The Economic and Organised Crime Office (EOCO) has affirmed that the activities of the Chinese Company called CHY Century Heng Yue Group Limited/Sairui E-Commerce Ghana Limited is commensurate to that of a Ponzi scheme.
‘Ponzi’ scheme in simple term is a form of fraud in which the success of an unlicensed enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors, hence those at the tail end up losing all their monies.
This communique published by EOCO follows after the public interest warning was issued by the Securities and Exchange Commission (SEC) on 8th January 2021, indicating that the Chinese originated electronic commerce firm has not been duly licensed by its outfit to carry out any Capital Market activity including investing or trading for returns. And as such the general and investing public should desist from transacting business with them.
Additionally, SEC disclosed that it has referred the matter to the Economic and Organised Crime Office (EOCO) to conduct investigation and due diligence concerning the activities of the e-commerce company.
According to EOCO, since the middle of last year, it has been monitoring the activities of CHY Mall. Also, its investigations reveal that the company is operating illegally.
“CHY MALL is neither registered by the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC). It operates an E-Commerce which comes under the Payment Systems and Service Act 2019 (987) and regulated by BoG”.
The company which is registered as an online trading and marketing services also “solicits and takes deposits or placements of funds [through investment packages] from the general public promising guaranteed returns [of various percentages] over a fixed period of time which is into securities, that is regulated by SEC.
“CHY Mall, in its operations, allows customers to… purchase an investment package that ranges from GH¢770 to GH¢9240,” EOCO added.
The Ghana Investment Promotion Centre (GIPC) also, issued a press release on 13th January 2021 informing the public that the Chinese E-commerce firm breached the GIPC Act 2013 (Act 865) which mandated the GIPC to register all enterprises with foreign participation in Ghana.
However, GIPC alerted that such registration did not restrict compliance with the requirement of any other enactment. Consequently, allegations that the company engaged in various forms of capital market activities was outside its registered objects at GIPC, amounting to an offence of the law and as such, the Chinese entity is liable to all penalties associated with the breach.
The Economic and Organised Crime Office finally cautioned that CHY Century Heng Yue Group Limited/Sairui E-Commerce Ghana Limited operates a Ponzi/Pyramid scheme and as such the general public should desist from investing and patronizing CHY Mall.
“Therefore anyone who transacts business with [CHY Mall] does so at their own risk,” EOCO mentioned, adding that, in line with its mandate to prevent and detect organised crime, its establishment will continue to monitor developments with online investment with the view to ensure that citizens are protected from scammers and fraudsters.
