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First Solution: Deal is no deal

The collapse of First Solution at the end of June, owing 2million to 2,000 creditors, has had a devastating impact on the Bangladeshi community in Britain and caused huge hardship to many in Bangladesh. George Galloway and Respect have been in the forefront of the campaign to get justice for the creditors and all their money back. But so far, what's on offer is entirely unacceptable to the people who have lost money.

At the end of June 2007, First Solution Money Transfer Ltd collapsed owing 2,000 creditors around 2million. This was a business that grew from 4million turnover to almost £100 million turnover in just three years. It offered money transfer to Bangladesh cheaper, and quicker and to more outlying locations than its rivals. And it seemed to come with an impeccable pedigree. Aggressively and constantly promoted on Bengali TV in Britain, and particularly Channel S whose managing director, Dr Fozol Mahmood was the brains behind First Solution. He was very well connected to members of the British Bangladeshi political establishment, members of whom lent themselves to promoting the credibility of the business.


The collapse was devastating. Many of the poorest people in Britain had been sending small but vital sums of money to the poorest people n the world, their friends and family in Bangladesh, for vital operations, for family support and for weddings and other events. And there seemed no coherent explanation for the collapse. This was not a bank borrowing short term and lending long term on dodgy mortgages. It was simply transferring money from Britain to Bangladesh, taking from Peter and giving to Paul. The directors' various explanations for the collapse simply made no sense.




Azmal Hussain, the chair of Respect in Tower Hamlets, moved quickly to set up a creditors group which now boasts some 850 members owed over £1.3 million. He and local Respect MP George Galloway started to raise serious concerns about the collapse. As a result the government moved with unprecedented speed to sieze the books of the company in a dawn raid just one week after the company ceased trading. An investigation was launched by the Companies Investigation Branch of the Insolvency Service. Towards the end of July, George Galloway initiated a debate in the Commons with a minister Kitty Ussher in order to keep the pressure up. In August the Secretary of State for Business obtained a court order to place the company into official receivership, taking its liquidation away from an insolvency practitioner, Panos Eliades, with a colourful history.




All of this was very welcome. But from the beginning of August things went very quiet. Despite repeated emails from Azmal Hussain to the Official Receiver and Minister Stephen Timms, the government failed to keep him and the creditors who they were supposed to be representing and protecting informed of their plans to sell on the company and come to a deal with the company’s directors and agents. Moreover the government has washed its hands of providing any help to the creditors despite the fact it gave the Bangladesh £7 million in 2004 to encourage money transfer out of the informal sector and into the hands of companies like First Solution, whilst putting in place no financial security regulation. The contrast with Northern Rock could not be more stark. And a voluntary “charity” campaign set up by New Labour Baroness Uddin was closed after just one month with just £100 in the fund.




On 21st November the company, whose name had now been changed by the Official Receiver to XTL Ltd, was wound up in the high court. The receiver announced a deal whereby the assets of the company had been sold for £30,000 and another £415,000 was promised in a potentially legally enforceable deal with the directors and agents. Over a two year period, under the deal, creditors could get back up to 25p in the pound. However how much money the creditors will ever really see under this deal is as clear as mud. Azmal Hussein responded: "The First Solution deal is no deal. We want all our money back and we want the people who are responsible for this to be punished."




Azmal Hussain has called a meeting of all creditors for 1pm on Saturday 8th December at 49 Hanbury Street to discuss what to do next. George Galloway will be attending and addressing the meeting. This will be followed by a formal creditors’ meeting on Wednesday 19th December in the Conway Hall which will appoint a liquidator. What is clear is that creditors regard the deal concluded with the agents and directors as an insult and they and we will not rest until the creditors have not only got their money back but they have also got justice. And that means punishing those responsible for this debacle.




Watch this space!
 

News and articles of interest

Here are some articles and news reports we think are worth looking at

Gaza: The Real Terrorists - Stuart Littlewood
The patience of all decent men must surely be exhausted.
Today's slaughter of innocents in Gaza, with at least 230 reported killed in raids on "Hamas terror operatives" (as the Israeli military put it), amounted to "a mass execution", said Hamas.
Can there now be any doubt who the real terrorists are?
The killing spree couldn't have happened without the tacit approval of America, Britain and the EU. The political pea-brains that direct the pro-Israel western alliance were partying, gorging themselves on Christmas fare or binge-shopping while this massacre of hungry women and children and their despairing menfolk in Gaza was being planned and executed.

Stench of Death Hangs Over Gaza - Ola Attallah
With thick clouds of smoke billowing into the sky and dead bodies littering into the streets, a stench of death rose from the ruins of the Gaza Strip on Saturday, December 27.
"Where are my sons?" screamed Um Ibrahim as she ran hysterically looking for her little kids.
She lives near a security compound Israeli planes pounded to the ground on Saturday.
"I don't know what happened to them," cried the bereaved mother.
Her neighbor Um Abed fell unconscious when she saw her son among the dead in the attacks.
At least 206 Palestinians were killed in massive Israeli air strikes in the Gaza Strip on Saturday.
"The number of victims has reached 195 martyrs with more than 300 wounded, 120 of whom are critically hurt," said Moawiya Hassanein, the head of Gaza emergency services.
"The toll has gone up because of new Israeli raids and the discovery of several martyrs under the rubble."

Gaza massacres must spur us to action - Ali Abunimah
"I will play music and celebrate what the Israeli air force is doing." Those were the words, spoken on Al Jazeera today by Ofer Shmerling, an Israeli civil defense official in the Sderot area adjacent to Gaza, as images of Israel's latest massacres were broadcast around the world.
A short time earlier, US-supplied Israeli F-16 warplanes and Apache helicopters dropped over 100 bombs on dozens of locations in the Israeli-occupied Gaza Strip killing at least 195 persons and injuring hundreds more. Many of these locations were police stations located, like police stations the world over, in the middle of civilian areas. The US government was one of the first to offer its support for Israel's attacks, and others will follow.

Face to face with the Taliban - Ghaith Abdul Ahad
Qomendan Hemmet sat cross-legged under a window of the mud-walled room. His shoulder, sunk in an old military jacket, rested against the wall and a radio antenna stuck out of his pocket. Next to him sat his deputy, wrapped in a big blanket, silent and sleepy. Around the room sat his men, their faces contorted by years of fighting and poverty, dressed in shalwar kameez and magazine pouches, eyes dark as the kohl lining them. Radios crackled, phones rang non-stop, and more fighters came, drank tea and left with orders.
"Salar is the new Falluja," declared Qomendan Hemmet emphatically. "The Americans and the Afghan army control the highway, and five metres on each side. The rest is our territory."

Communication Workers Union vows to fight any privatisation - Christine Buckley
The main postal union gave warning yesterday that it would fight any move to partly privatise Royal Mail as expectations grow that the organisation is facing a huge shake-up.
This week the Government is expected to publish an independent report that it commissioned into the postal service which will pave the way for an overhaul of Royal Mail.

Free Bush shoe-thrower, Iraqis urge - Aljazeera.net
Thousands of Iraqis have demonstrated in Baghdad's Sadr City in support of a journalist being held in custody after throwing his shoes at George Bush, the US president.
Muntazer al-Zaidi was detained for what the Iraqi government on Monday said was a "barbaric and ignominious act" during a news conference the previous day.