KUALA LUMPUR, June 8 (Bernama) -- Justice4Investors, a group of individual and corporate investors who lost RM13.532 million investment to a licensed asset management firm, is seeking Bank Negara Malaysia (BNM) and the Finance Ministry's (MOF) intervention to initiate investigation into Bank Rakyat's involvement in the firm.

The Securities Commission licensed-firm, RBTR Asset Management Bhd, was formerly known as Rakyat BTR Capital Partners Bhd (Rakyat BTR) when the investors shored their money around mid-2007 to mid-2008.

At present, the funds have been reduced to only RM9,858 in RBTR's bank account.

Justice4Investors committee chairman and the group's spokesperson, Datuk Abdul Razak Latiff on Tuesday said the confidence to invest in the Euro Deposit Investment scheme was based on the credibility of the firm being an associate of Bank Rakyat, that the fund was capital guaranteed and that it was licensed by a regulatory body.

However, he said Bank Rakyat had disposed its 20 per cent stake in the asset management firm in the fourth quarter of 2008 without notifying all 58 account holders in the scheme.

"We now seek BNM and MOF's intervention and we want to know why Bank Rakyat pulled out of Rakyat BTR without informing the investors," he told a media briefing here.

The EDI scheme's maturity dates were from February 2009 to May 2009, with a supposed annual return of eight per cent that is payable semi-annually.

However, Abdul Razak said the funds were not channeled into two AAA-rated European banks as told to investors, namely Liechtensteinische Landesbank listed on the Swiss Exchange and Geneva-based EFG Group.

Instead, the funds were re-routed into Barclays Bank PLC in Singapore via Locke Guarantee Trust (NZ) Ltd (LGT)/Locke Capital Investments (BVI) Ltd without investors' knowledge.

He added that there was also negligence on the part of Rakyat BTR for appointing LGT as the manager of the fund, when the Securities Commission of New Zealand had issued a public warning on June 20, 2007 that LGT was engaging in conduct that is misleading the public.

"Investors were not informed of the involvement of LGT in the EDI scheme. We were presented with two European banks where our monies are supposed to be invested in.

"We want to know how the monies or our investment ended up in the hands of LGT which is wholly owned by a British Virgin Island company," he said.

As RBTR defaulted in re-paying the principal funds upon maturity, SC had appointed monitoring accountants to monitor the funds of RBTR and to prevent dissipation in April last year.

Four months ahead, the regulatory body said it was investigating RBTR, and had in October 2009 obtained a receivership order against RBTR, thus appointing Datuk Gan Ah Tee of BDO Binder as the receiver.

SC has also not renewed RBTR's license and has taken legal action against the firm and its director, Al Alim Mohd Ibrahim.

"We were informed that the investments in Barclays Bank are not likely to be recoverable and the possible recovery avenue as advised by BDO Binder is to take legal action against the responsible parties for the refund of RM13.532 million," said Abdul Razak.

Asked if they knew if the investments were still in Barclays Bank, he said they were not privy to that as the bank was answerable to LGT and that information by LGT was only for RBTR.

He said before the receiver was appointed, the investors could still speak to Al Alim, who had even sent them two letters each on March 24 and June 26, 2009 asking for their patience, and a promise that all monies due would be fully repaid upon redemption.

He added that BDO Binder has also withdrawn as receiver as there was nothing left to do and the issue was now back with the SC.

"Apart from seeking BNM and MOF's assistance, we also want to see better regulation and laws to govern funds and asset management companies licensed by SC in the future and make them liable for any misrepresentation and to be charged and jailed if found to be true, just like how it is done in the United States," said Abdul Razak.

-- BERNAMA