The GoldQuest founder was arrested during a probe in a nine year old case. NST online, a Malaysian website said that his company in Malaysia called Gold Quest International had a run in with the law in 2000. “The company’s country manager, Tony Teoh Boon Sir was charged with operating a direct selling company without a valid license. It is learnt that the charge, filed by the Domestic Trade and Consumer Affairs Ministry was dropped several years later,” the newspaper reported.
Meanwhile QI Group Director of Finance, Richard E. Zinkiewicz has issued a statement in conjunction with the arrest saying that there had not been any hearing in any count on the entire merits of the case against any of the individuals.