KUCHING:
In the latest twist following the HSBC scandal, Canada’s largest insurance and
finance provider Manulife Financial seems to have landed itself in a mess over
its ‘unusual’ mortgage transactions with the Taib clan.
Manulife
president and CEO Donald A. Guloien will on Thursday have to explain to company
shareholders why it provided six
‘unusual’ mortgages totalling Canadian $146 million (RM438 mil) to Sakto.
Sakto
Corporation, a real estate group, was founded in 1983 by Taib Mahmud’s brother,
Onn Mahmud. It is currently managed by the former Sarawak Chief Minister’s
daughter, Jamilah Taib, and her Canadian husband Sean Murray.
The
long-term mortgages were arranged in 2003 and are secured by three office and
residential buildings in Ottawa, known as the Preston Square development.
But
what is unusual and intriguing is the terms of the mortgage.
According
to Swiss-based NGO Bruno Manser Fund (BMF), for every property, two sets of
mortgages were arranged.
“One
at conventional commercial interest rates and another at a staggering 20%
annual interest rate, “payable on demand”.
“The
20% interest mortgages include a $13 million (RM39 mil) mortgage secured on
Ottawa’s 333 Preston Street, a $15million (RM45 mil) mortgage secured on 17
Aberdeen St and a $45 million (RM135
mil) mortgage secured on 343 Preston Street,” said BMF director Lukas
Straumann.
Alarmed
at the Manulife’s unusual mortgage terms,
Straumann has speculated that there is reasonable grounds to suspect
that Sakto Corporation has been used by the Taib family to launder millions of
dollars of corruption proceeds from Malaysia.
“
A 20% annual interest rate in the real estate business means high risk and lack
of commerciality – typical indicators of money-laundering.
“These
transactions point to serious shortcomings with Manulife’s compliance process.
“A
number of red flags should have alerted the compliance office to stop these
mortgage deals,” said Straumann
He
said BMF has sent a letter to Guloien demanding that Manulife explain its Sakto
mortgages, including its customer due diligence and anti-money-laundering
procedures.
He
said it is unusual for a highly-reputed Canadian financial services provider to
conduct multi-million-dollar transactions with Politically Exposed Persons
(PEPs).
Manulife
Financial with C$599 billion under its management is Canada’s largest insurance and financial
service provider with operations in Asia and North America.
Guloien
is set to face some crippling questions from his shareholders.
BMF
has been on Taib’s back over his massive unexplainable wealth which the NGO
claimed was derived from widespread logging of Sarawak by family and crony
companies.
According
to BMF the Taib clan has known stakes in
over 400 companies in 25 countries and worldwide asserts worth US$20 billion
(RM60 billion).
On
Sunday it was reported that global banking conglomerate HSBC was pulling back
from business dealings with the Taib clan.
Seen
as being among several measures at
‘damage control’, the bank had notified all members of Taib family that they were not allowed to hold accounts with the bank.
The
31-year old Taib regime had come under heavy attack by international activists
for a range of reportedly dictatorial and unlawful activities.
BMF
claimed the ‘source’ of Taib and his clan’s wealth came indirectly from logging
the state.
HSBC
had reportedly bankrolled errant logging companies in Sarawak.
A
criminal investigation by UK’s Serious Fraud Office (SFO) in 2012 showed that
HSBC had violated its sustainability policies and earned around US$130 million
(RM390mil) in the process.
The
bank reportedly provided financial services to companies widely suspected of
systematic bribery and corruption.
UK
based NGO Global Witness which exposed HSBC said the institution provided loans
and financial services to conglomerates and companies linked to Taib.
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