Chinese investors who sank about $1.2 billion into companies in Switzerland that did not have trading licenses have staged protests in Geneva to demand their money back.

The Swiss financial watchdog and legal experts say they face tremendous difficulties in securing the return of their investments.

According to Bloomberg, about 29,000 investors became involved in the alleged scam, and the suspects are still at large.

Vinzenz Mathy, spokesman for the Swiss Financial Market Supervisory Authority, said investors put their money into API Premiere Swiss Trust Ltd and Alpen Asset Management Trust Sarl, but neither company has ever had a trading license.

API is based in Zurich and Alpen in Geneva.

Mathy told China Daily that under Swiss law, only licensed banks are allowed to offer foreign exchange trading services. On May 21, the Swiss regulator ordered the liquidation of API.

The Swiss Association of Trust Companies also told China Daily the two companies have never been on the organization's list.

Bloomberg said API and associated companies promised the investors returns of as much as 10 percent a month. The report was based on interviews with six investors and documents they shared over the past three months. The money disappeared from their accounts in January.

Mathy said the Swiss watchdog issued a public warning about API and Alpen in January, adding that both companies were included in a warning list published on the regulator's website.

The Geneva public prosecutor confirmed that API and an associated company are being investigated, according to Bloomberg.

It also established that both companies offered clients access to a foreign exchange trading platform and asked them to remit funds for trading activities to a Swiss bank account held by Alpen and also to bank accounts of associated companies domiciled outside Switzerland.

As the two companies are over-indebted, they will be liquidated through bankruptcy proceedings, with the Swiss authority administering the bankruptcy assets.

"The investigation findings brought to light that API and Alpen were mainly active outside Switzerland," said Mathy, indicating the difficulties of seeking legal protection in the country.

Yang Haitao, a lawyer at the Dacheng Dentons law firm, said, "Given that capital is moving internationally, the efforts and procedures to seek legal support will be very difficult and complicated."

Contact the writer at fujing@chinadaily.com.cn

Li Xiang contributed to this story.

(China Daily 06/17/2015 page1)