Malik Riaz has pulled another rabbit out of his Bahria hat. As the Abu Dhabi Group backs out of the $45 billion deal that never existed in the first place — enter Thomas Kramer.
Again, the same dazzling picture of the world class retreat, encompassing the world’s tallest building 3.5 km off the Karachi coast was painted. Only the protagonist of the fairy tale was changed from the Abu Dhabi Group to US investor Thomas Kramer. Geo TV quoted Bahria Town spokesman claiming that Kramer had committed $15 to 20 billion investment in developing “Bodha Island city,” which will have “Net City, Education City, Health City, Port City and other infrastructure projects.”
The spokesman claimed, “the worlds’ most modern shopping mall will also be built” and link Karachi to the Island through a six-lane bridge.
Interestingly, the same group had published news on Monday, quoting the same spokesman, who bragged about an investment of 15 to 20 billion ‘rupees.’ During the day, rupees turned into dollars. This goes without saying that the news was written by the same Editor of their Urdu daily who had authored the earlier ten such Bahria statements-turned-news. Bahria finds it more convenient to let its mega projects be announced through news instead of advertisements. We don’t know whether it costs the same or more but something fishy is going on here — yet again.
What is the real deal behind it? Who is putting in how much money? Is this project legal? What are Malik Riaz’s credentials to do the project that was advertised twice earlier? Is this another photo-up intended to fleece investors? Who will guarantee that the public will not be duped this time?
Bahria is yet to explain its earlier goof-up. Its advertisements to cover up in the name of “national interests,” and an explanation authored by the same Urdu newspaper Editor, were unconvincing. It sounded stupid that the whole deal got cancelled because of PML-N leader Chaudhary Nisar.
Bahria is yet to explain why it used the name of the Abu Dhabi Group as the partner where it had signed an MoU with a much smaller Dhabi Contracting, which only showed “interest” with no financial commitment. The same drama might be at play again.
Thomas Kramer, better known as TK, is being presented in the same glamourous way through carefully ‘leaked’ news. The project may not materialize in the declared 10 to 15 years (the timeframe has now been reduced to ten years) but will allow its promoter to fleece the public by the hype built around it. Bahria was fined by regulatory government organisations for fraudulent advertising and for receiving money in advance illegally before the commencement of the project. The new project has all the ingredients of a scam. Consider.
The very land on which this dream project is supposed to stand is shaky. Serious doubts exists how Bahria was given the Letter of Intent (LoI) for developing the island by Port Qasim Authority (PQA). Transparency International (TI) has filed serious objections repeatedly before the PQA Chairman, Vice Admiral (R) Muhammad Shafi. It’s only a matter of time that this issue will come before the courts as the whole deal smacks of — trust Malik Riaz — the shady maneuvering.
Transparentcy maintains that the whole tender was tailored to award the contract to Bahria Town, which should have been disqualified before being considered. Here’s why:
TI says Bahria could not be given the project as it was declared as “cheats and frauds” by three statuary and regulatory authorities -the Federal Tax Ombudsman (FTO), the Security and Exchange Commission of Pakistan (SECP) and the Lahore Development Authority.
Transparency quotes the State bank of Pakistan and the SECP which issued advertisements on February 23 warning that “the public should beware and not be misled by the fraudulent activities of deposit, loan, and investments through such advertisement.”
It took strong exception to the pre-qualification criterion adopted by the PQA despite 10 serious cases of default and litigation faced by Bahria Town. It mentions, among other things, the maximum fine imposed by the SECP against Bahria Town for “fraudulent practices” in the case of its housing scheme Margalla Enclave.
Bahria Town, it says, took advance money from investors illegally, besides the tax evasion of Rs 119 billion as mentioned by the FTO. The report lies with the FBR and may be taken up by the next government to recover this huge amount from Malik Riaz. May be!
Transparency mentions numerous cases where Malik Riaz was found involved in, to name a few, “corruption, black-mailing, extortion, land-grabbing, forgery, fabrication of evidence.”
Transparency mentions the helplessness of the State before Malik Riaz who kept one Tehsildar, namely, Imtiaz Pervez Janjua, posted in the same area since 1998.
So where does this leave the glamourous project? Frankly, it suits everybody. Malik Riaz got the island through dubious means and will not mind to give a huge stake to the American investors. Money will come from the public who are already being shown the dreamy image of the recreated Miami. The media story flashed on Monday shed light on the dazzling projects that Kramer had accomplished in Florida and how he turned around the pirates’ den across Cuba into one of the priciest real estate in the US. And why should Kramer not be interested. He gets a good deal — the island, the naive public dying to book an apartment in the dream world, the official approvals — for just showing up. The media is either complicit or silent. “Why the hell, not,” Kramer must have told all the detractors who may have pointed out to Bahria’s Abu Dhabi fiasco. The Abu Dhabi Group partly represented the UAE government with had huge stakes in Pakistan. It could not afford to be seen partners in a scam here.
Kramer has no such hang-ups. He is a venture capitalist who made his riches through people like Malik Riaz. Yes, a few hiccups exist: the project might not get through because of the legal constraints; the next government might not be so obliging to Malik Riaz; the courts might come after the Malik again; Malik Riaz might not have the money as he shows huge loss in his books; Malik Riaz might just use him for building the hype for his other projects; or Malik might just run away in the end.
But then, who cares. Kramer would make sure that Malik Riaz compensates him enough even if it turns out to be just a photo-op.
The good old TK had been accused of three bad things in the US: Illegal financing on election candidates for which he paid heavy fines after pleading guilty; gentrification, which basically means enriching the elite by pulverizing the lower strata of the society and, finally, yelling on TV.
He does have a lot in common with Malik Riaz. Investors beware.
Published on: thespokesman.pk
Dated: 11 March 2013