By AYOOLA OLAOLUWA
A leading forex training and capital investment company operating in the country, MBA Forex and Investment Ltd, is in trouble over a failed foreign exchange investment deal it entered into with thousands of Nigerians.
A forex research firm, Dailyfix, had in a report it released in 2020 said Nigerias forex traders trade currency positions worth as much as $1.25 million daily on average.
Headquartered in Abuja, MDA was established by a self-proclaimed investment expert, Maxwell Weli Odum, as a training institute to train clients how to trade in Forex, as well as an investment vehicle where investors can earn profit every 30 days within a period of six months, while the capital is returned at the end of the year.
While it offers various investment packages to its clients and investors with various returns on investment, the minimum capital an investor can is $1,000 or the equivalent in naira.
The success story of the company and how it was making millionaires out of many Nigerians soon hit the airwaves, further gaining more fame and clients for the firm, with more than 10,000 customers currently on its list.
In less than two years after it began operations, the company which started in Port Harcourt, the Rivers State capital, had planted its branches in ten cities, including Lagos, Abuja, Port Harcourt and Owerri.
However, the bubble began to burst towards at the beginning of 2020, with rumours that the firm was defaulting in paying its investors the promised return on investments. What started as a rumour soon turned into reality, with affected investors openly coming out share their experiences in the hands of MDA.
Some of the affected investors who spoke with BH in Lagos lamented the inability of the management of MBA to adhere to the terms and conditions of the contract they signed with them.
During a visit to the firm’s office located on 2, Allen Avenue, Ikeja, Lagos on Thursday, March 18, 2021, the building was under lock while anxious investors were seen waiting endlessly for the arrival of the company’s officials to attend to them.
One of the aggrieved investors who said he had been keeping vigil in the building since the last one week, Deacon Paul Apantaku, told our correspondent that he had invested the sum of $5,000 in July 2020, hoping to get back his investment and returns by December 2020.
“I invested on the first of July 2020 and was expecting my first ROI on August 1st 2020. But up till now, I have not received a dime. I am now being owed seven months. If I add March to it, it will be eight months.
“I am in trouble now as the money does not belong to me. It belongs to my church. It was taken from the building project account after our area headquarters suspended ongoing projects in all local assemblies until the area building project is completed. My saving grace is that members of the committee and the assembly pastor are in the know”, Apantaku lamented.
Another investor, a teacher with a primary school in Lagos (names withheld), said he was no longer interested in the business and that his money should be returned in full.
“They should not worry about the return on investment promised. They should just return my money. I plan to use the money for my wedding in April, but see what I have put myself into!
“I enlisted in the program in October 2020, not knowing that the company was already going through tough times. If I had known, I would have run with my money. But I wanted to make quick money.
“What I want now is to get back my money. I no longer want their profit. They should please donate it as charity on my behalf. I am here because I heard that some people are filling for withdrawals. They should also give me forms, I want to terminate the contract with them”, the bothered public servant begged no one in particular.
BH findings revealed that MBA offices in Lekki, Owerri and Port Harcourt have been shut, with the founder, directors, workers and their families on the run after constant harassment from investors and security agents who are on their trail for alleged financial fraud.
A spirited effort made by our correspondent to get the response of the troubled firm finally paid off when he got an electronic mail from the founder after several calls and emails.
The founder/CEO, Maxwell Odum, assured investors that their capital funds would be returned, nothing that efforts are in top gear to commence payment.
Following the challenges we are currently grappling with in our business due to market volatility and other unfortunate developments, which means we are unable to meet up with the expected outcomes, we are strongly committed to ensuring that you do not at least lose your capital.
Our commitment is to pay back all capital funds. In fact, we have commenced that process by paying out our clients on the N360, 000 categories. To this end, we have slowly paid out hundreds of persons before we encountered an unforeseen circumstance, Odum explained.
Meanwhile, financial experts who spoke with BH on the development blamed the investors for threading where angels dare to thread.
“The Forex market is the worlds largest trading market, dwarfing the Stock Exchange in size with nearly $5 trillion traded daily. The market is open 24 hours a day. It is the most volatile business in the world.
With constant price fluctuations, this tumultuous market can make institutions, companies and some individuals a great deal of money. It can also bankrupt them within a twinkle of an eye. So, it is not meant for charlatans but experienced and expert dealers. Even with that, success cannot be guaranteed. An abrupt policy decision by government can sink the best operator.
“I know of whiz-kids in banks, who are celebrated today and by tomorrow they are down and out because of just one catastrophic forex dealing. The forex market is a zero-sum market.
What this means is that for one trader to make a profit, another trader will need to make a loss. The market does not itself add value to the market.
“Because a lot of the currency movements are directed by large well-financed corporate institutions and banks who are better informed about the market as a whole, the undercapitalised trader is always likely to lose.
“Institutions and large banks trade in forex on a daily basis. So, to make a significant profit in this market takes a considerable learning curve”, said an investment banker in the forex department of a first generation bank.
Also responding, a former banker and an investment analyst, Dr. Ben Akpata, said high yield investment programmes (HYIP) are frequently a form of Ponzi scheme in which a high level of return is promised for a small initial investment into what is in fact a Forex fund.
“But in reality, the initial investors are being paid back from the money generated by the current investors and a constant flow of new investors is required to keep the funds flowing, once there are no more investors in the scheme the owners usually close it down and take all the remaining money.
“It is unfortunate that Nigerians, or let me rather say people generally will never learn. When something is too good to be true, it is most probably not true. The forex business is a very delicate venture. Even governments of nations, big institutions and wealthy individuals often get the hands burnt will dealing. Not to talk of charlatans who are pretending to be experts.
“Trading forex is not a get-rich-quick scheme. Becoming proficient enough to accumulate profits is not a sprintit’s a marathon. Success requires recurrent efforts to master the strategies involved.
“So, trying to force the market to provide abnormal returns usually results in traders risking more capital than warranted by the potential profits”, Akpata said.