Filipinos in UAE Warned Against Online Gold Store
DUBAI: Authorities in the UAE and the Philippines have cautioned Filipino residents in Dubai against investing in gold in an online store that claims to have a base in the emirate, according to a media report.
Hundreds of residents have been inviting other residents to invest in Emgoldex, or ‘Emirates Gold Exchange’, allegedly an online store for gold, for months now. Here, clients can buy and sell gold bars weighing one to 100 grams, reported Gulf News.
Through its Goldex programme, clients pay Dh3,000 to reportedly get 15 grams of 24k gold bullion that can be “delivered” in the UAE or stored in Germany, the report said.
To receive a “credit bonus” of Dh15,000, a client needs to refer two more clients and fill a table with 14 clients under him, it added.
It resembles a multi-level marketing or pyramid schemes, only the terms are different and the investor can “exit” once he reaches the top and start a new table again, the report pointed out.
But the way to earn monetary rewards is just the same — by inviting other investors or clients. There is no clarity about where this so-called credit bonus of Dh15,000 awarded to clients is coming from, said the Dubai-based news portal.
A YouTube video explaining the scheme and shared by some “Emgoldex clients and team leaders” on social media claims that Emgoldex’s parent company, the Germany-based Gold and Silver Physical Metals KG, registered an online store in Dubai with the Dubai Multi Commodities Centre (DMCC) in 2010, it said.
The video showed a trade licence, certificate of incorporation, and certificate of registration of Emgoldex.
When contacted, a DMCC spokesperson denied that the companies [Emgoldex and Gold and Silver Physical Metals KG] are registered with the government regulator of commodities trading, reported Gulf News.
“Emgoldex is not a DMCC-licensed company. DMCC has taken steps to prevent further misuse of our name,” the spokesperson reportedly said.
The video also reportedly claimed it is the online portal of a big Dubai-based gold manufacturing company duly licensed by the DMCC. Gulf News called the company and an official requested that its name not be mentioned in this article as “we are not having any ties with Emgoldex. It’s all a lie”.
The Dubai Gold and Commodities Exchange (DGCX) also reportedly denied any link. “Emgoldex or its German parent company. Gold & Silver Physical Metals KG, are not registered broker members or partners of the Dubai Gold and Commodities Exchange (DGCX),” Gaurang Desai, Interim CEO of DGCX, was quoted as saying by Gulf News.
“DGCX is regulated by the Securities and Commodities Authority (SCA) in the UAE. All the broker members of DGCX are licensed by SCA and are required to maintain strict compliance with SCA-approved DGCX by-laws.”
SCA’s list of registered gold traders or brokers does not include either of the companies as well.
Mohammad Rashid Ali Lootah, Executive Director of Commercial Compliance and Consumer Protection (CCCP) sector in the Department of Economic Development (DED), Dubai, reportedly said neither of the companies is registered with DED.
He said no online store, especially those that sell or trade gold, can operate in Dubai without a licence. The penalty for doing so varies but starts from Dh5,000.
Gulf News found that the purported office of Emgoldex in Jumeirah Lakes Towers belongs to a consulting company. The receptionist of the company said Emgoldex used to rent that space but they “left for Russia some time ago”, said the Dubai-based newspaper.
Gulf News repeatedly tried to contact a team leader in Dubai who claimed to be from Emgoldex. He reportedly said he would meet all the team leaders of Emgoldex here and is just “waiting for approval from the main office in Germany on whether we would comment or not”.
A spokesperson from Emgoldex in Seychelles was quoted as telling Gulf News via email that these ‘Emgoldex clients and team leaders’ are fraudulent operators who are using their name without authorisation.
“As a business, Emgoldex has suffered extensively at the hands of persons passing themselves off as Emgoldex — using our name, and brand without consent and in a manner that is harmful to ourselves and others,” the email reportedly read.