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Pakistan authorities probe Singapore developer for alleged multi-billion rupee fraud; delayed ‘Creek Marina’ project leaves investors stranded

In Pakistan, authorities are probing a Singapore-based housing developer for allegedly defrauding residents of billions in rupees. Over nearly 18 years, affected investors haven’t recovered their funds. Federal Investigation Agency (FIA) is investigating money laundering accusations. Legal battles and amendments ensued, impacting the Creek Marina project.

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PAKISTAN: Pakistani authorities are investigating a housing developer based in Singapore for allegedly cheating residents out of billions of rupees.

Despite the passage of almost 18 years, the affected individuals have not yet seen the return of their funds.

The victims, who invested their hard-earned money in the project, approached authorities, including the Federal Investigation Agency (FIA), to report the alleged fraud.

For the years to come, the investigation led to complex legal battles, amendments to agreements, and accusations of money laundering.

PAC refers ‘Creek Marina’ project case to FIA for investigation

The FIA is already investigating allegations of defamation, banking fraud and money laundering against Singaporeans Dr Naseem Shehzad and his son Umar Shehzad as well as other associates of the project and has put their names on the watch list.

On 9 August this year, in a letter signed by the Public Accounts Committee (PAC), Joint Secretary Aurangzeb instructed the FIA to thoroughly investigate alleged corruption and fraud in the Creek Marina project based on a complaint from a victim named Syed Danish Ghazi, who is among those affected by the issue.

Ghazi, who had paid Rs16.8 million over four years for a Rs20 million apartment booking, reported that the developer is now asking for additional funds.

Despite his request for reassurances, the company did not provide any and instead cancelled his allotment through a letter from a well-known law firm.

The letter mentioned that the PAC chairman had directed an inquiry into the matter and, if the company is found to be engaged in irregularities, it should be blacklisted according to the rules, with a comprehensive report promptly sent to the PAC Secretariat.

Creek Marina project

In 2003, Pakistan was experiencing a boom in constructing high-rise luxury flats.

During this time, Meinhardt Singapore Pte Limited, a company based in Singapore, unveiled plans for a prestigious project known as Creek Marina, located near the Arabian Sea in Karachi’s affluent Defence Housing Authority (DHA).

Pakistan-origin Dr Shahzad Nasim, a representative of Meinhardt, signed an agreement with DHA Karachi to secure the lease of a prime waterfront property spanning 92,000 square yards (19 acres) in the ongoing development of Phase 8. The estimated current value of this land exceeds US$150 million.

As outlined in their contract, Meinhardt was tasked with designing, constructing, developing and marketing the luxury flats on the land within three years.

Furthermore, DHA undertook this bold venture in collaboration with a company lacking a history of constructing residential projects and was primarily focused on design and consultancy services, in hope that, once the project is built, DHA would eventually gain a 15% stake in the apartments constructed.

For that purpose, Meinhardt established a local company called Creek Marina Private Limited.

However, through another shell company, Meinhardt allegedly opened “fake” accounts in local banks without undergoing registration with the Board of Investment, the Securities Exchange Commission of Pakistan, or the State Bank of Pakistan.

In the meantime, the company began marketing the project as a luxurious 6-star venture with eight towers of 24 floors, offering three and four-bedroom apartments and several penthouses.

This collaboration between DHA and Meinhardt boosted public trust and encouraged them to invest their savings.

The apartment sales began on 20 June 2007, and following the usual practice for housing projects, people were asked to make deposit payments to reserve flats and other commercial units.

Consequently, more than 300 families deposited Rs2.5 billion, but authorities suspect the reported transactions are incomplete and the actual sum is much more.

Originally intended to be completed and handed over to buyers by 31 December 2009, the project encountered delays that hindered its timely execution.

Instead of fulfilling the promise, Meinhardt allegedly transferred funds abroad, potentially violating foreign exchange laws.

Upon discovering that the project, for which they had invested substantial sums, was nothing more than an empty promise, the investors reached out to federal investigators to report the fraudulent conduct.

Halted construction and discord with DHA

When the project’s construction didn’t begin on time as planned, the housing authority in Karachi and the project managers changed their agreement on 5 May 2005.

This revised arrangement divided the project into two phases instead of eight.

Despite the amendments to the agreement, this project could not be completed in time.

On 4 June 2009, a second change was made to the agreement. In this amendment, DHA unexpectedly decided to decrease its portion of the apartments from 15% to 3.75%, despite there being little progress in constructing the project.

According to the new agreement, the project would be finished and handed over in three phases instead of the initial two. The first phase had a target completion date of June 2011, the second phase by December of the same year, and the third phase by June 2012.

Again, the company was unable to finish the project within the designated timeframe.

In 2010, work on the project came to a halt when the Chinese contractors employed by Creek Marina (Pvt) Limited, using funds from the allottees, left the project.

Eventually, Creek Marina encashed the performance guarantees of these Chinese contractors.

Instead of transferring around Rs1 billion to the project’s accounts, there was an effort to divert the money through a fraudulent account of a related entity, Creek Marina Singapore Pte Ltd, based in Singapore.

This was done to move the money abroad, benefiting local partner Aftabuddin Qureshi.

When DHA noticed these fund diversion attempts, they filed money laundering cases in the Sindh High Court and froze the accounts.

However, both cases were later retracted, even though they involved significant charges of fraud and illegal gain.

Creek Marine Action Committee

Meanwhile, around half of the allottees, approximately one hundred in number, established the Creek Marina Action Committee under the leadership of Yousaf Mirza. This group chose to engage with DHA and CMPL to address the problem.

The committee members had a meeting with Dr. Shahzad Nasim, the company’s owner, in Dubai in May 2012. They were persuaded that cooperating and fulfilling their payments would lead to the delivery of their apartments within three years.

However, the committee harboured doubts about Dr Nasim’s assurances and thus lodged a complaint with the National Accountability Bureau (NAB). This action prompted NAB to initiate an investigation, subsequently leading to additional legal proceedings.

While legal proceedings were ongoing, it’s said that NAB facilitated a resolution between the Creek Marina Action Committee and Dr. Nasim.

The arrangement concluded with the NAB investigation being closed and a partial project delivery expected by June 2022.

Although NAB officially closed its case in 2019, there has been minimal advancement on the project since then, leaving the allottees with limited options but to approach NAB once again.

Legal conflicts between DHA and development project management

In 2014, the DHA initiated a First Information Report (FIR) against the proprietor of the company, who holds Singaporean citizenship.

In the FIR, DHA accused them of fraud and money laundering to the tune of Rs3 billion.

Even with the grave accusations, the charges were eventually dropped, leading to a third amendment of the project agreement between DHA and Creek Marina on June 18, 2019.

This new arrangement stipulated that all funds for the project would be safeguarded in an escrow account, and an accelerated development approach would be adopted. Additionally, DHA’s 15% ownership share was reinstated according to this agreement.

Meanwhile, Creek Marina still remains unfinished.

Abandoned building, Creek Marina (Photo: Google Maps)

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Civil Society

Three women to contest charges over pro-Palestinian procession outside Istana

Three Singaporean women, charged under the Public Order Act for organizing a pro-Palestinian procession on 2 February, will contest their charges at trial, a court heard on 18 September. About 70 people participated in the February event, carrying watermelon-adorned umbrellas as a symbol of Palestinian resistance while delivering letters to then-Prime Minister Lee Hsien Loong.

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18 September 2024

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SINGAPORE: Three Singaporean women charged in connection with a pro-Palestinian procession to the Istana will contest their charges at trial, a court heard on Wednesday (18 September).

The defendants are Annamalai Kokila Parvathi, 35, an activist with the Transformative Justice Collective (TJC); Siti Amirah Mohamed Asrori, 29, a social media influencer; and Mossamad Sobikun Nahar, 25, a community worker.

They were charged in June under the Public Order Act for organizing an unpermitted procession on 2 February.

During the court hearing on Wednesday, the trio, through their lawyer, indicated their intention to contest the charges and claim trial.

Siti Amirah and Mossamad are accused of organizing the procession that occurred between 2pm and 3pm along the perimeter of the Istana, a restricted area.

Kokila is charged with abetting the conspiracy by collaborating with Siti, Mossamad, Alysha Mohamed Rahmat Shah, Anystasha Mohamed Rahmat Shah, and other unnamed individuals to organize the event.

According to a previous police statement, around 70 people gathered outside a mall on Orchard Road at about 2pm on 2 February before marching towards the Istana.

They carried umbrellas painted with watermelon images, symbolizing support for Palestinians amidst the ongoing Israel- Palestinian conflict.

The watermelon, reflecting the colors of the Palestinian flag, has become a symbol of solidarity.

Social media posts indicate that participants of the Letters for Palestine event walked from Plaza Singapura to the Istana to deliver letters addressed to then-Prime Minister Lee Hsien Loong.

The cases have been adjourned to October for pre-trial conferences.

If convicted under the Public Order Act, the women face a potential penalty of up to six months’ imprisonment, a fine of up to S$10,000, or both.

The police have reiterated their call for the public to avoid actions that could disrupt peace, public order, and social harmony in Singapore.

They advised that while strong feelings about the Israel-Hamas conflict are understandable, lawful means of expression, such as participating in organized forums, dialogues, and donation drives, are preferable to illegal protests.

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Court Cases

New Silkroutes Group ex-director jailed for market rigging; Prosecutors label Goh Jin Hian as ‘mastermind’

Teo Thiam Chuan William, former finance director of New Silkroutes Group (NSG), was sentenced to 12 weeks in jail on 16 September for his involvement in a market rigging scheme. The prosecution labeled co-accused Goh Jin Hian, former CEO and son of ex-Prime Minister Goh Chok Tong, as the “mastermind” behind the conspiracy to inflate NSG’s share price from S$0.285 to S$0.50 in 2018.

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17 September 2024

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SINGAPORE: Teo Thiam Chuan William, the former finance director at New Silkroutes Group (NSG), has been sentenced to 12 weeks in jail on Monday (16 September) in court for his role in a market rigging scheme.

This sentencing marks the first revelation of case details as Teo is the first among four co-accused to plead guilty.

During sentencing argument, the prosecution has labeled former CEO Goh Jin Hian as the “mastermind” behind the scheme.

Teo, 55, pleaded guilty to six charges under the Securities and Futures Act for abetment by conspiracy over false trading and market rigging transactions.

Goh, the son of former Prime Minister Goh Chok Tong, is alleged to have led a conspiracy to inflate NSG’s share price from S$0.285 to S$0.50 in 2018.

NSG, an investment holding company listed on the Singapore Stock Exchange (SGX) since 2002, operates subsidiaries in oil trading, information technology, and healthcare.

As the finance director, Teo was responsible for managing the company’s accounts, overseeing funding, mergers, and acquisitions. He also controlled NSG’s corporate securities trading accounts and was authorized to conduct share buybacks.

The co-accused in the case include Oo Cheong Kwan Kelvyn, 53, who was the executive director and chief operating officer of NSG, and Huang Yiwen, 40, the sole director of the commercial market maker GTC Group.

Originally, NSG focused on oil trading, electronics, and IT product distribution.

In December 2016, the company expanded into healthcare by acquiring clinics and medical supply companies. These acquisitions were primarily financed through the issuance of NSG shares.

However, in 2017, NSG’s efforts to acquire additional companies and raise capital through private placements were hampered by a decline in its share price.

From January to May 2017, NSG’s share price fluctuated between S$0.70 and S$0.90. However, it dropped to approximately S$0.40 to S$0.50 in June and fell further to a low of S$0.285 in November.

On 29 November 2017, NSG applied to halt trading of its shares, which led to a trading suspension a few days later. During the suspension, which lasted until 25 February 2018, NSG entered into several corporate transactions involving potential new share issuances.

On 21 February 2018, NSG proposed a placement of over 11 million new shares at S$0.44 per share to an external investor, Dr Andrew Chua Soon Kian, aiming to raise S$5 million. This placement was completed in March 2018.

Additionally, in February 2018, NSG announced a memorandum of understanding with Mr Shen Yuyun to acquire two medical supply companies in Shanghai, planning to issue new shares at S$0.50 each for the S$65 million acquisition.

The same month, NSG also disclosed a memorandum of understanding with Haitong International Securities, where Haitong would subscribe to a S$5 million convertible bond issued by NSG. The bond, maturing in two years, would offer an annual interest rate of 5 percent.

Prosecution Alleges Complex Scheme to Manipulate NSG Share Prices Using Multiple Accounts

While trading was suspended, Teo and his three co-accused allegedly engaged in a scheme to artificially inflate the price of NSG securities, according to the prosecution.

The scheme, as outlined by the prosecution, employed three primary methods: using GTC’s trading account to place and execute orders for NSG securities, utilizing NSG’s share buyback accounts for similar trades, and leveraging Goh Jin Hian’s personal trading account for additional transactions.

As a commercial market maker registered with SGX, GTC was prohibited from manipulating share prices. Market makers are typically required to enhance trading liquidity by providing competitive bid-ask quotes continuously within an agreed-upon spread.

Despite this, Teo, Goh, and Oo are alleged to have hired GTC to artificially boost and maintain NSG’s share price, masquerading as legitimate market-making activities. This manipulation aimed to enhance investor confidence and facilitate the completion of announced corporate transactions, as well as support future share placements.

On 4 February 2018, Goh reportedly instructed Teo to find a market maker to support NSG’s share price. Subsequently, NSG engaged GTC between 21 and 28 February 2018.

Goh, Teo, and Oo allegedly set a target price of S$0.50 for GTC to achieve.

Over the course of six months, starting from late February 2018, the four men are said to have conducted the market-rigging scheme.

Goh and Co-Accused Allegedly Discussed Timing and Pricing for NSG Trades

They communicated via text messages and emails to coordinate their actions, including timing and pricing for NSG securities trades. For instance, Goh allegedly urged Teo to place bids at specific times and requested that GTC be reminded of their target price of S$0.50 in an email.

In a group chat, Goh is said to have suggested delaying GTC’s payment until the share price reached S$0.40 by May.

The trading suspension on NSG shares was lifted after the market closed on 25 Feb 2018. The following morning, Teo and his co-accused allegedly strategized to boost the opening share price of NSG to reach their target.

According to the prosecution, Huang used GTC’s trading account to place buy orders during the pre-market routine before trading officially began at 9 am.

On 26 Feb 2018, NSG shares opened at S$0.390, representing a 36.84 percent increase from the last traded price of S$0.285.

Teo and Huang continued to place orders and execute trades in early March 2018 to further artificially inflate the share price.

The prosecution sought a 12-week jail sentence for Teo, describing the scheme as “sophisticated, well-coordinated, and effective” in manipulating the price of NSG shares to facilitate corporate transactions. They emphasized that Teo played a “critical role” as finance director in the scheme.

The prosecution noted that the scale of the market rigging was significant, causing “great distortion” in the market for NSG securities.

Pre-Trial Conferences for Goh, Huang, and Oo Set for 26 September

On the 31 days covered by Teo’s charges, the trades and orders executed by Teo, Huang, and Goh accounted for 28.78 percent of the total market volume of buy trades.

Additionally, they set the intraday high on 11 trading days and increased the closing price of NSG securities on 22 trading days.

The prosecution argued that the scheme was a “concerted and successful effort” to make NSG shares appear more attractive than they would have under normal market conditions.

It was intended as a “quick and convenient way” to support NSG’s expansion and raise capital through new share issuances. The use of GTC was described as creating “a veneer of legitimacy” for their manipulative trades.

Although Goh was identified as the mastermind, prosecutors highlighted Teo’s important role as the main liaison between NSG and Huang.

Teo is set to begin his jail term on Wednesday (18 Sept).

The cases for Goh, Huang, and Oo are currently at the pre-trial conference stage, with the next session scheduled for 26 September. Court records indicate that Huang intends to plead guilty.

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