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Arafat Rahman Koko: Khaleda Zia’s worthy son

25 Jun 2014

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On August 27, 2013 the Anti-Corruption Commission (ACC) of Bangladesh brought back Tk 7.4 crore siphoned off to Singapore by Arafat Rahman Koko, second son of BNP Chairperson and former Prime Minister Khaleda Zia.

 ACC received this money on August 13 as the second installment. Earlier, on November 22, 2012 the ACC received from Singapore the first installment Tk 13.6 crore which was also laundered by him.

Arafat Rahman Koko has been sentenced in absentia by a Dhaka court on June 23, 2011 to six years’ rigorous imprisonment and fined Tk 38.83 crore for laundering over Tk 20 crore in Singapore. The ACC filed the money laundering case against Koko on March 17, 2009.

Koko had received Tk 19.71 crore in bribe from German telecom giant Siemens and Chinese engineering firm China Harbour Ltd to win them telecom and terminal building contracts taking advantage of his mother’s position as Prime Minister. Koko later siphoned the money off to Singapore.

German telecom and IT giant Siemens agreed to pay US $ 1.6 billion fine to the US and German governments to settle a number of bribery charges. Out of this huge amount, Siemens Bangladesh was to pay US $ 500,000 to the US government to settle charges that in 2004 it bribed Koko. At around the same time, Singapore government announced its decision to freeze Koko’s assets in Singapore amounting to Tk 11, 66, 00,000.

 

With the help of Singapore government, ACC came to know that Koko had 20.61 lakh Singaporean dollars and 2.61 lakh US dollars in a Singapore bank account. The money was part of the kick back received by Koko from Siemens. ACC revealed this information on December 18, 2008.

 

ACC further revealed that in Singapore, Koko owned a trading firm named ZASZ Trading and Consulting Pvt Ltd jointly with a Singapore national, Lim Siew Cheng, who was Koko’s paid service agent. Koko registered the firm in Singapore with the help of a few associates and the Singaporean service agent on April 14, 2004. Non-resident foreigners cannot open any company in Singapore and has to have a Singapore national for this purpose. The whole amount received by Koko as bribe was deposited in his joint account with his Singapore based partner.

 

Soon after the army-backed caretaker government launched anti-corruption drive in Bangladesh in January 2007, Koko transferred 20.13 lakh Singaporean dollars  to an account with the Singapore branch of French bank Credit Industriel et Commercial from the ZASZ joint account. Later, Singapore government froze ZASZ bank account and sent necessary documents to the ACC prompting it to initiate legal procedures against Koko.

On January 2, 2011 a Singapore court fined Lim Siew Cheng, Koko’s business partner in Singapore, for keeping Koko\'s money in his account. The Straits Times, an English language daily in the island state, reported that the court fined Cheng $900,677 for having Koko\'s $317,000 transferred to his account and holding on to it on Koko\'s advice.

Charges leveled against Koko :

Much before the Awami League-led government came to power, the ACC sued Koko on March 17, 2009, for taking money illegally from  Chinese firm China Harbour Engineering Company, German IT giant Siemens, and other sources in exchange for helping them get government contracts by utilizing his clout as the Prime Minister’s son.

Charging Koko of money laundering, the ACC case pinpointed his illegal dealings with China Harbour in relation to a Tk 351 crore contract for constructing New Mooring Container Terminal at Chittagong Port, and with Siemens in relation to a Tk 239 crore contract for equipment supply and set up of a mobile phone service named Teletalk.

Some other persons deposited additional money in Koko\'s two of the four Singapore bank accounts detected by ACC. Three of his accounts were with United Overseas Bank (UOB), and the other was with CIC Bank.

"The allegation that Arafat Rahman Koko illegally sent abroad 28, 84,603.15 Singaporean dollars and 9, 32,672.81 US dollars to hide his illegally earned money and his illegal source of income has been primarily proven” ACC said in the case.

It added that Koko obtained 2.58 million Singaporean dollars from China Harbour in three installments on May 6, May 31, and August 1 of 2005. Koko also received 3.03 lakh Singaporean dollars from Siemens on October 6, 2005.

These payments totaling 2.8 million Singaporean dollars were deposited in the account number 1093101397 of United Overseas Bank (UOB) for account holder ZASZ Trading and Consulting Pte Ltd with an address of 9, Changy South Street of Singapore. Koko and his Singapore based partner Lim Siew Cheng jointly owned this company.

China Harbour Limited


China Harbour was awarded a contract to construct New Mooring Container Terminal in Chittagong Port through a competitive tender on January 29, 2004 with a budget of Tk 351.41 crore. When the tender was floated by the Chittagong Port Authority (CPA) in mid 2003, China Harbour quoted Tk 331.41 crore for the job, and got it. But when the company was asked to sign the contract, China Harbour proposed a budgetary increase of Tk 25.64 crore. This "value engineering proposal" and relevant correspondence of China Harbour were then incorporated in the agreement with the Chinese company. The Cabinet\'s purchase committee then approved the proposal.

 

ACC in its investigation found that China Harbour employed retired Brig Gen Md Zillur Rahman as its local agent on November 26, 2001.When the tendering process was at its final stage in 2003, and China Harbour was sure to get the job, Koko put undue pressure on Brig Gen Zillur Rahman to arrange a commission of Tk 19 crore. Koko said Zillur Rahman would get Tk 3.5 crore as his commission, but he must let one AKM Musa draw the remaining commission from China Harbour. Koko then compelled Zillur Rahman to sign a memorandum of understanding (MoU) with China Harbour on January 13, 2004 stating that the remaining commission money would be given to Musa.

 

The MoU indicates that the total commission through the revised budget for construction of the container terminal was Tk 19 crore. Of the amount, China Harbour itself kept 8.5 percent, China Harbour company officials received Tk 60 lakh, Zillur Rahman got Tk 3.5 crore, and Musa the remaining Tk 13.28 crore.  According to ACC a large part of this money landed in Koko\'s account in Singapore.

SIEMENS


Siemens was awarded a Tk 239.39 crore job to supply, install, test, and commission the equipment required to launch Teletalk, a mobile telephone company, on April 27, 2004. The tender for this job was floated in August 2002.

Siemens Bangladesh local consultant Md Zulfikar Ali told ACC that Koko compelled Siemens to give him US $180,000. This money was transacted through Ali\'s Singapore Standard Chartered Bank account to Arafat\'s account in UOB under the name of ZASZ Trading and Consultant. This money was converted into 3.03 lakh Singaporean dollars.

 

Koko’s corruption story on FBI website:

 

Federal Bureau of Investigation (FBI) website http://www.fbi.gov/washingtondc/press-releases/2009/wfo010909.htm had put up the corruption story of Koko. The FBI website put the detail story of the bribery as the US Department of Justice sought to recover US dollars three million from the foreign bribe payments deposited to Koko\'s joint account in Singapore. The FBI conducted detailed investigation into the bribery through federal agencies to recover the money because those were paid in US dollars involving American intermediary banks and it went in line with its policies to \'internationalize efforts against kleptocracy\' to fight high level corruption around the world.

 

According to the FBI website, the US Justice Department filed a forfeiture action against Koko\'s accounts worth nearly three million dollars that are believed to be the proceeds of a wide ranging plan to favour two foreign companies to secure deals and earn commissions from two separate public sector projects. FBI said the forfeiture complaint relates primarily to bribes paid to Koko in connection with projects awarded to German Siemens and China Harbor Engineering Company.

Most of the funds in Koko\'s Singapore bank account were traceable to bribes received in connection with the China Harbor project, which was a project to build New Mooring container terminal at Chittagong port. German IT giant Siemens and three of its subsidiaries pleaded guilty on December 15, 2009, to violations of and charges related to the Foreign Corrupt Practices Act (FCPA).

Siemens Bangladesh admitted that from May 2001 to August 2006, it caused corrupt payments of US$ 5,319,839 to be made through purported business consultants to various Bangladeshi officials in exchange for favorable treatment during the bidding process on the mobile telephone project. At least one payment to each of these purported consultants was paid from a US bank account, the FBI website reads.

According to the forfeiture complaint, the bribe payments from Siemens and China Harbor Engineering Company were made in US dollars, and the illicit funds flowed through financial institutions in the US before they were deposited in Koko’s and his business partner\'s accounts in Singapore, thereby subjecting them to US jurisdiction.

Before the FBI website uploading of Koko\'s corruption story, Koko earned a dubious distinction of finding a place in the World Bank publication named Asset Recovery Handbook. World Bank- United Nations Office on Drugs and Crime (UNODC) publication also mentioned the embezzlement of three million US dollars by Koko as an example of stealing national assets. Titled "Asset Recovery Handbook," the publication was released in Vienna. It was prepared under the Stolen Asset Recovery Initiative of the World Bank in association with UNODC.

BNP Chairperson and former Prime Minister Khaleda Zia, put in a highly embarrassing situation following  international exposure of her younger son Koko’s involvement in rampant corrupt practices, has been seeking to mislead the people by creating a smoke-screen, stating that Koko is innocent and charges against him are an act of political vendetta by the ruling Awami League-led government. She has also been seeking to divert people’s attention by demanding trial of former Army chief General Moeen U Ahmed (now in the US) who was the main force behind the last Caretaker Government and whose initiatives had led to disclosures about Koko’s ill-gotten wealth stashed abroad.

Koko continues to remain a fugitive and has been living in Malaysia, where he fled from Thailand, a place he was allowed to stay for medical treatment. He was arrested on September 2, 2007 and released on parole for treatment in Bangkok on July 17, 2008. His parole was cancelled on August 19, 2010 and he was asked to return home immediately to face money laundering charges, but he chose to abscond.




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