KUALA LUMPUR, Nov 24 — Kepong MP Lim Lip Eng said several investors in Malaysia are taking legal action claiming they had been misled for years by a fraudulent "Gold Painting Art” scam allegedly run by the founder of a local gallery, who promised high returns and a buyback guarantee for the artworks but failed to deliver, causing losses exceeding RM38 million.

He said over 13 police reports have been made by the investors over the past two weeks, with some filing civil suits against the gallery owner for supposedly failing to appear in court.

"The police reports have been lodged against (the gallery owner), as well as the civil suits as she failed to show up to the court to address the complaints.

"The total amount involved is estimated to be RM38 million, although the actual figure could be higher,” he told reporters in a press conference here.

He also said that the gallery owner is accused of not paying her employees and owes money to various suppliers, investors, and even artists involved in the gallery.

Investors owed millions

One investor calling himself Robert Ong claimed he was initially drawn to the investment opportunity in 2018 after being introduced to the art scene by the gallery owner and agents due to the buyback guarantee that he was allegedly promised.

However, he claimed as the years passed, the buyback guarantee never materialised and he had no choice but to take legal action by filing police reports and civil suits to protect his legal rights.

"(The gallery owner) claimed to promote art in Malaysia and offered a platform to help us resell the artwork at a later date. They assured us that the artwork’s value would increase significantly over time. When I joined the investment around mid-2018, I was optimistic about this promise.

"However, things came to a halt, and the promised buyback never happened. Despite repeated attempts, there was no progress or fulfilment of their promises,” he said.

The purchaser investor said that he has been trying to resolve this issue for six years and making all reasonable attempts to contact the gallery owner and seeking an amicable solution, but she has allegedly avoided all communication.

Kevin Lee, who is an agent to Korean artist Kim Ill-tae said he also faced similar issues where supposedly the gallery owner had marketed the investment as a secure and profitable option, promising returns of up to 30 per cent within six months.

However, Lee claimed that even after several years, many investors had yet to receive any compensation.

"She promised different levels of returns based on the time of investment. For example, those who invested in 2018 were offered lower rates, while later investors in 2019 and 2020 were promised escalating returns.

"She marketed this as a short-term investment, claiming that returns could be seen in as little as three to six months. However, these promises turned out to be baseless. Each time I sought updates, I was met with vague reassurances,” he said.

Broken promises

The Korean national, active since 2014, alleged that the gallery owner had claimed she would promote and sell the artworks in Malaysia through exhibitions and events held in Kuala Lumpur and other countries.

To build trust and maintain credibility, the agent said he made payments over the years, but the gallery owner allegedly began delaying payments to the agent, offering numerous excuses, including issues with the artist and her dealings with investors.

Lee also claimed the gallery owner owes him US$6.5 million (RM30.5 million) for over 220 pieces of art, though it is unclear how many she has sold.

He explained that after the termination of the contract with the gallery owner on December 14, 2022, she was prohibited from using the artist’s name and portraits, but it was recently discovered that she allegedly has continued selling the artwork through other networks in an attempt to find new investors.