S Alam’s Aladdin’s lamp

S Alam Group proprietor Mohammed Saiful Alam has constructed a enterprise empire in Singapore price at the very least about USD 1 billion, though there isn’t any file of him taking any permission from Bangladesh Financial institution (BB) to take a position or switch any funds overseas, an investigation by The My Information has discovered. 
 
The Bangladesh central financial institution has up to now allowed 17 companies to invest outside the country, and this Chattogram-based enterprise big is just not on that listing. But in Singapore, Alam purchased at the very least two resorts, two properties, one retail area, and different properties over the past one decade, all of the whereas in search of to take away his identify from the paper trails, paperwork present.

As of January 10, 2023, the central financial institution has cleared roughly about USD 40.15 million to be invested overseas globally, a BB doc reveals. The determine is 10 occasions lower than what Alam has spent simply to purchase two resorts and one retail area – price over USD 411.8 million – in Singapore since 2009.

The BB doc additionally reveals that simply over USD 107,000 have up to now been despatched to Singapore legally by quite a few firms, and none of them is owned by Alam.

The My News contacted Bangladesh Bank in writing for feedback on S Alam’s funding overseas, however the Financial institution didn’t give any official response.

Primary details about abroad funding is just not formally categorised. But it seems to be thought to be a prime secret by the regulatory financial institution.

Nonetheless, three highly-placed sources throughout the central financial institution having direct data of the matter confirmed that Alam by no means took permission from them. All of them spoke on the situation of anonymity however confirmed the authenticity of the BB doc that we now have obtained.

“You’ll be able to relaxation assured that S Alam has by no means taken our permission to ship cash overseas,” one among them advised The My Information, which was individually corroborated by the 2 different sources.

Bangladesh’s Money Laundering Prevention Act 2012 prohibits offshore investments with out clearance from the central financial institution. It’s punishable by as much as 12 years of imprisonment and a positive twice the quantity despatched out.

S Alam Group was based by Alam in 1985, and has since risen to turn into one among Bangladesh’s largest conglomerates.

His enterprise pursuits vary from commodity commerce to fishing, constructing supplies to actual property, textiles to media, intercity buses to transport, and energy and power to banking and insurance coverage. 

The My Information contacted Saiful Alam in writing twice – on July 6 and on July 23 – to touch upon our findings. We despatched Alam a set of elaborate questions detailing our findings about his supply of funding and investments overseas, requesting him to offer his model. He responded through his lawyers, A Hossain & Associates, each occasions, saying he would not make any comment until we shared the total report with him earlier than publication, which isn’t a journalistic follow.

Hopscotching havens 

This newspaper is in possession of paperwork that reveal elements of the net of the offshore enterprise Alam has constructed along with his spouse Farzana Parveen. Our investigation has tracked down investments linked to Alam and his spouse in Singapore, British Virgin Islands and Cyprus.

A small Mediterranean nation, Cyprus launched its Golden Passport programme in 2007. Beneath the scheme, rich foreigners have been provided Cypriot citizenship in trade of investments of about €2 million (USD 2.5 million) of their actual property, together with one other €200,000 in contributions to the Cypriot authorities’s analysis and land growth fund, based on quite a few worldwide enterprise consultancy companies.

Two years later, on August 27, 2009, Saiful Alam and Farzana Parveen based Canali Logistics Pte Ltd in Singapore, itemizing themselves as Cypriot residents and residents of Singapore, based on the corporate profile obtained from Singapore’s Accounting and Company Regulatory Authority (ACRA).

The corporate’s issued and paid-up share capital was price USD 22.34 million (30 million Singaporean {dollars}) on the time. Alam and his spouse have been the only real shareholders, with Alam controlling 70 p.c of the 30 million shares and his spouse the remainder 30 p.c.

Non-Singaporeans can get residence permit in the event that they put money into Singapore. Singapore is dwelling to a few of the world’s prime companies, together with some Bangladeshi conglomerates. In keeping with the offshore leaks database created by the Worldwide Consortium of Investigative Journalists, almost 6,000 shell firms are linked to Singapore.

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Alam and his spouse are additionally linked to an offshore shell firm, Peacock Property Ltd, within the British Virgin Islands (BVI). Greater than 17,000km away from Singapore, BVI is a tax haven with no revenue, company, or capital features tax.

Alam additionally purchased an organization – ACLARE Investment Ltd – in 2016 in Cyprus, one other tax haven. The corporate was later renamed ACLARE International, based on documents obtained from Cyprus’ Division of Register of Firms and Official Receiver.

“This can be a clear instance of illicit monetary switch, particularly if no credible proof is on the market that funds made for the Golden Passport, buy of belongings and investments made in a foreign country, together with offshore firms in tax havens got here from reputable international revenue,” stated Dr Iftekharuzzaman, government director of Transparency Worldwide Bangladesh.

Former Bangladesh Financial institution governor Dr Salehuddin Ahmed stated there are two authorized methods to ship cash overseas for funding or commerce by companies.

One is the Exporters’ Retention Quota (ERQ), which is a share of the foreign exchange remittance earned by an exporter that they’re allowed to retain “just for imports and reimbursement of international mortgage of the exporters or their subsidiaries and sister issues” as per BB guidelines.

The opposite methodology, Dr Ahmed defined, could be taking permission from the BB to take a position a portion of this ERQ overseas.

“However this doesn’t imply they’ll open an entirely completely different entity and do enterprise there. It may very well be a subsidiary. Bangladesh Financial institution has allowed solely a handful of firms to do that [invest abroad],” he stated, with out giving any names.

The Gold Rush 

5 years after its launch, Alam’s Canali Logistics proceeded to purchase a 328-room lodge – Resort Grand Chancellor Pte Ltd – in Singapore’s “Little India” for about USD 177 million, according to a circular despatched by the lodge’s earlier homeowners to its shareholders and the Singapore Securities Alternate on August 26, 2014.

“Beneath the SPA [sales and purchase agreement], it’s offered that the Consideration [the contract value] might be paid in money in numerous instalments,” the round reads, including that Canali has already “paid S$18.6 million (about USD 14m) inclusive of the preliminary deposit and the steadiness deposit upon execution of and pursuant to the phrases of the settlement.”

A Singaporean regulation agency represented the lodge within the deal.

Filings made by Resort Grand Chancellor with ACRA, the Singaporean regulatory authority, stated its belongings have been price USD 314 million on the finish of 2021, with a yearly income of roughly about USD 7.4 million.

The lodge’s firm was renamed Grand Imperial Hotel Pte Ltd a yr after the acquisition, and now operates below the model identify of Hilton Backyard Inn Serangoon on the coronary heart of Singapore.

 

In 2016, Canali purchased a 27,000 sq. ft industrial area in Singapore’s 19-storey Centrium Sq. for USD 100.53 million, based on The Enterprise Occasions, a Singaporean newspaper.

A yr after this acquisition, Canali Logistics modified its identify to Wilkinson International Pte Ltd, whose belongings have been price almost USD 1 billion (Tk 10,000 crore) in 2021. On the time of penning this report, the Singaporean authorities didn’t have the 2022 recordsdata.

Whereas the company bought one property after one other, its three-year annual turnover didn’t reveal that it made as a lot cash because it spent.

Wilkinson’s monetary statements present its annual gross sales income by no means topped USD 78 million between 2019 and 2021. It was USD 35 million in 2020 and USD 36 million in 2019.

But between 2019 and 2021, the corporate spent at the very least USD 567 million in investments, which is a number of occasions the quantity it earned, Wilkinson’s monetary statements present.

To steadiness this, the corporate took USD 458 million in financing throughout this era.

Whereas financing might imply each fairness and borrowing, analysts trying on the statements famous that since Alam and his spouse have been the only real shareholders at the very least till the top of 2020, this quantity would probably should be financial institution borrowings or money loans, and never fairness.

The smokescreen  

This large Singaporean enterprise operations run behind the façade of an handle that seems to exist solely on paper.

The My Information despatched a supply to the registered handle of Wilkinson who appeared by way of the enterprise listing within the foyer of the Ocean Monetary Centre on Collyer Quay Street, the official handle of Wilkinson. Wilkinson Worldwide was not on the listing. However the regulation agency that was concerned within the firm’s lodge deal was discovered on the identical handle.

In keeping with Singapore’s open government data portal accessed by The My Information in June 2023, over 500 shell firms ran their operations from that constructing, though a few of them are not in operation.

Alam and his spouse resigned as administrators from Wilkinson on December 16, 2020, and transferred possession to an offshore entity, Peacock Property Holdings Ltd, within the British Virgin Islands. An infamous tax haven, British Virgin Islands made headlines after the 2017 Paradise Papers leak uncovered offshore actions of a few of the world’s strongest individuals and corporations.

Peacock Property’s handle was discovered to be registered within the identify of an offshore agent, Newhaven Company Providers, registered with the British Virgin Islands’ Monetary Providers Fee.

Newhaven’s workplace, positioned in a modest four-storey yellow building close to a central roundabout on James Walter Francis Freeway in British Virgin Island’s Street City, serves as a postal workplace field for different offshore firms too, based on the 2017 Paradise Paper leaks. 

In 2015, Newhaven Company was penalised with a fine of USD 25,000 below BVI’s cash laundering legal guidelines “for failing to correctly have interaction in or undertake buyer due diligence” and “for failing to undertake related measures or extra measures or checks in non-face to face enterprise relationships.”  

Cleansing the slate 

Alam nominated Ong Lay Kim, a Singaporean nationwide with no discernible on-line presence that The My Information might discover as the only real director of Wilkinson after he eliminated his identify from the Singaporean firm.

Alam’s identify can’t even be discovered wherever within the paperwork of Hotel Ibis Singapore Novena, the widely-publicised 2019 purchase by his company for USD 126 million.  
 
Filings with the Singaporean authorities made by the lodge present that it’s owned by a string of paper firms, all current within the places of work of the regulation agency talked about above – and the last word proprietor is an offshore firm within the British Virgin Islands.   
 
The lodge is – and has been – owned by an organization referred to as Canopus II Pte Ltd since 2013, however the firm’s present handle is similar as Wilkinson’s, all the way down to the unit quantity.  

Canopus’s sole shareholder is a BVI-based firm referred to as Hazel International Pte Ltd, additionally registered at Wilkinson’s workplace handle. Hazel was arrange simply three months earlier than its sale to Alam-controlled firm in June 2019, based on paperwork obtained from Singapore’s Accounting and Company Regulatory Authority.  

Along with being a tax haven, the BVI is a secrecy jurisdiction, and corporations will not be legally obliged to call their shareholders or administrators on any official filings.

Nations within the Caribbean islands don’t often go after shell firms, as a result of they need the cash to flow into inside their system, stated Ahsan H Mansur, Govt Director of Coverage Analysis Institute.

“They don’t want the tax. They want the funding. So, they’ll provide tax exemptions. However we want our taxes, and by taking the cash in a foreign country, they [money launderers] are depriving our nation of taxes,” stated Mansur, additionally former chairman of BRAC Financial institution.  
 
He famous that this must be stopped on the supply, for instance, by not permitting these individuals to personal banks.  

The puppet director 

Alam introduced “On line casino kingpin” Shahedul Huq on the board of his Singaporean firm on October 25, 2012.  
 
On the time, Shahedul was a director of Dhaka-based Union Financial institution, owned partly by S Alam Group. Alam’s son Ahsanul Alam was Union Financial institution’s chairman till mid-June 2023, when he grew to become chairman of Islami Financial institution, the place S Alam Group has vital stakes. The junior Alam, 28, can be a present director of S Alam Group.  
 
Shahedul was a director each at Union Financial institution and Wilkinson till 2018.

Throughout this era, Reliance Finance, an S Alam Group-owned Bangladeshi firm now renamed Aviva Finance, acquired placements price greater than Tk 2,866 crore from Union Financial institution, based on Union Financial institution’s monetary studies.

Placements are the sale of securities or bonds to buyers to boost capital.

Following media studies late final yr exposing how S Alam Group had been borrowing cash from Islamic banks it has vital stakes in, Bangladesh Financial institution discovered that majority of Union Financial institution’s complete disbursement went to 300 native shell firms, or firms that exist solely on paper, Bangla every day Prothom Alo reported on the time. 

In the course of the 2019 drives in opposition to unlawful casinos, the Anti-Corruption Fee recognized Shahedul amongst these utilizing playing dens to launder soiled cash – and he was given the favored moniker of “Casino Shahedul“. 
 
In November final yr, a Dhaka courtroom sentenced him to 5 years in a case over possessing Tk 32 crore in unlawful wealth. Shahedul fled the nation and by no means confirmed up earlier than the courtroom, ACC investigators stated.  
 
Open information from American voter data present that Shahedul and his spouse Sarina Tamanna Huq are registered voters in Canton, Michigan, and have properties there.   

Story of two properties  

Information obtained from the Inland Income Authority of Singapore present that Alam and his spouse owned a 12,260 square feet residential property in Novena, central Singapore, till 2021.  

The asset’s rental value was USD 570,000 in 2018, the earliest yr the property may very well be linked to Alam. Then in 2022, a Singaporean belief – Zico Belief Ltd – grew to become its authorized proprietor. 

Zico Belief’s web site states that the advantages of organising a belief embrace confidentiality and wealth safety. “Trusts might be established offshore (exterior of the settlor’s dwelling nation) and privately, thereby making certain confidentiality of the settlor,” stated the web site.

It provides, “Wealth safety is a significant benefit of personal trusts. Because the trustee is the authorized proprietor of the belongings, the settlor relinquishes his rights. Normally, this ensures a type of safety in opposition to collectors, chapter, trade controls, hostile governmental authorities and many others.” 

The couple owned a second home in Singapore till 2023, when the possession was transferred to a different belief referred to as Padang Belief Singapore Pte Ltd.   
 
Singapore abolished property responsibility in 2008. So, the revenue distribution of capital from Singapore trusts are exempt from tax and successors of a Singaporean belief might be included as beneficiaries with none property responsibility. 

UNDER ACC SCANNER  

Capital flight has lengthy been a world drawback, with many large firms and high-profile people working offshore companies to evade excessive taxes at dwelling. As for Bangladesh, between 2009 and 2018 the nation misplaced USD 8.28 billion, almost thrice the price of the Metro Rail Line 6 (Uttara to Motijheel), to illicit cash outflow yearly, based on an estimate by Washington-based think-tank World Monetary Integrity.

Within the wake of mounting allegations of capital flight from Bangladesh, the federal government provided an amnesty in FY 2022-23, permitting Bangladeshi nationals to carry again their undeclared cash from overseas by paying a flat 7 p.c tax. The federal government has withdrawn the amnesty this yr.

When S Alam’s Singaporean empire was increasing and altering fingers in 2020-21, completely different media, together with English every day New Age, reported how S Alam Group had been borrowing 1000’s of crores from Islami Financial institution and different Shariah-based banks in Bangladesh.

After media studies in 2022 unearthed how his firms have been securing one questionable mortgage after one other, the Excessive Court docket ordered the Bangladesh Monetary Intelligence Unit of BB, the Anti-Corruption Fee and the Felony Investigation Division to research the loan scams.

In a suo moto rule on December 4, 2022, the HC requested the respondents to clarify why “the failure and inaction of the respondents in taking acceptable authorized steps and actions in opposition to the entities and individuals who’ve misappropriated and laundered an enormous amount of cash from the Islami Financial institution Bangladesh Ltd. and different banks taking loans within the identify of faux, fabricated and non-existent firms/entities utilizing numerous unethical mechanisms and large irregularities as talked about and disclosed in numerous newspaper studies, shall not be declared unlawful.”

The courtroom additionally requested the respondents to take motion in opposition to the wrong-doers.

The HC order reached the ACC on April 4 this yr.

“We stay vigilant about cash laundering. Presently we’re investigating Islami Financial institution’s lending,” stated Md Khurshid Alam Khan, panel lawyer for the ACC.

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Observe: all figures have been transformed from Singaporean greenback on August 3, 2023.