MLM company MAXFOREX has changed its name and website to ‘Dream Worldwide’, leaving many of its 'investors' high and dry
In May, Moneylife had reported on how a multi-level marketing (MLM) company was offering 'trading' in foreign exchange through a high-risk investment module.
Maximus Trades Inc (MAXFOREX), a Mauritius-based company, has now closed down its earlier website and opened a business under a new name, 'Dream Worldwide Inc'. The 'investors' who have been duped are now planning to join hands to nail the company.
All the details that MAXFOREX carried on its earlier site (maxforexonline.biz) have been replicated on the new site (dreamworldwide.biz). However, in its new avatar, the company is claiming that it trades in real estate and diamonds - besides forex. All the information that was there on the erstwhile MAXFOREX site - founders, offices and the business model - are the same. Just the moniker has changed.
What could have forced the company to change its name and website all of a sudden? There has been an upsurge in complaints about MAXFOREX all over the Internet, as well as the reports that Moneylife has carried. Even 419scam.org, the site that tracks spam and scams on the Internet, has labelled MAXFOREX as a Ponzi scheme and provided the MLM company's bank account details. According to the website, MAXFOREX had an account (28037304495) with Barclays Bank at Mauritius under the name of Maximus Trade Incorporation.
For both maxforexonline.biz and dreamworldwide.biz, the domain registrar is Ranger Registration (Madeira) LLC. Even the status of both the sites on Who.is is the same - "clientDeleteProhibited, clientRenewProhibited, clientTransferProhibited, clientUpdateProhibited" is what the site throws up.
Another company, Royal Forex Trading Ltd, which claims to offer trading in forex and commodities, has now surfaced. Royal Forex plans to focus only on the US and India. It claims to offer 1% return per day on an 'investment' of $20 to $99 for 200 working days. The higher your 'investment', the more will be your returns (3.5% per day for a plan of $2,000 to $10,000 for 60 working days). In addition, it also offers 'rewards' (mobile phones, cars) on business worth $5,000 and above. However, it also fails to specify or clarify how it manages to offer such returns.
Gyeongju (South Korea): India is likely to press for intensive engagement to amicably resolve the currency war, mainly between the US dollar and Chinese yuan, at the two-day meeting of the Group of Twenty (G-20) finance ministers and central bank governors beginning here tomorrow, reports PTI.
Finance minister Pranab Mukherjee, who is heading the Indian delegation to the ministerial meeting, will also hold separate consultations with the finance ministers of other BRIC nations, namely Brazil, Russia and China, on wide-ranging global economic issues, sources said.
Mr Mukherjee had earlier said, "My approach is that we should try to engage the countries into negotiations and build up a consensus through which the matter (concerning currency war) could be resolved."
He had also stressed that such issues "cannot be resolved through confrontation... and we should engage in the process of building up consensus."
While the US wants China to allow the yuan to appreciate in line with market forces, the Chinese government is resisting the move, as it would hurt the country's exports.
The currency war has prompted some other countries, especially Japan, to weaken their currencies by pumping more funds into the market.
India, which has witnessed about 5.5% appreciation of the rupee against the dollar since January, has not taken a stand on the issue and wants the matter to be sorted out without confrontation in the interest of global financial stability.
Meanwhile, a US official said in Washington that when large economies with undervalued exchange rates act to keep their currencies from appreciating, it compels other countries to do the same, setting off dynamic of competitive non- appreciation.
"It's bad for the system and it's bad for all of us. It imposes an unfair burden of adjustment on other emerging markets that are running more flexible exchange rate regimes," he added.
In addition to currency war, the G-20, which is a club of developed and emerging economies, will also deliberate on issues like quota reforms in the International Monetary Fund (IMF), protectionism, the global economic situation and a framework for strong, sustainable and balanced growth.
The ministerial meeting will be followed by G-20 summit to be held on 11-12 November at Seoul, which is likely to be attended by global leaders including Indian prime minister Manmohan Singh, among others.
US president Barack Obama, who will visit India in early November, is also expected to attend the G-20 Summit, which is being held in an Asian country for the first time.
As far as the currency crisis is concerned, World Bank president Robert Zoellick, at the recently concluded Fund-Bank meeting in Washington, had cautioned that such tensions could lead to trouble if not properly managed.
"Today, we face currency tensions. Tensions can lead to trouble if not properly managed," he had opined.
"One should take this situation for granted, because my primary message is that we are still in a very fragile recovery and people have to be careful about some of the downside risks," the World Bank chief had said.
Brokerage firm Aditya Birla Money’s fancy scheme for the rich incurred heavy losses amid wrong bets. It has required intervention from the very top to set things right
In the high stakes game of wealth management, where revenue generation usually takes precedence over client welfare, all it takes is a few overzealous people to run a portfolio to the ground. Aditya Birla Money, a financial services firm, discovered this the hard way recently, when a fancy scheme tailored for individuals with deep pockets ran into heavy losses apparently due to wrong and slipshod bets. However, Moneylife learns through informed sources that Kumar Mangalam Birla personally intervened to ensure there were no losses to the investors.
The scheme, Options Maxima, involved trading in equity options where fund managers either short sold Nifty and bought options or did it the other way, a person familiar with the development told Moneylife. The scheme promised returns of around 1%-1.5% every month based on the arbitrage opportunities through this activity, which ensured what was considered a very fair 12%-15% return annually. The managers, however, made wrong calls on the movement of the index and stocks.
Narrating this incident, our source told us, "They (Aditya Birla Money) used to run something called Options Maxima involving covered calls where one short sells Nifty and buys options or the other way around, whereby there is a small arbitrage opportunity. Every month it offered 1%-1.5%, translating into annual returns of 12%-15%. It was aggressively marketed as a risk-free investment in various presentations. Suddenly in September when the market went up this manager based out of Chennai short sold Nifty and bought options, resulting in a huge loss."
The resulting losses supposedly amounting to a sizeable sum of nearly Rs100 crore caused panic in the company. Sources say that Kumar Mangalam Birla personally inspected the books of the company at its office and was there very late into the night. We have learnt that the Birla group has written cheques to make good the losses through a private group entity. But such a blunder could not go unpunished. The buck had stopped at Kanwar Vivek, managing director of Aditya Birla Money, who apparently put in his papers. Pankaj Razdan, deputy chief executive, financial services, Aditya Birla Group had roped in Mr Vivek a while ago. We have now learnt that this incident has also put Mr Razdan under considerable pressure. However, company sources deny any talks of him leaving the company.
An Aditya Birla Group spokesperson declined to reveal more details regarding this sensitive issue as the listed company is slated to come out with its quarterly performance figures early next week. However he did mention that most of the reports in the media were purely speculation, including the estimates of the loss incurred by the scheme. "As a company policy, we do not comment on speculation," said the spokesperson.
At a time when the group is intent on making significant strides in several of its new-generation businesses, Mr Birla would surely like to put this incident behind him. Financial services forms a big part of the group's plans and has contributed 37% to the FY 2009-10 consolidated revenue of Aditya Birla Nuvo, the holding company. Mr Birla is infusing more cash into businesses like financial services and telecom through Nuvo and enhancing his own stake in the process. Aditya Birla Financial Services is, in fact, intent on launching banking services provided the Reserve Bank of India (RBI) gives it a banking license.