Cash transfer business folds as MP calls for probe
04 July 2007
By Ted Jeory
A MAJOR money transfer business has called in insolvency experts as thousands of low-pay workers try to discover what has happened to their cash. First Solution Money Transfer Ltd, based at the London Muslim centre in Whitechapel, has admitted owing up to £2 million to some 2,000 creditors who had been sending money home to Bangladesh. The company stopped trading last Wednesday after an investigation by Bethnal Green & Bow MP George Galloway's office and by the East London Advertiser.Its directors say they now fear for their lives and have asked for police protection... amid a growing tide of anger in London's East End and other parts of Britain.
Galloway wrote to new Chancellor Alistair Darling last week asking for an emergency meeting about the collapse. He was still waiting for a response when it emerged Tower Hamlets council leader Denise Jones had been invited to meet Regulatory Reform Minister Stephen Timms about the collapse on Wednesday afternoon (July 4). Galloway, who was meeting the Bangladesh High Commissioner the same afternoon, was furious about the 'abuse of Parliamentary procedure' over the Minister meeting the council leader. It was Galloway's Bethnal Green constituency office which first exposed the financial problems.
Several Bangladeshi newspapers have now reported the Bank of Bangladesh has asked the UK authorities to investigate the company's collapse. First Solution has mushroomed during the last 12 months into a European network of 80 agents. Insolvency practitioner Panos Eliades was appointed on June 29, as Galloway was calling for a police investigation.
Mr Paliades told the Adertiser: "The company is a sinking ship and we've got to stabilise it. When a body dies, it goes to the undertakers for embalming before burial. That's what we are... we do the embalming part." The company's directors insist there has been 'no wrongdoing.'
Dr Fazal Mahmood in a statement blamed media-fuelled rumours for sparking a 'run' on the company, which he said had forced it towards liquidation. The reports had created a 'lynch' mob, he insisted, while he and his colleagues feared for their lives. One of the biggest losers is Dulla Miah, who deposited £70,200 with the company just days before the collapse. He remortgaged his home in Stoke-on-Trent to send cash back for his family to build a house in Bangladesh. "That money was our future life... now it's gone," he said. "My family are heartbroken and worried about me, that I might have a heart attack."
Mother-of-two Rupa, who holds a job in an East End restaurant, sits upright in a dark Brick Lane office. Her eyes well with tears. She walked into a First Solution office and sent £250 to Sylhet in Bangladesh. She says the money for food for her daughters aged six and nine hasn't arrived... after four weeks. "They said it would take a few days," she recalls. "I complained after it never arrived, but they told me to 'be calm' and wait another week. I'm still waiting."
First Solution was run by four directors until last month,, two of them well known in the East End's huge Bangladeshi community. The main man is Dr Mahmood, a 52-year-old businessman from Walthamstow, who according to Companies House owns 35 per cent of First Solution Money Transfer Ltd and is a director of 14 other British companies. He was also until recently managing director of Channel S Bengali community TV, a position the station's bosses described as 'honorary'. Channel S says it has had nothing to do with First Solution.
Another shareholder was Nazrul Islam, a £25,000-a-year reporter on Tower Hamlets council's East End Life newspaper, who initially refused to comment when contacted at the Town Hall by the Advertiser on June 26. Later, he called back saying he had resigned as a director and sold his five per cent shareholding "a couple of weeks ago" due to 'family commitments'. He remains a council employee... but is temporarily away from work for safety reasons.
The other directors are Gulam Robbini Rumi, 35, from Ilford, with a 35 per cent stake, and Shah Mohammad Abdul Hadi, 44, from Stratford, who has a 25 cent shareholding. First Solution's lawyer Gary Adams insists they are not in hiding and have done nothing wrong. A creditors' meeting is likely early next month.
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