SINGAPORE - Three people have been arrested for their involvement in a multimillion-dollar gold investment scam.

In a statement on Friday (Jan 25), the Singapore Police Force (SPF) said that the Commercial Affairs Department investigated gold investment company The Gold Label (TGL), which sold gold bars under a buyback scheme.

Under the buyback scheme, the company sold physical gold bars to investors at a mark-up of more than 20 per cent above prevailing gold prices.

These investors were promised returns as high as 24 per cent per annum, and were given an option to sell the gold bars back to TGL at the same purchase price after a specified period.

Investigations found that TGL had attracted more than 2,000 investors and recorded a turnover of close to $150 million.

The company was wound up by its creditors after it failed to honour its payment and buyback obligations, SPF said.

Two TGL directors, James Iseli Rudolf Maitland and Wong Kwan Sing, were charged with fraudulent trading under the Companies Act on Oct 28 last year.

The remaining director was arrested in Malaysia on Friday with the assistance of the Royal Malaysia Police and will be charged with fraudulent trading under the Companies Act.

The trio is alleged to have sold TGL's buyback schemes when the company did not operate any substantive profit-generating business and had no sustainable means of honouring its payment and buyback obligations, SPF said.

If convicted, the trio face a jail term of up to seven years, a fine of up to $15,000, or both.