REGIONAL investment scheme Ufun, which straddles Singapore, Malaysia and Thailand, is facing scrutiny after four people were arrested in Bangkok over allegations of running a pyramid scam and money laundering.
Several websites linked to Ufun suggest it is a digital currency investment platform, where members are sold "Utokens" that can be used to buy merchandise online or even invest in property. Members may also earn commissions for referring new members to the platform.
Last week, Thai police arrested four people allegedly linked to Ufun. The four were believed to have smuggled some $31 million into Malaysia for money laundering in the past year, Thailand's The Nation newspaper reported. It added that as much as $70 million of funds may have been taken out of Thailand.
One of the property projects that Ufun is allegedly investing in, the Bangkok Marina Resort & Spa, has also been seized by the authorities pending investigation, Bangkok Post said last month.
Ufun executive chairman Daniel Tay is wanted by the Thai police, but the Malaysian businessman has recently released YouTube video clips to say that Ufun is not a pyramid scheme.
A pyramid scheme is a fraudulent investment structured to funnel the money put in by newly recruited investors back to earlier participants, who are thus incentivised to bring more people into the scheme.
In Singapore, Ufun has an office at CT Hub in Kallang. It was open last week when The Straits Times went there. The two people present declined to be interviewed and asked the reporter to leave the premises.
Mr Addy Tan, who was listed as a contact person on one of Ufun's Singapore websites, stressed that the organisation has nothing to hide. "It is not a scam. I myself have invested around $100,000 in seven accounts, and some of the accounts' value has grown by one-fold. I do not plan to withdraw my money, nor do I consider myself a scam victim."
He added that he initially had some doubts when he first started investing in September last year, but the worries vanished after an organised trip to Bangkok to visit a property project that Ufun is said to be investing in.
Asked whether he is concerned about the negative news over Ufun overseas, Mr Tan shrugged off the reports by Thai and Malaysian media as inaccurate. "Ufun has over 10,000 members in Singapore and I myself have 20 to 30 friends and relatives who are also investing. If the thing is a scam, people will rush for the exit. But no one has done that so far... I urge the media to not be biased in reports on Ufun. I also don't want my investments to be sabotaged."
Meanwhile, recent postings on Facebook pages bearing a connection with Ufun said the scheme is transforming its business model away from digital currency to the mining business.
Recent Facebook postings have said that all members' Utokens will be converted into pre-IPO (initial public offering) shares of a nickel mining project in Indonesia. Ufun said the IPO is valued at US$19 billion (S$25.5 billion).
When contacted by The Straits Times, a Commercial Affairs Department (CAD) spokesman said: "It is inappropriate to comment on police investigation, if any." The CAD is Singapore's white-collar crime investigation agency.
Ufun is neither licensed by, nor registered with, the Monetary Authority of Singapore (MAS), the central bank said. "We strongly encourage consumers seeking investments to deal only with entities regulated by MAS, so that they will be protected by the laws administered by MAS," it added.