Foreigner spilled the beans

Afraid of safety, he detailed in Singapore Koko's bribery scam

A five-page statement by a foreign national gave the Anti-Corruption Commission (ACC) the leads needed to start uncovering corruption of Khaleda Zia's younger son Arafat Rahman Koko.

The foreigner who introduced himself as “a chartered secretary…married with two children” helped the anti-graft body on condition that his identity would be kept secret and safety ensured.

He also said, “I'm not willing to go to Bangladesh to testify against anyone for fear of my personal safety”.

On this understanding, the ACC sent an official to Singapore to explore all official procedures to get at the graft.

Investigation in the following days yielded that China Harbour Engineering had transferred huge sums to Koko's account with the Singapore branch of French bank Credit Industrial et Commercial.

Close on the heels of this scandal came another sensational story of Koko's bribery. As the global media got abuzz with stories how Siemens had been involved in bribery in countries across the world, Koko's name came up in the Bangladesh part.

The BNP chief's son received $1,80,000 (Tk1.26 crore) as bribe in September 2005 for helping Siemens Bangladesh, local subsidiary of German based multinational company Siemens AG, to win a telecom contract.

The kickbacks from Siemens were deposited in the same account that had the money from China Harbour.

When Koko complained that he had not received the money as promised, an additional amount was transferred to his account in Singapore. In return, he assured Siemens Bangladesh of earning them the contract to set up mobile network for state-run operator TeleTalk.

The Singapore authorities eventually froze the account where Koko had Tk11.46.

The 161-year-old conglomerate with activities ranging from nuclear power stations to trains and light bulbs has acknowledged that up to 1.3 billion euros may have been used illegally to win foreign contracts

From the mid-1990s until last year, units of the company paid kickbacks and bribes to win contracts from Iraq's government in the United Nations oil-for-food programme and for projects including commuter rail in Venezuela, mobile phone networks in Bangladesh, power plants in Israel and traffic-control systems in Russia, Bloomberg reports.

German industrial giant Siemens agreed to pay nearly one billion euros ($1.4 billion) to US and German authorities on Monday to settle a sprawling corruption scandal that also involves allegations of bribing public officials in Bangladesh.

When the global media are roaring over the scandal the New York Times reported (December 21) that, “MR SIEKACZEK's telecommunication unit was awash in easy money. It paid $5million in bribes to win a mobile phone contract in Bangladesh, to the son of the prime minister at the time and other senior officials,” according to court report.

The Debevoise internal investigation and the Department's investigation also revealed evidence of corrupt and improperly recorded payments with a strong nexus to the US by two Siemens subsidiaries, Siemens Venezuela and Siemens Bangladesh, as well as evidence of improperly recorded payments with respect to an additional subsidiary, Siemens Argentina.

Meanwhile, the US district court for the District of Columbia in its department's sentencing memorandum explained the Siemens corruption in Bangladesh.

It says that between 2000 and 2002, the Bangladesh Telegraph and Telephone Board (the "BTTB"), state-owned telecommunications regulatory entity, conducted three open tenders for a mobile telephone project that was ultimately awarded to Siemens.

In the first tender, Siemens was excluded for technical non-compliance. The tender was cancelled anyway.

The second tender in 2001 was cancelled as well. Following a change of government that year, BTTB floated the third tender that initially saw Siemens disqualified from the bidding. But later in partnership with Siemens Bangladesh and Siemens Mobile Communications S.p.A. (then a Siemens subsidiary located in Milan, Italy), it ultimately won part of that tender in June 2004, the court said.

Siemens' and its subsidiaries' portion of the contract value was $40,887,000. From May 2001 to August 2006, Siemens Bangladesh, which was responsible for the local operations of the project, engaged or caused to be engaged purported business consultants to bribe various Bangladeshi officials in exchange for favorable treatment during the bidding process.

It had to pay at least $5,319,839.83 to the purported business consultants. It caused at least one payment to be made to each of these purported consultants from a United States bank account, and the remaining payments to be made through payment intermediaries, the US court said.

Siemens Bangladesh knew that the purported business consultants were passing along some or all of the money they received from Siemens Bangladesh to senior Bangladeshi government officials in exchange for favorable treatment of Siemens AG in the BTTB Project bid process.

In September 2004, Siemens Bangladesh learned that one of the purported business consultants had moved to the US, after which Siemens Bangladesh continued to cause him to be paid purported consulting fees to an account in Hong Kong.

In 2003, Siemens Bangladesh paid at least $16,000 directly to Bangladeshi government officials or their relatives.

Siemens Bangladesh caused these payments to be improperly recorded on Siemens' books and records as “consulting fees” and other seemingly legitimate payments, according to the court report.

Meanwhile, ZASZ is a Singapore based owing company of Koko. And a Singaporean Citizen also jointly owned the bank account of Koko. But Koko had also authorisation for withdrawing money alone.

The foreign citizen who provided primary information told the ACC that ZASZ was incorporated sometime in April 2004. He was introduced to Arafat Rahman by an official from Singapore-based QC Shipping.

The official told him that Arafat wanted to set up a company in Singapore and whether he [the foreigner] would like to help him in incorporation of the company.

The QC official also said that Arafat, unlike his brother, is not involved in politics, and is very sincere about business.

After meeting Koko, the foreigner helped incorporate ZASZ on April 10, 2004 online.