Jetsetter scams $30m

Jetsetter scams $30m

Investors too afraid to speak out  ...  Ahsan Ali Syed.

Investors too afraid to speak out ... Ahsan Ali Syed.

Aa

Businesses desperate for cash during the financial crisis were seemingly duped by a lender, writes Kate McClymont.

Aa
Ahsan Ali Syed's private Bombardier plane.

Ahsan Ali Syed's private Bombardier plane.

PROMINENT Australian businesses have lost up to $30 million in what appears to be a sophisticated loan scam based in Bahrain and Switzerland.

What the victims all shared was financial desperation. A south coast developer was in urgent needs of funds, as were builders from western Sydney. So too was Jason Kotz, who ran a fruit exporting business from Mildura and Dave Kenny, from the Northwest Motel Group in Western Australia.

The Newcastle property developer Keith Johnson is understood to have made the trek to Bahrain and Switzerland, as did executives from the giant cotton farm Cubbie Station.

Due to the lack of funding available after the financial crisis, many of them were teetering on the verge of collapse. Unable to secure funding in Australia, dozens of businesses beat a path to luxurious offices in Bahrain seeking financial salvation from a plump 39-year-old Indian, Ahsan Ali Syed, whose company, Western Gulf Advisory, claimed it had up to $1.1 billion to invest in Australian projects.

According to WGA promotional material, Mr Ali is ''a trusted advisor of royal individuals and families, high-profile luminaries and people of public importance.'' And what's more, he claimed to have a family fortune of $8 billion to invest.

Mr Ali looked the part. As he sat at his polished desk, surrounded by busts of horses' heads, the jewels on his fingers flashing as he chatted about his exquisite stables and his personal jet, Mr Ali listened to proposal after proposal. And it seems there was not one he did not like.

The group liked the sound of the $110 million luxury resort on the south coast, which was on its last legs. Photocopies of the developer's driver's licence and passport were taken at the Bahrain meeting with Mr Ali and his partner, Omer Khan. He was told they were needed as part of the due diligence checks.

Given he was a former bankrupt and had creditors on his tail, the developer was astonished when the pair returned saying, ''We love the projects and you've passed due diligence … and by the way we don't do $30 million, it is too much trouble. We will lend you $100 million.''

He thought at the time it was too good to be true - and it was.

One after another, Australian investors including John Grabbe and the former Queensland treasurer Keith De Lacy, who were executives trying to mount a private rescue bid for Cubbie Station, signed up with WGA.

Each was required to pay a non-refundable fee of £26,000 ($41,800). Not only that, borrowers had to pay an upfront fee of 1.6 per cent of the value of their loan. That meant most of the Australian borrowers handed over more than $1 million each.

Not one of the dozens of people who signed up for loans with WGA have received their money.

As one investor said, ''they had a book of about 50 excuses'' as to why the funds never arrived.

One group managed to get some money back and Mr De Lacy has confirmed that the Cubbie group has recovered half its estimated $3 million fee.

A fortnight ago, Mr Ali jetted into Madrid on his private Bombardier plane, which has his name on the wing.

He was there to cheer on his newly-acquired first division football team, Racing Santander, in its match against Seville. Last year, he failed in his attempt to buy the English first division team Blackburn Rovers.

This is all the more extraordinary considering that only six years ago Mr Ali, then living in London, left behind a messy flat and £7800 in back rent. He also owed council taxes.

Mr Ali has morphed into a billionaire claiming, erroneously, that he was a graduate of the London School of Economics. Back in Australia, desperate investors are too afraid to speak out as they still hope to recoup their fees.

Some said they had received legal threats from WGA's Australian lawyer, John Mulally.

Many investors read about WGA in the Australian press.

In July, the Newcastle developer Alan Keller was revealed in The Australian newspaper as WGA's first Australian client.

The paper reported his good relationship with Mr Ali and that he was so satisfied with his first loan, he was in the process of concluding a second.

Mr Mulally, who had also been Mr Keller's business partner, was also quoted in the article.

A spokesman for Mr Keller said that he had ''no control'' over the content of the article and that his reported comments could not be used ''as a basis for suggesting he had misrepresented the position''.

Mr Mulally, who sits on the corporation which manages the Australian Technology Park in Redfern, said yesterday: ''I am not in a position to talk without approval from Western Gulf Advisory.''

As for WGA, before its website went down yesterday, it was claiming that ''fraudsters'' were making false and defamatory allegations about its business practices.

Many of WGA's Australian victims have gone under, including the Mildura fruit company and the south coast developer.

Others are still clinging on to hope that somehow WGA will come good.

Aa

From the front page

Sponsored by