Sunday, February 8, 2009

Sunshine empire

I was first exposed to this company shortly after I ORD. It was introduced to me by one of my army friends. It started with my friend roughly explaining to me how the company works. It is basically just putting in cash into the company, and getting your returns monthly. The returns that are promised per year is like 50%? I can't remember the exact details, but it is REALLY good. ( Essentially, only the money part was explained. How the money generated is not.)

Following the brief introduction, I went with my friend to Toa Payoh hub. It is where the head office is located. The place is well decorated, however it looks a little too simple for be an 'investment' place, when comparing to banks and such. His mentor, a person who is just a few years older than us met me. Same as MLM companies, my friend gave me a rough introduction of this mentor by telling me his academic qualification, of being presently in the 1st class honors region(still schooling). However, I wasn't impressed by his qualifications, because I don't think he's well versed in economic knowledge.

The first thing when i saw him, was him holding a VERY thick stack of $50. He told me that he is going to buy in another gold package ( $10,000) . I had a feeling that he took the stack of notes to 'show' me. After that, he went through a simple power point presentation with me on the company. It essentially explains more into detail on how the company functions, and the benefits of buying into the plan.

The company is actually an marketing arm of the whole group, called the empire alliance. It is raising funds for the investment work that they are doing in Taiwan, a mobile broadband investment. The money raised from the public will be pumped into doing the infrastructure. And when it completes and the revenue comes in, there will be another bonus payment given out to the 'shareholders'. They also talk about other perks that 'members can enjoy.
Here is a quick summary
  • More than 50% returns in a year
  • VERY big bonus payout after the wireless network is completed in taiwan
  • 'EBay' like system where people can buy and sell their goods
  • Free call times. This is because their wireless network company does deal in phone networks too
  • Others that I can't remember.

Just by looking at all this, I think most people will be really tempted to buy into the system. I do not deny that I was really really interested in buying into the plan.

HOWEVER, there were quite a few tell tail signs that the company is not as legitimate as it sounds. Here is why, ( all this findings that I did was before the company had an publicity in the news.)

  1. I did a ACRA search online on the company. Basically you can pay $5 to find out that the paid up capital of the company, the owners and where they stay. I found out that the owners are really young and they only had a paid up capital of less than $500,000. If i am not wrong, it is around $200,000. This is really little for an 'investment' company. Also, the directors are a little too young, and they stay in HDB flats. The give away was the fact that the company used to be a company selling health care products. And more prying into the previous company, I found out that it was an MLM company.
  2. The people at the company were selling to me the idea that you can get returns on the money you put in. But did not explain how the company is going about doing it. I.e they could not explain in detail the wireless network that is happening in Taiwan. Basically almost everything that the sales people know is form their own PowerPoint slides. When I request for a financial sheet, they cannot produce it too.
  3. The freebies of their 'Ebay' system was flawed. When i request for them to show me the website and how to use it, they could not. Even the upline who was there for quite some time could not show it to me. They did not know how to log in and search for products. Moreover, when I went home to try out the website, I found the website quite unprofessional, and the stuffs were above market price. Worst still, the company intends to develop this aspect of their products, and are thinking of fighting the real Ebay, head on.
  4. There were too many young people selling products in the company. And too many teenagers/ old people buying products. What sort of investment company will target this kind of people?
  5. There was once, even an upline, together with my friend came to my hall in NTU. The upline showed me his really expensive phone and was holding his BMW keys. He was around my age and has quit school to do this full time. I am quite wary when people flaunt their wealth. Most of the time, they are not really rich. Really rich people that I have met do not flaunt their wealth. Or rather they do not see the need to make an effort to falut their wealth. However after 2 hrs of trying to convince me, he left. I was already determine not to take the risk.
  6. Their promise of around 50% return per year for long period does not seem logical at all. I have been looking for companies financial sheets for a few years already. It is known that a legitimate company with a 20% growth for a consistent few years is already very very hard to come by. So how is it possible to sustain 50% growth a year for a LONG period of time. I tried explaining that to this particular upline who came to my hall, but he did not seem to understand me. I already seems to me that he might have been blinded by the greed.
Nonetheless, the good deal that was portrayed was really effective in wavering the logical side of me. However I was lucky to not succumb to it. It helps that my parents who are financially savvy do not believe it too.

So now, finally after 2 years, the police has uncovered the scam. However I pity all the people who's money has been swindled away. And the students who have quit school to purse this ambition.

To end, off I now believe that most things that are too good to be true will most likely scams. However, not everything are scams. Like in the case of sunshine empire, if they could show me their financial sheet, and explain to me their business plan convincingly, even if it was a start up company, they will be a highly likely chance that I will invest in them.


Anonymous said...

Yeah.. I have rich friend oso wear 3 for 10 dollar giordano t-shirt and carry kaimara bag.. damn zai la!

ntuchartist said...

hey really sound like someone I know...haha

Mozart said...

I agree with some of the points. MLM companies today have tried to flaunt their wealth to the people. Trying to attract people to join them. To me, the most important things in doing MLM is the learning process rather than the final outcome. Cars and Condos are not important to me. If I'm earning a lot, I'll want to stay in a HDB and rent out a condo to make more income. I think it is more important to save rather than to have the financial freedom. You will never have financial freedom without savings.


Sound like a summer resort.