Hedley Thomas, National chief correspondent
From:The Australian
March 02, 2011 12:00AM
AUSTRALIAN businesses desperate for funds to stay afloat have been paying millions of dollars in up-front fees to a mysterious Switzerland-based company fighting accusations that it is running a scam.
The company, Western Gulf Advisory, and its head, Ahsan Ali Syed, have vehemently rejected accusations of fraud and of receiving huge fees as part of a “due diligence” process that drives the businesses further into debt.
WGA demands from would-be borrowers an unusually high percentage of the loan being sought as an up-front payment.
Sources said yesterday Australian businesses had sent tens of millions of dollars offshore to Mr Ali since a high-profile Sydney public relations firm, Jackson Wells, was retained last year to promote him and his companies as potential providers of loans of up to $500 million.
But in unusual circumstances, the PR firm said it “sacked” WGA weeks later, after being unable to verify the truthfulness of its widely publicised claims about its capacity to provide the funds to beleaguered businesses.
The media releases distributed by Jackson Wells to the Australian media generated favourable publicity that has continued to attract desperate borrowers to WGA.
The Australian has established that the operators of Queensland’s financially troubled Cubbie Group, the country’s biggest irrigator, paid about $3 million in fees to WGA in the middle of last year.
Mr Ali could not be contacted at his headquarters in the Swiss city of Zug late yesterday, and the company’s Sydney-based solicitor did not return calls.
But in a fierce counter-attack on accusers he describes as “fraudsters” on the home page of his corporate website, he strenuously denies the allegations against him.
“Western Gulf Advisory Asset and Wealth Management, Western Gulf Advisory, based in Zug, Switzerland, and their founder and president Mr Ahsan Ali Syed strongly refute allegations about their businesses being propagated by the fraudsters,” the website says.
“The source of these serious allegations is known.
“They are manifestly false and defamatory.”
WGA’s website says the company and its president “reserve their rights against authors, editors, publishers, distributers (sic) and printers who repeat these allegations in any form; and they expressly reserve their rights against any person or entity which repeats any of the erroneous allegations contained on the website”.
Mr Ali and his companies are under internet siege as a result of a campaign started four weeks ago by a NSW man who set up a website, www.wikifrauds.net, after collating dossiers of documentation on the track record of WGA in Australia and overseas.
The man said yesterday he felt compelled to act after he realised the scale of what he alleged was a global scam preying particularly on struggling Australia and New Zealand businesses which urgently needed cash. He said his site was receiving about 1500 visits a day and that information was pouring in from insiders, companies and individuals who had dealt with WGA.
“It has become a personal challenge for me,” he said. “My motivation is simple — people need to be warned.”
The man, who is in close contact with the Australian Federal Police, said his website had been the target of an organised hacking campaign and that he had taken steps to conceal his identity from WGA.
“The difficulty for a lot of the people who have been sucked in by WGA is that it is extremely embarrassing,” he said.
“I talk to them every day and they live in hope and fear — hope that they will get a loan or their fees returned, and fear that they will be publicly outed and humiliated. But there are no loans. I have told them that it’s just better to come clean.”
Cubbie Group chairman Keith de Lacy said yesterday Cubbie paid significant funds to start a negotiation with WGA for a proposed equity injection of more than $200m into Cubbie, but the talks broke down.
Mr De Lacy, a former treasurer of Queensland, declined to comment when asked if Cubbie and its creditors were “scammed”. But he said WGA had returned about half the fees to Cubbie and he hoped the remainder would be repaid.
“Yes, we were in negotiations with them for an equity investment in Cubbie Station which was supported by the administrators (McGrathNicol) but it ultimately did not make progress and we withdrew. We couldn’t bring it to a conclusion,” Mr de Lacy said.
A source said some of those close to the negotiations now believe WGA had never intended to extend the funds to Cubbie.
Due diligence should ordinarily identify such risks. A Brisbane partner of the administrators of Cubbie Station, McGrathNicol, did not return The Australian’s call.
John Wells, the founding partner of Jackson Wells, the firm WGA hired to help it establish a media presence and credibility in Australia, said he had severed ties with WGA and regretted having made the connection.
“Last August, Jackson Wells had a disagreement with Western Gulf Advisory after we had asked the company to substantiate (the truth of) a number of announcements it had made through the media relating to the funding of projects in Australia,” Mr Wells told The Australian.
“WGA refused to substantiate these announcements. Jackson Wells parted company with WGA immediately.
“We told WGA that we were no longer prepared to work for them. Jackson Wells is owed a substantial amount of money in unpaid fees.”
Mr Ali, who travels in a corporate jet and is believed to live in Lucerne in Switzerland, has had a colourful background in Britain, where he was promoting the potential purchase of Blackburn Rovers soccer club.
But his credibility there was tarnished after an investigation by the BBC last September highlighted serious concerns over his integrity. The BBC said he had left a trail of debts, including thousands of pounds of unpaid rent and council taxes on British properties. It said Mr Ali had misrepresented his businesses and investments and was ordered to cease trading in Bahrain.
Mr Ali responded: “The BBC’s report contained a number of false and misleading allegations.”
Mr Ali has since established a following among football fans in Spain after promising to buy into an ailing club, Racing Santander, and support businesses with introductions and cash injections. Since the BBC investigation, however, journalists in Spain, New Zealand and India have been investigating and reporting adversely on his business activities.
WGA calls itself “a self-sustaining investment and asset management company that has provided investments and services . . . on the basis of its own adequate internal resources”.
Its website says: “WGA believes in providing innovative financing solutions . . . We understand the pressure that is already on today’s businesses and industries. Conventional banks and financing institutions are not helping the situation with their cumbersome loan policies and a pathetic attitude to the borrower’s plight.
“In a career spanning 12 years, the company has established a successful track record of enhancing liquidity and credit status of several clients from a wide cross-section of industries and sectors. WGA is diligently working to become one of the world’s leading financial advisory companies through its extremely confidential and sensitive approach. Western Gulf draws on the rich expertise of 3200 consultants based all across the globe.
“While the firm’s world headquarters is located in Bahrain, Western Gulf Advisory AG is based in Zug, Switzerland.”
