Africa-Press – Malawi. Local businessman Zubair Osman Gani Issa, who owns Victoria Forex Bureau, allegedly runs an illegal bank for the Asian community in Malawi known as Zubair OG Bank which among others transfers money from Malawi to other countries and cleans money obtained illegally.
The revelations have been made in a report published yesterday by the Platform for Investigative Journalism (PIJ). Speaking to PIJ, UK-based Pakistani national Max Pathan said he was depositing money with Zubair OG Bank between 2011 and 2016.
Pathan told PIJ that to open account, a person approaches Zubair OG and once the request is approved, the accountholder can deposit the money either within Malawi or abroad.
In Malawi, Victoria Forex Bureau branches are used as collection and drop off points for the bank which accepts all major currencies. He added that the bank charges between 3 and 15 percent depending on the services which include money laundering, safekeeping and transfers to countries such as Hong Kong, South Africa and United Kingdom.
“According to Pathan, OG Bank charges 10 to 15 per cent to convert black money to white money. Black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes. Black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed. Recipients of black money must hide it, spend it only in the underground economy, or attempt to give it the appearance of legitimacy through money laundering”, reports PIJ.
According to Pathan, when a transaction, either withdrawal or deposit, is made there is no receipt given except for confirmation on WhatsApp chat but account statements are provided for bigger customers.
He added during his time as a customer of the bank, he was getting these updates from Zubair OG or his nephew Mr Mohammed OG. Pathan told PIJ that he was using the account to receive from his debtors in Malawi, who were paying in either local or foreign currency.
“Mr Zubair OG has been using the forex bureau to pull out millions of cash US dollars from local banks and cover his illicit transfers helping his clients to buy properties in the UK, Dubai, Pakistan, Hong Kong and China and bring in goods to Malawi at low value to avoid paying customs and duties,” Pathan told PIJ.
Zakir Mussa, another Asian businessperson who used to live in Malawi but is now based in the UK, alleges that that Osman swindled him in excess of K3 billion through the bank. Mussa has dragged Osman to the Malawi High Court and to the Business and Property Courts in Birmingham in the United Kingdom over the alleged fraud.
According to submissions filed by Zakir Mussa’s lawyer and quoted by the PIJ, Mussa between 2015 and 2019 loaned money (with interest, in excess of £1.5 million) to two Malawian brothers, Moshin and Mahomed Mussa. The two Mussa brothers run companies Mussa Nurmahomed and Phazi Industries. Zakir Mussa was lending the money to the two through Zubair OG/Victoria Forex Bureau where Zakir Mussa held a British Pounds Account.
“For every payment, both Mr Zubair OG and Mr Muhammed and Mr Moshin Mussa of Mussa Nurmuhommed/Phazi Industries Ltd would confirm on the spot. As for paying their monthly interest dues, they would deliver cash USD to Victoria Forex Bureau or, if it was GBP Sterling, Mr Zubair OG would give his clients UK bank account details,” said Zakir Mussa.
He added that the two Mussas refused to repay the money he lent to them claiming that they received no payments from Osman or Victoria Forex Bureau. In court, Mussa has submitted copies of WhatsApp chats between himself and Osman, in some of which Mussa was giving instructions to Osman to release funds to his lenders in Malawi or to update his OG Bank account.
Mussa was also sending deposit slips based on deposits made in Osman’s Barclays UK account and Osman was also confirming receipt of the funds. However, through his lawyer Lusungu Gondwe of Ritz Attorney’s, Osman has claimed that Zakir Mussa used to be his employee in Malawi and that in the UK Mussa was working in a low paying job hence has no capacity to led huge amounts of money to people.
“His business filings/returns at Companies House in the United Kingdom do not project Mr Mussa as a man of any or any valuable means. Our client notes that from the evidence he has and knows about him, Mr Mussa is a pauper who wants to attack successful business people extortionately,” said Gondwe in his response to PIJ questionnaire.
However, Mussa claimed that it was actually Osman’s brother Hanif Osman Gani Issa who offered Mussa a 50 percent partnership in running his two business branches, Consumer Electronics and Victoria Forex Bureau Ltd in December 2004. According to Mussa, he only met Osman six months before he left Malawi to settle in the UK.
Speaking to the PIJ, a senior manager at National Bank of Malawi said the bank has in the past reported Victoria Forex Bureau to Reserve Bank of Malawi (RBM) and the Financial Intelligence Authority (FIA) due to its suspicious deposits.
“They often deposit around K400 million on a daily basis, but the source of the funds is inexplicable,” the bank manager said.
In response to a PIJ inquiry, FIA compliance and public relations manager Masautso Ebere said the authority is not aware of any bank that is operating without a licence in Malawi.
“Licencing of the banking sector in Malawi is under the mandate of the Registrar of Financial Institutions. The mandate of the FIA is derived from the Financial Crimes Act, with a core function to receive and analyse financial information and disseminate financial intelligence to relevant competent authorities. The FIA does not operate outside this mandate,” Ebere said.
He also claimed that investigating any abuse of a licence by a regulated entity is outside FIA’s mandate. Also speaking to PIJ, Reserve Bank of Malawi spokesperson Davie Ndege said the bank only knew about the existence of the illegal on or around 5th July 2022.
“RBM was indeed tipped on the alleged illegal operations relating to Victoria Forex Bureau Ltd and/or alleged illegal trading in forex by Malawian Asian businesses. RBM together with other Law Enforcement Agencies will investigate the allegations and may take action depending on the outcome of the investigation,” Ndege said.
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