In pursuit of a global fee-for-all

AN ONLINE sleuth has a high-profile Swiss company and its owner in his sights.

Ahsan Ali Syed

THE articulate male voice on the telephone in a secure office somewhere in NSW is guarded at first.

"You can call me Investigator One," he tells The Australian. He chuckles at the alias. His ordinary life was much simpler a month ago. The reasons for his caution and the elaborate steps he has taken to disguise his identity become obvious to anyone who visits his newly established website.

Since stepping back from his comfortable day job and taking on an assignment he had never contemplated, Investigator One has been planning strategy, sharing intelligence and responding to contacts in Australia, New Zealand, Spain, Switzerland and Britain seven days a week.

He is determined to stay one step ahead of the publicity-loving, Indian-born Ahsan Ali Syed, founder of Western Gulf Advisory.

The problem for Ali and his Switzerland-based business is that they are accused of being part of a scam with many Australian dupes, some too embarrassed to publicly reveal themselves and still hopeful they will get what they were promised.

"It is like a game of chess and I'm making moves to outmanoeuvre his pieces so that I stay in front and ensure the end result is what I set out to achieve," Investigator One says.

"My real focus is not to get notoriety for myself. My real focus is to ensure that Ali is stopped. I am pointing out the lengths he and his companies have gone to ruining people. I'm getting more information every day that the authorities will be able to use against him. I'm going to keep driving this campaign against him because it is the right thing to do.

"Nobody else was doing it. I started after I was talking to one of the victims, who said, 'How come nobody has set up a website to expose this?' I said, 'Good idea', and I went and did it. If I had a scintilla of concern about being wrong, I would not be doing this. Everything that I am putting out there is information that I am prepared to prove in court."

As Investigator One explains it, this is not financial vigilantism. Instead, he says, he is on a rare "citizen's mission". A month ago, he had no idea how to set up a website. Now it has become a must-read for anyone considering doing business with WGA and Ali.

It contains thousands of words about WGA as well as linked references to investigations by the BBC and other media into the bona fides of Ali. Investigator One's serious allegations have attracted the attention of the Australian Federal Police. Victims are said to include property developers, industrialists and agricultural giants who believed they were dealing with a financial organisation with billions of dollars at its disposal.

The modus operandi, according to Investigator One, is maddeningly simple: in a nutshell, WGA and Ali are accused of pretending they have billions of dollars at their disposal to lend to Australian businesses that have been unable to secure financing from the banks.

But there's a costly catch: a would-be borrower has to first send fees of several million dollars into an account controlled by WGA and Ali while they consider the proposed loan and conduct due diligence. The fees vary depending on the size of the transaction; however, some loans do not eventuate. And the businesses that paid up end up being much worse off for the experience.

It has unfolded under the noses of the financial media and public relations experts, who became unwitting players, and the Australian Securities and Investments Commission despite the suspicions of experts in due diligence, including a leading insolvency firm, McGrathNicol.

The financial woes of affected Australian businesses and their acute embarrassment since sending millions of dollars in "loan fees" to WGA and Ali may ripple for years to come. Investigator One discloses on his website: "To properly understand the situation, one must realise that besides the huge losses these [Australian] companies have sustained, they are all embarrassed and few even discuss it amongst themselves.

"However, the investigator has gained the confidence of many victims and those who very nearly also became victims. Their stories are all the same, the only differences are the amounts paid in fees and the details of their projects.

"Our estimate now is somewhere upwards of $40 million taken out of Australia alone [in fees], and that WGA has outstanding loan obligations of some $1.5 billion with not one of them settled or likely to be settled.

"We receive great encouragement from many victim companies and have received numerous thanks from people who were about to forward money to WGA but after visiting our sites have elected not to proceed.

"It is impossible to estimate the number of financial advisers and brokers who have also put a hold on seeking information from Ali, so we are slowly starving the snake. We do know of certain cancelled applications in cases where we have actually spoken to people or exchanged emails with them, and we have quantified that we have saved these people some fees so far, and that's just since we launched on February 5 online."

Investigator One's mission statement adds: "It is [our] clear aim to force WGA to either settle their loan obligations or promptly refund the borrowers in full with all fees paid and all the costs incurred. They are entitled to be restored to their financial positions prior to their sad involvement with WGA."

Investigator One is also brazenly challenging those whom he is pursuing to litigate against him.

To date, WGA and the colourful Ali have responded with strenuous condemnation of the site and strong denials of the allegations. Legal action, threatened by Ali in a fierce rebuttal of the serious accusations he faces, has not eventuated.

On its corporate website, WGA states: "Western Gulf Advisory Asset and Wealth Management, Western Gulf Advisory AG 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 source of these serious allegations is known. They are manifestly false and defamatory."

For Ali, who has declined to return The Australian's calls or respond to email messages seeking comment, Australia in 2010 was the land of opportunity.

His company's arrival was heralded by a public advertisement published in The Australian in late 2009 that stated a "funding line of USD $100 million from Western Gulf Advisory AG of Bahrain (WGA)" had been procured by a company, Landmark Business Developments International Limited, "to enable LBDI to acquire properties in Australia and Vanuatu".

The public notice was accompanied by an email address for WGA so that other companies, attracted to the idea of getting capital in a post-GFC climate in which banks were not lending, might also receive funds from WGA.

In early January last year, the Fairfax press, led by The Australian Financial Review, published a follow-up article, but the amount had more than doubled to "$220m to sponsor a major industrial support hub north of Adelaide".

A second article in the AFR in late January headlined, "Forget the Big Four, Bahraini dinars are the go", quoted the chief financial officer of WGA, Omar Khan, who said: "This is a world apart from conventional lending and banking practices, where borrowers are exploited with exaggerated rates of return and ambiguous policies."

The article was favourable publicity for WGA. Australian businesses began making a bee-line for WGA and local brokers who were held out as WGA's representatives. To enhance the public message, WGA appointed prominent Sydney public relations firm Jackson Wells to further interest the media in the most favourable ways possible.

Stories of WGA's largesse and so-called financial muscle followed in quick succession in Fairfax and News Limited newspapers, including The Australian. Profiles of a horse-loving Ali in which he described his success and ambitions were put up on WGA's website to enhance the coverage and depict a business with credibility.

But John Wells, founding partner of Jackson Wells, soon smelled a rat. He told colleagues that he was highly suspicious of the claims being made in the media releases that WGA was authorising Jackson Wells to distribute. Wells realised that WGA funds and loans were not being provided to would-be borrowers, contrary to the public comments from WGA and the public perception being created by the media releases.

When he challenged WGA to substantiate the facts, it refused. The PR firm sacked WGA as a client and distanced itself from WGA. It was a highly unusual step.

Sources said while Wells was concerned about the bona fides of WGA during the appointment, he was unaware that another Sydney PR firm, Cannings, had earlier rejected an opportunity to do WGA's bidding. Cannings' head, John Hurst, had heard the WGA spiel, researched the company and decided that under no circumstances would he or Cannings have any association with the company.

"Hurst had fingered them at the start," the source said. Hurst yesterday confirmed that he had declined an opportunity to work with WGA.

But by mid to late 2010, as public relations chiefs were running a mile from WGA, the media interest in Ali was escalating. There was favourable press in The Australian followed by more critical articles in the newspaper in which his indebtedness and other financial anomalies were highlighted; however, the broader media lapped him up with barely a raised eyebrow.

Ali was making the most of it, publicly offering to save Cubbie Station, Australia's largest irrigator, with an injection of more than $200m.

For the directors of the Cubbie Group of companies, which were in administration at that time with McGrathNicol controlling the purse-strings, the chance to escape the financial noose thanks to WGA was tantalising.

The publicity machine rolled on as Cubbie Group representatives jetted to Europe and quietly parted with about $3m in fees so that WGA would consider a loan. McGrathNicol yesterday stressed that the money paid to WGA was sourced externally; it did not come from within the Cubbie Group.

McGrathNicol's John Cronin, the deed administrator, said yesterday: "The administrators had concerns regarding WGA's bona fides, which they raised with the Cubbie board. At no time did the administrators approach or enter into negotiations with WGA."

By September last year the BBC in Britain had begun a major investigation into Ali and his businesses as a result of public notoriety over his pledge to purchase the Blackburn Rovers Football Club and fund it at a total cost of pound stg. 400m. Many long-suffering Blackburn Rovers fans were ecstatic, but after its investigation the BBC reported damningly that Ali had been forced to cease trading by authorities in Bahrain, had not paid thousands of pounds in rent, taxes and telephone charges in Britain, had never attended the London School of Economics as he claimed, did not come from a wealthy family with large landholdings in Hyderabad in India, and failed to file accounts for British and Canadian companies that were subsequently dissolved.

Prem Sikka, a professor of accounting at Essex University, who was commissioned by the BBC to examine the accounts of WGA in Bahrain, told the program: "My God, where do we begin? Firstly, it shows Mr Ali has a Midas touch. He managed to turn an investment of $53,000 in 2008 into $1.2bn at the end of 2009. On the face of it, it sounds incredible. When I penetrate a bit below the surface I find that a lot of information is not there or the figures are not really supported by the actual numbers."

Today, Ali has his sights set on Spain and another football club, Racing Santander. The financial details surrounding his newly achieved control of the club are murky. Spanish journalists are now asking hard questions.

If Investigator One has his way, it will soon be checkmate.