Rental power plant looting money going offshore. See how Summit and Mercantile both owned by Awami party man are in think of off shoring looted money from Bangladesh.
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Local businessmen’s link to offshore cos revealed
David Bergman
Directors of some of Bangladesh’s biggest business conglomerates, including
the Summit, the Square, and the United group of companies, own or have owned offshore companies in the secretive tax haven of the British Virgin Islands, New Age can reveal.
Information about their offshore company ownership is contained amongst the 2.5 million electronic files which were leaked to the International Consortium of Investigative Journalists and which have been shared with New Age.The files contain information from the databases of two offshore company service firms including Singapore-based Portcullis TrustNet which was the firm that these businessmen paid to set up their British Virgin Island companies.
From the ICIJ files, New Age has identified over 20 Bangladeshi business people who have owned an offshore company, though there may be many more who have registered using a non-Bangladesh address or who have set up offshore companies using different service agencies.
The information from the files – much of which is now public through a database on the ICIJ website – is only accurate as of the beginning of 2010 since when some or all of these companies may have been closed down.
The disclosures follow New Age revelations on Friday that a leading Awami League politician and members of his family owned a network of offshore companies in the British Virgin Islands.
Kazi Zafarullah denied both his involvement and that of his wife, Nilufer Zafar MP.
Business people around the world often use the secrecy afforded by offshore companies to conceal assets or place them beyond the reach of their country’s tax authorities – though they can also use them for entirely lawful purposes.An additional issue for Bangladesh residents, those living in the country for at least six months in any particular year, is the need to comply with the foreign exchange laws which impose tight restrictions on the outflow of money.Many businessman argue that in today’s internationalised world, the country’s strict foreign exchange regulations make it difficult for them to conduct normal and necessary business transactions within the law.
From the information in the ICIJ leaked files
Summit Industrial and Mercantile Corporation Pvt appears to be the Bangladesh company whose directors have had the most involvement in purchasing offshore companies, with its chairman and five directors owning or having owned six offshore companies between them.
All five are members of the same family — Aziz Khan, the company’s chairman, his wife Anjuman Aziz Khan, their daughter Ayesha Aziz Khan, the chairman’s brother, Jafer Ummeed Khan, and Aziz Khan’s nephew, Md Faisal Karim Khan. Other than Jafer Ummeed Khan and Md Faisal Karim Khan, they registered their British Virgin Island companies through a Singaporean address.
Aziz Khan told New Age, ‘I am a permanent resident of Singapore. I have lived there for many years, and in exile in 2007 and 2008. During my stays I have conducted businesses. All my businesses are legitimate and within the law. The information in reference is inaccurate and misrepresents.’
Offshore companies in the British Virgin Islands provide confidentiality for the owners as the names of the company directors and shareholders are not made publicly available.
The Summit family directors though went to greater lengths than practically all the other Bangladesh businessmen to conceal their links to the offshore companies - by appointing ‘nominees’, rather than themselves, as both directors and shareholders of these companies.
In the leaked ICIJ files, the companies Anticorp Ltd and Execorp Ltd were named as the ‘directors’ of Beckingsdale Ltd, Grattanville Ltd and Borneo Powers Ltd, which are three of the offshore companies that the Summit family members set up in 2005. The company Sharecorp was also named as the ‘shareholder’ of all three of the companies.
The Portcullis documents, leaked to the ICIJ, however, show that Jafer Ummeed Khan, at least until 2010, owned these companies although he shared ownership of Grattanville Ltd with Md Faisal Karim Khan and that of Borneo Power Ltd with his niece Ayesha Aziz Khan.
Similar kinds of nominee arrangements existed for two of the other companies which were held by the family members: Transnational Electricity Company Ltd, set up in December 2003 which was owned by Aziz Khan, and Fuji Power and Petroleum Ltd set up in 1998.Each nominee director and shareholder cost $500 and $200 a year.
The only exception to the use of nominee shareholders concerns Euro Hub Investments Ltd, which was set up in January 2002, where the shareholders were directly named as Aziz Khan and his wife Anjuman Aziz Khan. However a nominee director was used for this company.
It remains unclear what were the purposes of the Summit directors’ six offshore companies although a note written by the Portcullis administrators in relation to three of the companies — Borneo Powers, Grattanville and Beckingsdale — suggest that the owners intended that they would only be ‘used as a holding company and will be dormant.’
It is, however, known that Transnational Electricity Company had been used by Summit as part of a consortium which in 2004, together with Summit Power, participated in the second tender bid for the construction and operation of a 450MW power station in Sirajganj.
Documents leaked to the ICIJ show that an e-mail written by one of the directors in May 2005 instructed Portcullis TrustNet, which was presumably acting on behalf of the nominee director, to sign a power of attorney that would authorise Aziz Khan ‘to act’ in the Transnational Electrical Company’s place ‘in all matters’ relating to the Sirajganj project.
Aziz Khan was, however, the real owner of the company: an internal TrustNet e-mail sent in response to the request noted that ‘the attorney appointed [i.e Aziz Khan] is the beneficial owner on records.’
TrustNet was also instructed to arrange the signing of a letter addressed to Bangladesh’s power ministry, stating that the Transnational Electricity Company ‘is prepared to provide the equity as stated in Exhibit III, Table 1 as a minimum amount pursuant to the terms of the RFP.’
The commitment to ‘provide the equity’ as stated in the letter suggests that funds were available in the offshore company.
In addition to the Summit company directors, there are many other Bangladesh businessmen who own or owned offshore companies in the British Virgin Islands.
• Hasan Mahmood Raja, Khandaker Moinul Ahsan (Shamim), Ahmed Ismail Hossain and Akhter Mahmud of the United Group of Companies, in January 2002, became directors of the offshore company Multi-Trade Marketing Ltd which was liquidated sometime before 2010. Attempts to get a comment from Khandaker Moinul Ahsan (the only one of the four currently in Bangladesh were not successful.
• The late Samson H Chowdhury, the founder of the Square Group of Companies, and Dr AMM Khan, a former president of the Bangladesh Association of Pharmaceutical Industries, in June 2003, became directors of the offshore company Fair Trading House Ltd, which sometime before 2010 was liquidated. Six months earlier, Samson and his wife Anita also became directors of Evening Stars Ltd. All three of Chowdhury’s sons were out of the country and attempts to contact them were not successful.
• Azmat Moyeen, the managing director of Momin Tea, and Dilip Kumar Modi, a jute businessman, along with some others, in March 2005, became directors/shareholders of the offshore company Wrightstar PTE Ltd which before 2010 was liquidated. Dilip Kumar denied any involvement in the company. Azmat said, ‘I have no idea what you are talking about. I do business in tea. I have nothing in the British Virgin Islands.’
• Dr Syed Serajul Huq, the chairman of Sea Pearl Lines, in October 2005, along with some other people, became a director/shareholder of the offshore company Sovereign Capital PTE Ltd, which was de-registered before 2010. Serajul Huq said, ‘[The information is] completely wrong. I was not a director there.’
• Md Aminul Haque, Nazim Asadul Haque and Tarique Ekramul Haque of Bangla Trac Ltd, in July 2006, became directors/shareholders of the offshore company Pyramid Rock Ltd. Tareq Haque told New Age that his brother who set up the company was a non-resident Bangladeshi. ‘The company was set up to do cotton trading in Bangladesh but ultimately that did not happen, and it has now been closed down. There is no illegality as no money was taken out of Bangladesh.’
• Captain Sohail Hasan of the ship builder Western Marine, between August 2006 and November 2007, using a Singapore address, became director/shareholder of four offshore companies — Noble Pacific Worldwide Ltd, Titan Alliance Ltd, Surreal Worldwide Ltd and Prominent Shipping PTE Ltd. Sohail did not respond to an e-mail from New Age.
• FM Zubaidul Haque, the chairman of the Mascot Group of Companies, in May 2007, along with his wife Salma, became director/shareholder of the offshore company Spring Shore Incorporated, which ceased to exist sometime before 2010. Zubaidal said, ‘The information is not correct. I am not aware of that company.’
• Mahtabuddin Chowdhury, the managing director of Shetu Corporation, in August 2007, along with his wife Ummeh Rubana became director/shareholder of the offshore company Talavera Worldwide Inc. Mahtabuddin has not responded to an e-mail.
• Iftekharul Alam, chairman and managing director of Spark Ltd and Omnichem Ltd, and his daughter-in-law Fawzia Naaz, the owner of Sitylink, in December 2007, using Singaporean addresses, became directors/shareholders of the offshore company Paume Technology Ltd. Iftekharul said that he needed time to check details of the companies.
• ASM Mohiuddin Monem, the deputy managing director of Abdul Monem Ltd, in June 2008, along with his wife, Asma Monem, became director/shareholder of the offshore company Magnificent Magnitude inc. Mohiuddin accepted that he had set up the company but said that ‘that was a long time back. It was set up to undertake commodity trading. The company is no longer there. There was no money involvement. The company was not activated.’
• Sharif Zahir of the Ananta Group, in February 2009, became the director of the offshore company CPAT (Singapore) Private Ltd. He said that the company was not set up by him but by an international partner company that intended to invest in Bangladesh but it subsequently pulled out. ‘The company was closed down in 2011,’ he said.
Local businessmen?s link to offshore cos revealed
