It is the story of how around Rs200 million vanishes without a trace and how this whole thing is now in our high courts with injunctions and contempt of court cases. I chose at this stage not to mention the name of the management company or the bank targeted in this interview as I have not had the opportunity to get their version of the facts. I plan to offer that in another interview.
First, why Mauritius?
I was born in the Punjab in India and it was my intention to retire there. I was advised by my financial advisors in the UK that since Mauritius has close ties with India, it would be a good safe place for our family Trusts.
Why did you pick the management company we are dealing with?
I asked my financial advisors in England who were dealing with Trusts at the time which of the Trustees could deal with the Trusts going forward. They said they had association with a Trustee firm based in Mauritius and I contacted the directing mind of this firm. He did due diligence on the Trusts, he agreed to take them over and he even came to the UK to do full due diligence on myself, my wife, the previous Trustees and everything needed for due diligence and Know Your Client.
What means of communication did you use? Email, WhatsApp…?
Up to that stage, we agreed that because the process of the transactions of the Trusts had to be fully transparent to banks and tax authorities, processes had to be on open emails so there is an open transaction between everyone. This changed afterwards.
How much money did you then transfer to Mauritius?
I transferred £3.35 million to the Trustees’ account in five batches, which related to the loans outstanding on the Trusts and repayment was a requirement under UK legislation. Our main contact here is a UK qualified accountant so there was correspondence that the payments had been received and that the loans had been cleared. It was agreed with my main contact, my financial advisor in the UK and myself that moving forward, all communication had to be via WhatsApp, which is encrypted so there can be no hacking, faking or encrypted mail service.
And how were you intending to use that money in Mauritius? It wouldn’t just sit in a bank account doing nothing, would it?
In early 2019, it was recommended that we set up one Trust rather than the four or five we had. So the management company set up a single Mauritian based Trust to deal with the funds. The monies were transferred into the Jonquille Trust and a bank account was created after the bank did due diligence on ourselves. It took the bank almost four weeks to approve the funds from London to Mauritius which it did only after significant due diligence on myself, my wife and my family. In May 2019, I asked advice from my main contact on the investment structures that would deal with £3.35 million.
And you kept in touch with your Trustees throughout, didn’t you?
Yes, but unfortunately, in May, my wife contracted a spinal cancerous tumour and during the whole of that month, we were dealing with the issue of scans, operations and her hospitalisation. We went through a very difficult time, during which I devoted all my time to my wife so during five weeks, I didn’t contact the Trustees in Mauritius. There was also no contact from my Trustees. After that, I contacted my main contact again and asked him to advise on the money and he said he would send me some investment structures.
So nothing fishy until then?
Nothing. But around June/July 2019, I received a WhatsApp from my main contact, the first in a long time, to say, “Did you receive the £500,000 back in your bank account?” I was stunned and asked what this was about. He asked if I had a bank account in Hong Kong and if I had a company called Yu Tong Technology. I said I did not. He then said, “Please ring me. I am very worried now.”
And what did you find out when you rang him?
I found out from him that in the last five weeks, he had transferred £3.35 million to a Hong Kong company. I told him that I was not a shareholder or director or anyone who had anything to do with it. A Google search would show exactly that.
What excuse were you given?
That a hacker had hacked into emails and convinced him, his wife and his brother to transfer £3.35 million to a Hong Kong company with which I had no ties!
Are you accusing anyone or do you believe it was a genuine mistake?
I do not know. As far as I am concerned, I hadn’t communicated with him; he receives these instructions in open emails – not the agreed medium of communication – some of them sent at early hours in the morning UK time, and which should have raised suspicion, and he simply hands over the money!
Did you ask for copies of these emails and transactions?
I did. There was initial reluctance, but finally I was given copies of emails with no other accompanying documents. It transpired that the first request for payment came in around May 17 and there were a number of emails between the company secretary, my main contact’s wife, and the fraudster in which documents were requested from the Hong Kong company.
Were these documents provided?
Not to me. That’s what we were told but we were not allowed to see them. It has taken three years, three court hearings and a contempt of court to get these documents, and what they show is that the due diligence was pathetic and that the checks are laughable. Worse, there was no communication with me during the period the fraud was perpetrated. It was clear that something had gone wrong – why would I transfer these funds?
Did you speak to your main contact after that?
Yes, three phone calls – and it was clear he was not being open and truthful about all the facts. I recorded the conversations – about two hours of tapes. My wife and I decided that we couldn’t trust him anymore and that we had to appoint lawyers in Mauritius. So I flew over to Mauritius and we started legal action against the company handling our Trust.
Did the Trustees report the fraud to the police?
Yes, but the police have apparently closed the file here. There was also a report to the Hong Kong police but it’s going nowhere as the funds have since disappeared in many banks across mainland China.
Did you report all this to the Financial Services Commission (FSC)?
Yes, and they were to investigate how this fraud happened. There has been no update. They said the case is ongoing. It is still ongoing two and a half years later. Those who held the Trusts and failed in their duties as Trustees are still at the helm of their firm and are still transacting business.
What about the Independent Commission against Corruption?
I went there and had a two-hour interview in September 2019. I came over this month and attended their offices with my lawyers. It appears that not much progress has been made. I gave further evidence and documents in order to show how the system failed and the monies were defrauded.
What about the bank in all this?
I wrote to them and they have remained completely silent.
Have you been able to secure new Trustees?
Yes, it took us over two years to get new Trustees in place after court proceedings and one contempt of court action against the management company and the main contact. There are still missing documents. It’s just incomprehensible that everything is done to bring investors here but when the system breaks down, no one seems to care.
Are you suing the bank too?
Not yet. When the new Trustees were in place in early February this year, they wrote to the bank asking for all the transactions related to the Trust and the transfer of money.
How did the bank react?
Silence! I have finally managed to meet them virtually, although I was in Mauritius but I do not have high hopes of securing any information from the bank. I am hoping that the ICAC ensures the information is retrieved in order to determine who was involved in this fraud.
If your trustee asked the bank to transfer the money, what choice did the bank have?
Their mistake is lack of due diligence. Some of the money was transferred within three hours of the request being made! We are talking £850,000 on one email in a few hours! It’s just mind boggling!
What do you suspect in this whole thing?
If I was kind, I would suspect total incompetence in the financial regulative system, from the management company to the bank. I am an OCI (Overseas Citizen of India – Ed) and I have a bank account there. If I want to transfer £5,000 from England to India, the work I have to do is staggering. I have to show why I am doing it, the reason for doing it and show how I am spending it…I have to produce loads of documents for every single payment. Yet, as far as we can make out, the bank here in Mauritius sends the money without any requirements or paper work before the transaction for £3.35 million. To China because Hong Kong is now China! To a Chinese bank! No due diligence whatsoever. It is a total failure on the banking system and a total failure in the regulatory system dealing with the management company looking after our Trust.
Have YOU done due diligence on the management company?
Yes, I have done a lot of research.
Do you suspect fraud?
Yes. I suspect that someone is setting this up and I have been told of other instances of monies being siphoned of Trusts to China. Is there an established fraudulent system? Are management companies doing their job properly? Are the commercial banks equipped to detect possible fraudulent acts and doings? Why is the FSC content to say it’s still investigating? The list of unanswered questions is endless.
Now that things are in court, can you explain to us who you are suing and what for?
We are suing the management company and its directors for the £3.3 million along with interests and costs.
What about the bank?
We haven’t done that yet as we were waiting for the communications. We had no idea as to what was said or discovered. The former Trustees handed over no document that showed that the bank had done any due diligence for any of the payments. So now we are seeking papers and if they refuse to comply with our request, we will ask for a court order to obtain them.
What did the previous court cases lead to?
They led to the former Trustees finally handing over most of the papers but there are papers still outstanding. We don’t know why they are holding on to them but they clearly are and so we are going back to court to get them. It has been an absolute battle to get anything out of the Trustees and the management company. They just will not give us information without a court action against them. And the question is: why?
Your guess is as good as mine. They probably think that I am going to stop as I get old. But I obviously won’t. We are dealing with the entire life’s savings of my wife and I – this is our retirement. We put them in Trusts and they were stolen in a jurisdiction which claims to be financially safe. It is unacceptable and I will not stop at anything to bring this to the attention of one and all.
I saw some email exchanges where the bank was saying they would get the money back and you’d have to pay the bank charges. Where are they going to get the money back from?
The money is gone! It was transferred to that Hong Kong account and went out to over 50 banks in China and was withdrawn.
The work of professionals?
Surreal, isn’t it?
Yes, even three years later, I still can’t believe that I have lost all our life’s savings because a management company and a bank failed to protect my family by doing their due diligence.
Is the management company you are suing still operating normally?
Yes, but The court has granted us an injunction, so they can’t take much money out of their companies and they can’t sell assets.
Are you satisfied with that?
No. They still seem to be able to operate normally, no withdrawing of their licence, etc. Besides, they don’t have anything near the £3.35 million stolen so we couldn’t recover it from them anyway. So our action is going to be against the bank too.
Where is the FSC in all this?
That’s what I am asking myself too. Why does a family from England have to prove that the financial regulative operation by Trustees and banks has failed? Where are the regulatory authorities? They don’t want to know! They will probably only take action when we win our case against the company. For the time being, the company is still allowed to work and is operating. A crying shame.
What about the insurance?
Quite extraordinarily, I have now learnt that the insurance cover that a management company needs to obtain its license is only Rs5 million. Can you believe that?
Is there anything you yourself should have done differently?
Not really. You are dealing with a reportedly reputable bank in Mauritius, you are dealing with a financially regulated management services company in a reportedly financially sound jurisdiction. You couldn’t hope for better credentials regarding financial assets. Within five weeks, with no due diligence, £3.35 million are gone! Yet, there were so many red flags. It’s a disgrace.
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