Affluent tycoons jailed for financial frauds

LAHORE: While Hammad Arshad of Eden Developers was arrested on Friday for hoodwinking public money, law has already taken its course against a leading Karachi Stock Exchange broker, Aqeel Karim Dhedi, who is being interrogated for allegedly inflicting a Rs290 million loss on the exchequer under shares of the Employees Old-Age Benevolent Fund Institution, for illegally constructing a posh housing scheme on valuable state land and for brokering a fraudulent property deal between Pakistan Petroleum Limited and his AKD Group etc. 

Research conducted by the "Jang Group and Geo Television Network" reveals that during the last 10 years or so, the world has been extremely harsh against very well connected multi-billionaires found guilty of taking investors for a ride, for tax evasion, for robbing the state-owned banks, for bribery, insider trading, stock manipulation and accounting frauds etc.

Here follow the brief details of the cases of just a handful of international tycoons, who were sent behind bars during the last one decade or so for committing a variety of frauds mentioned above: 

Former Italian Premier and media wizard, Silvio Berlusconi, was convicted of tax fraud in August 2013.

Since his age had exceeded 70 years, he was exempted from direct imprisonment, and had instead served his sentence by doing unpaid social community service.

As he was sentenced to a gross imprisonment for more than two years, a new Italian anti-corruption law had made the Senate expel and bar him from serving any legislative office for six years.

In 2015, the Forbes magazine had ranked him as the 141st richest man in the world with a net worth of US $8 billion. Berlusconi was Italy's Prime Minister for nine years in total.

Famous Indian magnate and founder of "Sahara India," Subrata Roy, was arrested in February 2014 by police on Supreme Court orders, after he had failed to appear before the Apex Court judges in connection with the Rs4,000 crore deposits his company had not refunded to investors.

Owning diversified businesses and ownership interests that included London's Grosvenor House and New York's Plaza Hotel etc, Roy was then sent to judicial custody in the Tihar Jail, Delhi.Named among the 10 Most Powerful People of India in 2012 by "India Today" and termed by the Time magazine as ‘the second largest employer in India' in 2004 after Indian Railways, Subrata Roy was granted interim bail by Supreme Court of India in March 2014 on condition of depositing Rs 10,000 crore with the market regulator.

As of August 2014, Roy was trying to sell some of his hotel properties to raise enough money.

This is what the BBC had stated about Subrata Roy in February 2014: "The group, worth Indian Rs682 billion or $11 billion, has businesses ranging from finance, housing, manufacturing, aviation and the media. It also has interests overseas - it owns New York's landmark Plaza Hotel and London's iconic Grosvenor House. Sahara also sponsors the Indian hockey team and owns a stake in Formula One racing team, Force India. With more than 1.1 million workers, the group is also India's biggest private sector employer. At the wedding of Roy's two sons in 2004, festivities lasted nearly a fortnight. It was billed as the Indian marriage of the century, and it lived up to the hype. Over 10,000 guests - a veritable A-list of India's power set, including business moguls, Bollywood idols, cricket stars and fashionistas - were airlifted to Lucknow by special chartered planes. Then Prime Minister Atal Behari Vajpayee also flew down to bless the newly-weds."

In 2008, British property tycoon Nicholas van Hoogstraten was arrested in Zimbabwe on currency and pornography charges. Police had raided his home in Harare following a tip-off that he received rent for houses, apartments and shops he owned in Zimbabwe in hard currency.

During the swoop, police had found pornographic material featuring Van Hoogstraten and a 22-year-old Zimbabwean woman. The alleged offences carried the penalty of a fine and forfeiture of money held in violation of the nation’s currency laws.

In May 2014, a British businessman was arrested by the US secret service in connection with an alleged £700 million tax fraud. Mohammad Safdar Gohir was taken into custody in Vegas shortly after cheering on boxer Amir Khan to victory. He was probed for allegedly being part of one of the biggest tax frauds in Europe's history.

Mikhail Khodorkovsky, who was believed to be the wealthiest man in Russia with a fortune estimated to be worth $15 billion and ranked 16th on the Forbes list of billionaires, was arrested and charged with fraud in 2003. He had accumulated considerable wealth through obtaining control of a series of Siberian oil fields unified under the name "Yukos."

In May 2005, the Russian oligarch was found guilty and sentenced to nine years in prison. In December 2010, while he was still serving his sentence, Khodorkovsky and his business partner Platon Lebedev were further charged with money-laundering by the Putin regime. 

Khodorkovsky's prison sentence was hence extended to 2014.

However, President Vladimir Putin had pardoned Khodorkovsky, releasing him from jail in December 2013. There was widespread concern internationally that the trials and sentencing were politically motivated. Upon being pardoned by Putin and released from prison at the end of 2013, Khodorkovsky had immediately left Russia and was granted residency in Switzerland.

In November 2015, a powerful Brazilian businessman, Jose Carlos Bumlai, was arrested for default on his bank loans, for illegally making resources available to a political party and for using a contract of a state company to obtain undue advantages. The sugar and ethanol tycoon was closely connected to former Brazilian President, Lula da Silva, and had visited the head of state's office three times.

In October 2015, according to the "Reuters" news agency, Nigeria had arrested the chairman of a local oil firm as part of a widening graft investigation in Africa's biggest petroleum producer that had also netted a former Oil Minister.

The "Reuters" had reported: "Days after British police detained Alison-Madueke, one of Africa's most powerful women, the official said Nigeria's Economic and Financial Crimes Commission had arrested Atlantic Energy Chairman Olajide Omokore on corruption and money laundering charges."

In September 2015, an Indian jewellery tycoon, M M Ramachandran, was jailed in Dubai for defaulting on loans worth $150 million. Ramachandran, founder of $1.1 billion Atlas group, was hand-cuffed in August 2015 on charges of default on loans worth over Rs1,000 crore ($150 million). The Atlas group has businesses in real estate, jewellery and healthcare.

In June 2013, French business tycoon, Bernard Tapie, was arrested for questioning about an alleged conspiracy with former President Nicolas Sarkozy to "defraud" the French state.

An eminent British newspaper "The Independent" had reported: "The case arises from the sale in 1993 of the Adidas sportswear company, then owned by Tapie. The businessman has accused the state-owned bank Credit Lyonnais of selling the company, in effect, to itself through shell companies offshore. Although he received his asking price, the bank made a large profit when it resold Adidas two years later."

An October 26, 2012 report of the "Forbes" magazine had stated: "Texan Allan Stanford –another former billionaire —was convicted of a $7 billion Ponzi scheme and sentenced in June to 110 years in jail. Hong Kong real estate tycoons, Thomas and Raymond Kwok, were charged in July 2012 with conspiracy to offer advantages to a public servant and misconduct in public office. For now, they are out on bail. Similarly, one of China’s most celebrated and wealthiest entrepreneurs, Wong Ki, was sentenced in 2010 to 14 years in prison sentence for bribery, insider trading and stock manipulation. Now in jail, he remains a billionaire, though his fortune has taken a hit along with the shares of Gome Electrical Appliances, the retailer he founded, which lost $78 million on sales of $3.6 billion in the first six months of 2012."

The "Forbes had added: "Former hedge fund billionaire, Rajaratnam, who once ran the Galleon Group, was found guilty of 14 counts of fraud in what’s been called the biggest insider trading ring of all time. He was later sentenced to 11 years in prison and fined $10 million, apparently the longest prison sentence for insider trading. He has been at a federal prison in Massachusetts since December 2011. Mall tycoon and former Sotheby’s chairman, Alfred Taubman, had spent nine months in jail in 2004 for allegedly rigging art auctions. He insisted he was innocent and published a book in 2007 outlining his road to becoming a billionaire and describing his time in prison. He has since moved on. In 2011, the mall mogul had pledged $56 million to the University of Michigan and was the largest donor in the school’s history, having given $142 million in 2012. In all, he had given more than $250 million to charity, including $26 million to Detroit-area schools."

Research shows that Chae Tae-Won, Chairman of South Korea's S.K. Group, regarded as country's third-largest conglomerate by assets, had spent seven months in jail in 2003 for an accounting fraud. 

Two other Korean billionaires, Chung Mong-Koo of Hyundai Motors and Lee Kun-Hee of Samsung Electronics were also convicted of fraud and tax evasion respectively.

Both were granted Presidential pardons though.

In November 2015, British authorities had discovered £900,000 in hard cash stuffed in plastic carrier bags during raids on the shops and home of a Glasgow-based grocery tycoon of Pakistani origin, Mohammed Ameen Mirza.

Investigators had found £400,000 at Mirza’s luxury home and a further £500,000 was found stashed in a safe at one of his stores.

The discoveries were made during a probe into an alleged £4 million VAT fraud, British media had reported Her Majesty’s Revenue and Customs and cops took part in the operation at Mirza’s villa in Glasgow and three stores in the city.

In 2013, he was reported to have attended a ceremony in Lahore to promote the contributions of the overseas Pakistanis. Chauduary Mohammad Sarwar, the then Punjab governor and former Glasgow Labour MP, had addressed the audience.

In 2014, Mirza was pictured alongside ex-prime minister Gordon Brown and Sarwar at an event in Glasgow aimed at highlighting charity projects involving the two politicians.