During a Friday night curry in Brick Lane, Shoreditch, Ted Jeory was approached by the restaurant owner, who had recognised him as a journalist. He told Jeory of local people’s money being lost during transfer to their homes in Bangladesh. He said agents of First Solution Money Transfer had promised that the wages, which had been sent home for migrants’ children, would arrive within five days. Six weeks later, nothing had arrived.
That weekend, Jeory met local MP George Galloway’s assistant and was introduced to people who said they were afraid they had lost thousands. They showed contracts and remittance advices they had signed months ago.
‘I went to one of First Solution’s competitors in Brick Lane, pretending to be a potential customer. They told me they banked at least £50,000 a day, but that FS was way bigger,’said Jeory. ‘This was no tinpot business. I tracked down one of the directors and he told me he’d resigned as a director of FS ‘a couple of weeks ago’and that he knew nothing of the problems.
‘I later asked Companies House to send me a copy of his director resignation form. They only received the resignation by fax after my call to him, but it had been backdated.”
Jeory spoke to the lawyer of one of the company directors about what he knew. The lawyer ‘very carefully’told him that the company was ‘viable’but that it had been having ‘cash flow problems’because some of the agents in FS’s 40-strong network had not been passing on deposits.
‘I asked him why it was still accepting customers’ deposits without warning. Wasn’t that illegal trading? He gulped and said he was not aware that it was taking place. That’s when the alarm bells started ringing. I raced down to Brick Lane and got the restaurant owner to arrange a transaction with FS right then, so I’d have proof of possible illegal trading.
‘One of his workers handed over £100 to FS, came out and gave me the receipt, told me there had been no warning of any risks.
‘I then went straight into the FS office and said I was a journalist and I was aware they’d just made a transaction despite the company having problems. They told me they’d had no instructions or warnings from head office to do otherwise.”
As Jeory was debating how to run the story, the FS lawyer called to tell him an order had been put out to all agents to cease trading immediately.
‘We’d hit the jackpot. We changed our splash, but decided to hold fire on the fine detail for a special report the following week, including the heartbreaking tale of one man who had remortgaged his home and sent £70,000 back to Bangladesh to build a new house, ready for his return. He’s now suffering a nervous breakdown.
‘The British Bangladeshi community is furious. Locals are also demanding to know why a ‘dodgy’ company was allowed to set up its headquarters at the London Muslim Centre.”
Since it broke the story, the Advertiser has run a major story on the scandal every week for six weeks.
The Government and the police have started a fraud investigation, and a rescue package, similar to that set up to help the victims of Christmas hamper firm Farepak, has been launched to help creditors. The Central Bank of Bangladesh has also called for a fraud probe.
It turned out that FS had grown from nothing to a company with a turnover of £87m in less than three years. Inter-company loans that it made to sister companies remain unexplained.