21 July 2024 , 09:32
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UBB Amanah Berhad is a Malaysian independent private trustee getting notorious for lying to investors by using deceptive practices.
The firm claims to have 3 decades of industry experience and claim to focus on helping their clients reach their desired results.
Furthermore, the firm claims to have MYR2.6 million assets under trust with over 18,000 consultants.
The office of UBB Amanah Berhad is located at B-G-9, Galeria Hartamas No.21, Jalan 26/70a, Desa Sri Hartamas, 50480 Kuala Lumpur, Malaysia. Similarly, their contact number is 3-6211-41-99.
Below is an overview of their Board of Directors:
- Tan Sri Dr. Suleiman Mohamed (Chairman)
- Aida Othman (Managing Director)
- Dato’ Muleidaran M Navaratnam (Director)
- Dato’ George Varughese (Director)
The company has several subsidiaries including UBB Private, UBB Investment Bank Limited and UBB Amanah (Labuan).
However, the following UBB Amanah Berhad review focuses solely on the main company. Here, you’ll find out if you can trust them with your hard-earned money or not.
UBB Amanah Berhad Bank Negara: Are They Regulated?
When you search “Is UBB Amanah regulated?” you see the answer:
UBB is a registered Trust Company under the Trust Companies Act (1949). Also, their regulator is the Companies Commission of Malaysia (SSM).
However, it’s worth noting that SSM is not a financial regulator. It only oversees companies in general.
SSM Malaysia is an agency to incorporate businesses and to make registered companies’ data available to the public. That’s it.
They don’t govern the sale or purchase of any financial investments.
The financial regulator in Malaysia is the Securities Commission Malaysia (SC) and there is no mention of SC on UBB’s website. Clearly, they don’t have a license from SC which makes them a highly suspicious firm.
Many UBB agents claim the company doesn’t need an SC license as it is a trustee. However, the firm claims to offer returns of 6-8% p.a. but fails to specify how it is able to do so.
Obviously, UBB Amanah is using legal loopholes to sell unregulated financial investments.
This indicates the firm might be a ponzi scheme.
However, recent media reports indicate that UBB might face scrutiny from the Securities Commission soon:
Is UBB Amanah Berhad Background Under DAP National Public Complaints Bureau’s Scrutiny?
According to a recent media report, The Life Insurance Association of Malaysia, the Association of Trust Companies Malaysia and Malaysian Financial Planning Council with the Financial Planning Association of Malaysia complained to the DAP National Public Complaints Bureau about certain “cash trusts”.
Their complaints were about some trusts which offer extremely high returns to their clients. They suspected that these cash trusts could be Ponzi schemes.
Although the report didn’t mention any names specifically, it said some of these companies claim to offer returns as high as 36% per annum.
On the other hand, the fixed deposit rate of Malayan Banking Bhd (Maybank) is 2.1% for 12 months and 2.35% for 5 years. Note that Maybank is the largest bank in Malaysia by market capitalization.
In FY2021, Maybank had paid out 58 sen per share in dividends which amounted to a yield of around 7%. This is an extremely high number by industry standards.
What is a Ponzi Scheme?
For those who don’t know, a ponzi scheme is an investment where someone promises a very high rate of returns at apparently zero risk.
When you deposit your funds into a ponzi scheme, they use it to pay returns to the earlier investors and keep some for themselves.
Then, the process repeats.
They keep reiterating until everything goes too out of hand and there is no money left.
When the trust company has no money remaining, you lose your deposit.
A recent example of a Ponzi scheme is Bernard Madoff. The court sentenced him to 150 years in prison for committing fraud in 2009. His firm should have had US$65 billion in assets but in reality, it had very little.
Public Complaints Bureau Chairman on Cash Trusts: Is UBB Amanah Legit?
Lim Lip Eng, DAP National Public Complaints Bureau Chairman and Member of Parliament, talked to the media about the legitimacy of certain ‘cash trusts’.
He pointed out that few financial products present in the market are going around. Certain trustee companies are offering these products and they are a big scam.
Lim highlighted that these cash trusts took RM1 billion from the market in 2020-21.
Furthermore, he pointed out that Bank Negara or the Securities Commission Malaysia (SC) are not able to regulate these trusts properly. Hence, there are a few legal loopholes which these trustees are exploiting.
Like I mentioned earlier, UBB Amanah Berhad relies on such business tactics as well.
Instead of following the regulation of financial regulators, they fall under the regulation of the Companies Commission of Malaysia (SSM). As I mentioned earlier, SSM is not a financial regulator but an overseer of companies in general.
Also, many complaints have been sent to the SC on shady cash trust companies such as UBB Amanah Berhad.
The report sharing Lim’s thoughts doesn’t mention UBB Amanah directly. But suggests UBB is under the same scope of scrutiny.
They write:
One such company’s website says they create a cash trust when you place a sum of cash in a trust. Also, the beneficiary can tap on to the cash trust for emergencies.
They claim that a unique feature of these cash trusts is they are not frozen if the creator dies. It is still accessible subject to terms and conditions.
Also, the company claims to have over RM2.5 billion in assets under trusts. It also claims to have been operating for over 30 years.
Certainly, these are all claims made by UBB Amanah Berhad.
Legal Requirements to Become a Trustee: Why You Can’t Trust Them Easily
As I have mentioned before, UBB Amanah Berhad does not have a license from Bank Negara nor the Securities Commission Malaysia (SC).
On their website, they only display an SSM Certificate of Registration as a Trust Company, under Section 4 of the Trust Companies Act 1949.
According to this act, a registrar must make enquiries as he deems necessary when he receives an application as a trust company.
Also, if the registrar is satisfied and the company meets the requirements under Section 3, he can register the same and issue it a certificate as a registered trust company.
Now, according to Section 3 of the Trust Companies Act 1949, any public company with incorporation in Malaysia can apply to the Registrar of Companies to become a trust company subject to terms and conditions.
These terms and conditions include:
- Authorized capital of the company should not be less than RM500,00.
- The company should appoint the directors according to its Articles of Association.
- Minimum RM150,000 of bona fide authorized paid up capital.
- Deposited securities with the approval of the Minister of Finance to the value of RM100,000 with the Accountant General.
- Finally, it should be able to meet its obligations, apart from the liabilities to its shareholders, without taking into account the securities it deposited with the Accountant General.
While these requirements might seem a bit heavy, they are nothing for the kind of enterprise UBB Amanah Berhad is.
A source involved in a similar cash trust operation revealed that such companies are usually well connected. Hence, it becomes increasingly difficult to take them down.
UBB Amanah Berhad Review By Consumers: What People Say
While looking into this trustee, I googled “UBB Amanah Berhad Review” and found a detailed discussion about the firm and its legitimacy.
The conclusion of the discussion was that UBB Amanah is not a reliable firm and is probably a scam. However, many of UBB’s agents probably penetrated the discussion as they started praising the firm without any reason.
One user had asked the forum members about UBB Amanah Cash Trust. One of his friends had recommended UBB Cash Trust to him.
He pointed out that the product was charging 3.5% per annum. But, it claimed to offer 6-8% per annum NETT return for a 3-year product.
Also, the product guaranteed minimum RM60k. The user wanted to know if somebody was familiar with such trusts. He was interested because his FD rate was getting lower.
The first user who responded to this question was quite a new one. He started praising UBB Amanah Berhad right away in his review, claiming its amazing.
However, another highly experienced user pointed out that it’s a high-risk product. So, he doesn’t recommend it.
Later, the UBB Amanah Berhad review discussion went into if they have authorization in Malaysia.
Some users pointed out that it falls under the Trust Act. That’s it.
Other users began highlighting that if an offer seems too good to be true, it probably is. They highlighted that it’s very easy to start a fraudulent firm nowadays and steal funds from people by making false promises.
More Comments on the Legitimacy of the Malaysian Trustee:
Later on, users began discussing the Trust Act and how UBB is using it to make itself seem more reliable.
One user pointed out that trustees have more leeway in comparison to licensed investment managers. However, they used the word “Donor” for their investors, which seems rather odd.
How can a “Donor” expect to make 7-8% profit on their “donation”?
ere are a few images of the Terms and Conditions of this Malaysian trustee:
As you can see, UBB Amanah charges a 20% penalty if you withdraw your funds before the maturing date.
They Make “Projections” Not “Guarantees”
One user pointed out a vital aspect of UBB Amanah Berhad’s offers. They pointed out that the company claims to offer “Projected Profit Share” of 6.5% to 9% on its investment.
Projections are estimations, not guarantees. Anyone can make projections and increase them as much as they want. However, they are not guaranteed returns.
Certainly, it puts a big question mark on the legitimacy of their claims.
Did You Know?
Projected Profit Share is a financial statement that depicts the profits and losses of a firm in the future period. It includes revenue, expenses and net income details.
Later, a user highlighted that the company claims to offer 7% returns from its ‘current participants’ which might include MGS. Also, the company mentions projections in its flyers, which are abstract figures.
If their official track records had been this amazing, they would have shared this info online. Or, they would have used this data to market themselves.
Clearly, their official numbers are much lower than what they “project”.
Also, there were plenty of users in the discussion calling it a scam:
One user highlighted a different section of UBB Amanah’s Terms and Conditions. They pointed out that UBB might subject your Trust Capital to costs and expenses.
However, they don’t share what expenses or costs they charge.
In other words, they can reduce your Trust Capital as much as they want. They have used ambiguous words in their agreement deliberately so they don’t face any legal trouble for charging hidden fees.
I found another user comparing UBB with a regulated trustee. He highlighted that UBB doesn’t share any proof of its underlying investment. They don’t have any prospectus sharing this information as well.
On top of that, they don’t share any information on who the fund manager is.
They don’t share if their offered trusts are shariah compliant or not. Furthermore, there is no insurance in case the company defaults.
UBB Amanah Reddit: Alarming Discussions
Apart from the discussion I shared above, I also found a detailed forum discussion on Reddit where the users were talking about the authenticity of UBB’s claims.
Here, the user shared a flyer of UBB Amanah Berhad’s Opportunity Trust. He was interested in finding out if someone was familiar with the firm and should he go ahead with it or not.
The top comment on the discussion mentioned a few red flags:
- UBB Amanah Berhad didn’t mention any underlying assets through which they will generate the returns.
- Instead of “Assured” or “Guaranteed”, they have used the word “Projected”.
- There’s a 3-year lock-in period. For projected returns to be that high, the underlying assets must be extremely risky.
Another user pointed out that Trust projects don’t guarantee your principal. In other words, you can lose a portion of your invested capital instead of gaining any positive returns.
Like the previous user, this one also recommended finding out how UBB Amanah Berhad generates such returns and discuss the same with the agent.
Apart from the UBB Amanah Reddit discussion, I found a thread discussing the authenticity of this company. Here, the reviewer shared that it’s a sketchy product as the company doesn’t share much information except its brochure.
Furthermore, the brochure doesn’t show how the trust generates its returns.
The reviewer says when he fails to verify and understand how any scheme works, he ignores it.
Should You Trust UBB Amanah Berhad?
After going through the different reviews and the company’s documentation, it is clear that UBB Amanah Berhad is not a reliable company.
Its offered returns sound too good to be true.
UBB Amanah has all the qualities of a financial scam. The company is using legal loopholes to get away with its shady activities.
Such scams are rather popular. For example, ACE Holdings Bhd is a notorious financial investment firm which had to return RM814 Million to its investors when they were caught by SC.
Sadly, UBB Amanah Berhad doesn’t fall under the jurisdiction of SC at the moment. Hence, they might be able to get away with their shady practices for quite a while.