Panama papers leak: Summit, Square, United Group owners linked

Bangladesh politico :The directors of some of Bangladesh’s biggest business conglomerates, including Summit, Square, and the United group, 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 businessman paid to set up their companies.From the ICIJ files, New Age has identified a total of 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 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, Nilifur Zafar MP. Business people around the world often use the secrecy afforded by off-shore companies to conceal assets or place them beyond the reach of their country’s tax authorities – though people may also use them for entirely lawful purposes. An additional issue for Bangladesh residents, those living more than 6 months in the country in one year is the need to comply with the foreign exchange laws which impose tight restriction on the outflow of money.Many businessman though argue that in today’s internationalized world the country’s strict foreign exchange regulations make it very difficult for them to conduct their businesses within the law.From the information in the ICIJ leaked files, Summit Industrial and Mercantile Corporation Pvt appears to be the Bangladesh company 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, Jafar Umeed Khan; and Aziz Khan’s nephew, Md Faisal Karim Khan. Other than Jafar Umeed Khan and Md Faisal Karim Khan, they registered their British Virgin Island companies through a Signaporean address. Aziz Khan told New Age that, “I am a permanent resident of Signapore. 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 to the owners as, unlike in most countries, the names of the company directors and shareholders are not made publicly available.The Summit family directors have gone to greater lengths than practically all the other Bangladeshi 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 which the Summit family members set up in 2005. The company Sharecorp were also named as the ‘shareholder’ of all three of the companies.The Portcullis documents, leaked to ICIJ, however show that Jafer Umed Khan, at least until 2010, owned these companies – though he shared ownership of Gratttanville Ltd with his nephew Md Faisal Karim Khan and that of Borneo Power Ltd with his cousin 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 per year. The only exception to the use of nominee shareholders concern Euro Hub investments, 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, though 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 450-megawatt power station in Sirajgang.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 authorize Mr Muhammed 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 Portcullis Trust 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 Ministry of Power, 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 off-shore 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 Multitrade 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 Samsun H Chowdhury, the founder of the Square group of companies, and Dr. A. M.M Khan a former president of the Bangladesh association of Pharmaceutical Industries, in June 2003, became directors of Fair Trading House which sometime before 2010 was liquidated. Six months earlier, Samsun 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 both became directors/shareholders of Wrightstar PTE which prior to 2010 was liquidated. Dilip kumar denied any involvement in the company. Azmat said, ‘I have no idea what you are taking 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 Sovereign Capital PTE, which was deregistered 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 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, the Director of Western Marine, between August 2006 and February 2007, using a Signapore address, he became director/shareholder of four offshore companies – Nobel Pacific Worldwide Ltd, Titan Alliance Ltd, Surreal World Wide 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 International, 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, became director/shareholder of Talavera Worldwide. Mahtabuddin has not responded to an e-mail. Iftekharul Alam, Chairman & Managing Director of Spark Ltd and Omnichem Ltd and his daughter in law Fawzia Naaz, the owner of Sitylink, in January 2008, using Signaporean addresses, became directors/ shareholders of Paume Technology Ltd. Iftekharul said that he needed time to check details of the companies. ASM Mohiuddin Ahmed, the deputy managing director of Abdul Monem Ltd, in June 2008, along with his wife, Asma Monem, he became director/shareholder of the offshore company Magnificent Magnitude. 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 (Signapore) Private Ltd. He said that the company was not set up by him but by an international partner who intended to invest in Bangladesh, but who subsequently pulled out. ‘The company was closed down in 2011,’ he said.