MLM man linked to abandoned Indonesian club project
1,000 people lost $2m in the project that was called off just before it openedStraits Times, The (Singapore)
November 7, 2007
Author: Lorna Tan, Finance Correspondent
MR JAMES Phang, the man behind controversial multi-level marketing (MLM) firm Sunshine Empire, is linked to a failed investment scheme that resulted in 1,000 Singaporeans losing about $2 million in total.
About six years ago, these investors had paid up to $3,800 each to become members of an Indonesian country club, PT Magic Kingdom Island Resort Paradise.
Mr Phang's firm NOP (Number One Product) was the marketing agent for the club, which was never built.
The resort was to have been developed on a 200-ha piece of land in Rempang, which is linked to Batam by bridge, and promised a hotel, chalets, a golf course and even a 1,000-sq-m shopping mall.
Some investors had paid the club membership fees via monthly instalments of $300.
The resort was set to open in July 2003, but the project was called off in May 2003.
It is believed that the investors never received any refund on their investments.
Mr Phang is adviser to Sunshine and founder of Empire Group Alliance, of which Sunshine is an associate.
Recently, Sunshine made headlines after it was placed on an investor alert list by authorities, both here and in Malaysia, as a result of concerns over its business practices.
In response to queries from The Straits Times, Mr Phang confirmed that NOP was marketing memberships of Magic Kingdom around 2001. He said NOP is now inactive.
Mr Phang said he knows many investors believe he is the 'dishonest businessman' behind the project. But he begged to differ.
'I'm a victim of the failed project too. I was the one who reported to the police when the project was abandoned...I collected over $1 million from investors but I lost more than $6 million. I was in debt because of this project but I've paid up almost all of the debt.'
He said the debt included paying off NOP's tax and banks' credit facilities.
Mr Phang said that his younger brother was the chief executive of the project, but declined to elaborate.
He said he never hid the information that he owns NOP. 'I'm not in the wrong and I'm not scared. I stand upright.'
In a letter in 2004 to the 1,000 investors, PT Magic Kingdom blamed the Sept 11, 2001 terror attacks on the United States, the Bali bombings in 2002, the Iraq war and Sars for the project's failure.
Only $16,931 was left in its coffers, it stated.
When contacted, the Consumers Association of Singapore (Case) said it had received seven complaints on the failed project. In January 2004, Case met NOP representatives, who said they could not refund investors as it had suffered big losses in the project.
Investors were advised by Case to file their claims in Indonesia, where Magic Kingdom was incorporated. Some investors also filed complaints with the Commercial Affairs Department (CAD). The police were unable to respond to queries on its probe into PT Magic Kingdom by press time.
On Oct 24, The Straits Times cited sources as saying that Sunshine was being investigated by the CAD.
Sunshine has attracted the attention of the authorities as its activities appear to be like a pure investment scheme - but it is not licensed for such operations.
Incidentally, Mr Phang has recently claimed that Empire Group Alliance's property arm is involved in building a marine theme park, called The Magic Kingdom, in Malaysia.[email protected]
--------------------------------------------------'I LOST MONEY TOO'
'I'm not in the wrong and I'm not scared. I stand upright.' MR JAMES PHANG, whose firm NOP (Number One Product) marketed a failed investment scheme that led to 1,000 Singaporeans losing about $2 million in total. He said he lost over $6 million himself because of the project and never hid the information that he owns NOP.