Unsuspecting Investors Swindled Out of Millions By Rifthi Ali

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“I became a patient and fell into a debt trap as a result of investing my money with Privelth Global which claimed to be functioning based on Islamic Principles,” said Aliyar Farzana, a 40-year-old woman from Maruthamunai village in the Ampara District.

Farzana, a middle-aged woman, comes from a very poor family, runs a small grocery shop attached to her house and engages in manual weaving to run her family. She is the mother of three children and lives in a very small house with many difficulties.

Farzana’s husband worked in Qatar as a labourer for 10 years and managed to save some money with a dream of constructing a decent house for the struggling family. Hard working Farzana also contributed from her side to make this dream a reality through her weaving and running her home-based grocery. Together, this lovely couple struggled to save Rs 4.5 million for this purpose.

The Sammanthurai branch officials of the Privelth Global got to know of this savings accumulation through a relative of Farzana and requested her to invest this money in their company.

“The officials of this company came to my doorstep many times and talked with me very sweetly to make a decision to invest my money with their company” Farzana said.

“Initially, my family and I were not interested in this proposal. But, the officials reiterated that they will provide profit which is purely based on Islamic Sharia, there is no interest in it and their company is safer than banks. After this I deposited my money in their company during January 2019,” she added.

She also said that she signed the contract which was drafted in English even without understanding the clauses as she trusted the agents of this company. The company deposited a monthly profit payment of Rupees 80,000 to her bank account until November 2019.

As a result of this new income source, Farzana joined a monthly chit fund scheme of Rupees 60,000 along with her neighbours. As luck was on her side, she was able to get the total chit fund in October 2019.

Forced to mortgage my land

The total amount of chit fund was Rupees three million and Farzana duly invested this amount with Kalmunai Branch of Privelth Global for the annual profit rate of 23 per cent. Even after 11 months passed, no profit from this investment was made to Farzana.

“I turned into a debtor because of this cheating. I was always worrying about completing the chit fund I joined. Because of this stress I became a patient. I returned from the hospital recently”, weeping, Farzana said.

“Last few months I managed to pay the chit fund instalments by selling the remaining jewellery. Now, I don’t have any means to pay the chit fund. I become very scared whenever the end of the month nears. I decided to get a loan by mortgaging the land on which my house is built” Farzana said.

Our investigative journalist team managed to find out that the company managed to collect around 170 crores through making 1,400 agreements with investors like Farzana. 90% of the investors are from the Eastern Province, in addition to them, people from Anuradhapura, Colombo and Gampaha Districts also invested their hard-earned money with this company.

The Privelth Global (Pvt) Ltd. was established on 5 February 2014. As per the records available at the Department of the Registrar of Companies, a 45 years old Ahamed Shereem Mohamed Shihab alias Shiham Shereeb from Colombo 5 and his wife Fathima Farzana Markar, a 39 years old woman from Mount Lavinia mentioned as the founding directors of this company.

Company expanded its business rapidly

The company expanded its business activities to Eastern Province on 1 July 2016. Within a period of 15 months, the company managed to open five new branches in Sammanthurai, Kalmunai, Pottuvil, Eravur and Maruthamunai.

There were 80 permanent employees working in these five branches. The salary range of these employees starting from Rupees 30,000 to 190,000 rupees, an official of this company shared these details with us.

There are different designations and benefits given to these employees in addition, 2% – 10% of commission also given to them based on the money invested by customers, he mentioned.

The investments to this company were made based on Vakkala, an Islamic Financial Contracting Principle. Vakkalais an Arabic term which used to describe the contract based on sharing the profit and loss of the investment.

The contract stipulates that investors must be prepared to accept profits and losses. The company provided profit with the annual profit rates ranging from 18% to 25%.We found out that the annual profit rates and employee commissions for attracting investments were varied among branches and persons.

People who made fixed deposits for 12 months and 6 months were given profits by using the same annual profit rate. The investors stated that Privelth Global stopped profit payments from September 2019.

M.I.M. Vakeel, one of the investors from Sainthamaruthu pointed out that the investors did not get back their investment even after the maturity period.

Meanwhile, Shihab Shereem was appointed as the Director of Hajara Travels (Pvt.) Ltd. on 3rd November 2015 in order to re-establish this travels which had been facing severe losses in the past. Subsequently, the Executive Director of Hajara Travels (Pvt.) Ltd., Alavy Salih Moulana (Murshi) was appointed as the Sharia Consultant of the Privelth Global (Pvt.) Ltd.

Be that as it may, a person who worked in Privelth Global said that “As per Shihab Shereem, Hajara Travels is a sister company of Privelth Global and he invested millions of money in this company”.

However, Alavi Mounlana, completely refuted this claim and stated that “I borrowed 6 million rupees from Shihab Shereem and despite my own difficulties, I managed to repay 60% of this debt. In addition, I never canvassed any person to invest in that company”.

At the same time, some amendments were adopted to the Articles of Association of the Company through a special resolution passed during the General Meeting of the Company conducted on 25 August 2019.

These new amendments to the articles of association allowed the company to engage in investment activities, both onshore and offshore, in real estate, brokerage services, rice production and garment factories.

Interestingly, Ashraff Bahja Jawath Ahamed from Texas, USA and Mohamed Niyas Ishak Al-Hatheeb from Amman, Jordan joined as new shareholders of Privelth Global on the same day in which the articles of association were amended.

“These two persons were taken on board to the Privelth Global (Pvt.) Ltd. as share holders with the purpose of returning the funds invested by the customers”. Shihab Shareem, the Director of Privelth Global said on 8 October 2020

Shareem accuses CBSL

He further accused that the Central Bank stopped the flow of 16 million US dollars to the country because of the joining of these two persons as partners.

The director stated that the money deposited by customers were invested in businesses related to pharmaceuticals, garments, printing industry, vehicle sales and rice production. However, he did not disclose the names of companies to which these investments were made.

However, the Central Bank commenced investigations on Privelth Global, a high official of CBSL said. The official stated that disclosing further details to the media may affect the investigation process.

Our investigative reporting found out that the five bank accounts from which the cheques issued to the depositors are closed at present. The depositors made complaints to the Police and the Kalmunai Magistrate Courts issued arrest warrants against the directors of Privelth Global as a result of these complaints. Foreign travel restrictions were also imposed on them.

A depositor made a complaint against this Company to CBSL. The CBSL replied that “Privelth Global Company did not register under any relevant Financial acts such as Bank Act, No. 30 of 1988, Finance Business Act, No. 42 of 2011, Finance Leasing Act, No. 56 of 2000 and Micro Finance Act, No. 6 of 2016. As the company made transactions based contracts, it is feasible to take legal action against this company”.

source : https://ceylontoday.lk/

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