PETALING JAYA: The Chinese New Year season is received by businessmen with both anticipation  and trepidation — due to a hidden threat.

While the lunar new year brings bumper sales, another lucrative seasonal business also crops up during this time — extortionists target almost all levels of business as the festival approaches.

With collections estimated to be anything from RM2 million to RM5 million annually, it is said to be one of the easiest of pickings for the underworld.

In an attempt to grasp the “economics” of this nefarious industry, The Edge Financial Daily spoke to a number of persons familiar with the underworld, the police and members of the business community.

The information they shared reveals that extortion runs deep and has a long history, both in the country and worldwide.

The modus operandi for collecting payment is simple.

First, gang members would visit Chinese businesses and give them a New Year greeting card or an empty ang pow packet.

Business owners usually know that there is something sinister behind this apparently friendly gesture.

They are expected to place a certain amount of money in the greeting card or ang pow and pass it back to the gang members when they come around again.     

In the Klang Valley, the sources say, extortion is pervasive in Petaling Jaya, Kajang and Klang, where there are a high number of Chinese businesses.

However, it is not limited to these places as collections take place in all areas nationwide where secret society gangs have established a presence.

According to police sources, some of the more active gangs involved are Gang 21, Gang 24, Gang 36, Gang 08 and Gang 04.

Businessmen are expected to pay according to the size and profitability of their outfits.

For instance, in an area controlled by Gang 24, they are supposed to pay a minimum of RM240, and up to RM24,000 for big establishments.

Likewise, in a Gang 36 area, the contribution would be between RM360 and RM36,000.

The sources say that businesses at every level are targeted — every store, restaurant or pub, large and small, is visited.

They say the money is important for the gangs as it is distributed as New Year bonuses to their members.

“Everyone wants to celebrate the New Year. We do it our way,” quipped an underworld source.

Businessmen usually comply with these demands out of fear as those who refuse are threatened with repercussions.

The triads usually use a soft approach at first to coerce those who show resistance.

For restaurants, gang members are sent to occupy the shops. One person will sit at each table and will not allow others to sit there, thus depriving customers of places and eventually forcing them to leave.

This will go on until the owners can no longer bear the losses, and they will then decide to pay up as the loss of business may be more than the protection money demanded.

For other businesses such as retail outlets, gang members would sometimes stand outside the shop and intimidate customers, discouraging them from going inside.

Just as with the restaurants, loss of business would force the owners to pay up.

The gangs also target the factories of small and medium-sized industries, and this is where they make bigger collections.

Incidents such as wrecking a shop and arson rarely take place these days as gangs are careful not to go overboard and have the authorities turn on them.

However it still happens occasionally.

According to several businessmen, most do not want to report extortion as they do not want any trouble.

“It’s only a small sum and they only come once a year. So it’s better just to pay up and avoid trouble,” said a businessman in Klang.

“We do not want to report to the police as we are afraid the gangsters will find out who reported them. It may turn nasty then. I do not want to live in fear and always looking out behind me,” he said.

Another businessman said although they realise that paying up perpetuates the problem, they have no choice.

“What are we to do? If the one extorting from us is arrested by the police, 10 more will be there to take his place. Am I to run a business or be a crime fighter?” he asked.

IGP: Businessmen afraid to lodge reports

Inspector-General of Police Tan Sri Khalid Abu Bakar said police are ever ready to work with the Chinese community to tackle this problem.

“But the problem is not many people are reporting it to us! What can we do if there is no report?”

He said he understood that people were afraid of being exposed but he gave an assurance that there are many ways to keep their identities confidential.

“We hope to work with the Chinese business associations on this problem. Together we can find a way,” said Khalid.

His statement is given credence by the fact that the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) declined to give its feedback when approached for this report.

Khalid said the problem of extortion is not as widespread as before but acknowledged that it exists nationwide.

He said the police’s attempts to rein in the secret society gangs would not be successful without the support of the public.

“If everyone reports them, we will take action against them with our huge resources. No matter how many of them there are, we can catch them,” he said.

Khalid said today’s technology allows many possible ways to nab a criminal.

“Trust us to keep your identity confidential. Please report to us and we will help you solve the problem,” he reassured the business community.

This article first appeared in The Edge Financial Daily, on February 18, 2015.