The Return Of Vijay Eswaran
By Abdul H. Azeez
Long Before Sakvithi or Golden Key, there was Gold Quest. The Ponzi scheme grabbed millions from Sri Lankans but its leaders, unlike Sakvithi Ranasinghe or Lalith Kotelawala, managed to escape scot free. The Gold Quest scam was run on an international scale, and the man at the top of it all had to dodge bullets to stay out of prison. And he is now back in Sri Lanka, his past sins forgotten. What price will he extract from the people of this country now?
Mention the name Gold Quest and you would likely still get curious looks and inquisitive questions directed at you. This is because the damage and controversy the scheme caused has left such a lasting impression on Sri Lankans that mention of the very name spurns chatter even among people who never had contact with the promoters of the classic pyramid scam.
Aimed at making those at the top richer, the pyramid scheme operated in such a way that if you, say, were a potential investor, you would be initially asked to invest a certain sum of money in return for huge benefits. Gold Quest gets its name from the elaborately designed gold tokens its investors got. Investors paid a fixed dollar sum for membership of the scheme and in exchange received these gold tokens, watches, and trinkets. Typically the gold they received was worth substantially less than their initial payment, however they were assured that it was a sound investment and were constantly told that by joining the scheme they had become independent businessmen.
Each member was asked to persuade at least two new members to join Gold Quest, and each of these new members was in turn required to recruit another two participants. For every four members that entered the pyramid under them, investors received a substantial commission. To get their promised returns, each investor would have to lure in three more investors and their money. And once you’re in, the only way to get out is to get more people in. Basically to pile up their bodies in the financial hole you voluntarily climbed into, in order to get out.
As each new member continued to add yet more recruits to the scheme, those at the top of the pyramid received substantial commissions, but the ultimate profit was reserved for Gold Quest which made millions on the sale of overvalued gold baubles that had little or no real value.
But initially this pyramid scheme attracted a lot of easy money seekers, of which Sri Lanka seems to have an endless supply. The credibility that was associated with it only increased the hordes of people wanting to invest with it. The owners of Gold Quest had their fingers deep in the ‘right places’ and when it ultimately collapsed and its decrepit schema began to be revealed, Gold Quest was saved by the people it had ‘invested’ in. One of them was a key ‘friend’ of the big shots of Gold Quest, right in the top position of the Central Bank: Ajith Nivard Cabraal. As soon as he took over as Governor, Gold Quest’s case was de-prioritized. The chief executors of the pyramid scam were allowed to go free and the whole thing was shoved under a rug.
Here in Sri Lanka, Gold Quest achieved notoriety in the mid part of the last decade. It was a classic pyramid scheme that exploited get rich quick dreams of people from all walks of life to construct a ‘business model’ that simply sucked money from the bottom of the pyramid and siphoned it to the top, leaving the bottom completely financially dry. But it also laid claim to international fame by ruthlessly exploiting hundreds of thousands of people from some of Asia’s poorest economies. The dubious actions of its founder Vijay Eswaran have resulted in the operation being banned in several countries. Interpol apprehended Eswaran in May 2007 for alleged fraud and he was remanded in Indonesia whilst trials raged in Jakarta and Manila. He was subsequently released without being charged.
Eswaran is known to be a shrewd businessman with an eye for money-making methods. Rumored to be a taxi driver at the inception of his career, Gold Quest and other business have catapulted him to the ranks of the global elite. Savvy and highly egotistic, former associates say that he demands a level of respect usually signified by extreme and reverential love. Apparently, it is a requirement that his employees literally worship at his feet when he enters a room, and this includes the Caucasians in his service.
After giving it a few years to blow over, Eswaran is attempting somewhat of a comeback into the Sri Lankan business community. He has obtained the controlling stake in insurance giant Asia Capital. Eswaran’s previous ventures into legitimate businesses in Sri Lanka have always ended up coloured in controversy and legal troubles. He was allegedly involved in illegal foreign exchange transactions and money laundering activities. His investment in Asia Capital was investigated by the Securities and Exchange Commission looking for possible fraudulent foreign exchange activity.
Sri Lankans have short term memories and the acceptance of a man so controversial, so notorious, back into the business environment of this country displays it. It is true that Eswaran was never proven guilty, but then again he was never proven innocent either. The cases filed against him have all been mysteriously halted. The many investors defrauded by Gold Quest are yet to find respite.
It is unfortunate to see that there is so much silence and dumb acceptance of a man back into the business elite of the country when he should be immediately clapped in irons and tried for the injustice meted out to the investors of Gold Quest. But unsurprisingly perhaps a lot of people are simply seeing the money and not the hand that extends it. Several leading newspapers who have been highly critical of the man in the past are now hailing him as the best thing that happened to Sri Lanka since the discovery of rice.
A daily financial newspaper for instance ran an article on October 18 that was basically a showcase of the man’s interests. The incidents of the Gold Quest scandal were brushed off as a trivial matter in barely a couple of lines. Ajith Cabraal, his old friend, recently quipped ‘as long as the money comes from proper channels, we cannot question a transaction’ but how about questioning the man behind the transaction, especially when there are so many burning questions to be asked from him?