Calls in Malaysia to expand the new government’s anti-corruption campaign to the province of Sarawak, on the island of Borneo, are echoing across the Pacific to the small and insular commercial real estate community in Ottawa, Canada.
|Jamilah Taib and Andrew Leslie, MP for Orléans|
Abdul Taib Mahmud is a “politically exposed person” (PEP) as defined by Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR).
(This post is part of an ongoing series of investigative articles by La politica into Sakto Corporation and the Ottawa commercial real estate market. If you have any tips please email them to lapoliticaeslapolitica [at]gmail[dot]com. For related stories see: In Cozy Ottawa, Philanthropy Provides Good Cover for Sakto Corporation, and Lady Luck Keeps Shining on Ottawa's Sakto Corporation.)
Jamilah Taib started her career in real estate in Ottawa with a financial gift from her father. The amount of that gift has never been revealed, though Abdul Taib Mahmud, a career public servant of humble origins, has claimed that the source of the money was a gratuity from the federal government of Malaysia.
Abdul Taib Mahmud himself is a multi-billionaire. Given that his only income is as a public servant, there has been widespread speculation that the Sarawak governor is one of the world’s most accomplished kleptocrats, allegedly siphoning billions of dollars from the timber trade.
The Malaysian Anti-Corruption Commission (MACC) probed Taib’s wealth before the current prime minister, Pakatan Harapan, came to power. The investigation lapsed, largely due to lack of political will.
But now Kelvin Yii, a member of parliament in Bandar Kuching, Sarawak, is asking that the MACC release its findings. There have also been calls from numerous sources within Malaysia for Taib Mahmud to declare his assets. This follows on the unprecedented move on the part of the new Malaysian government to charge former Prime Minister Najib Razak with money laundering.
During Abdul Taib Mahmud’s multi-decade tenure, over 90% of the rainforest in Sarawak was decimated, with the local population left in poverty. Coincidentally, during this timeline Jamilah Taib and her Canadian husband, Sean Murray, also miraculously built a real estate empire in Canada and the United Kingdom worth many hundreds of millions of dollars.
|Jamilah Taib's father, Abdul Taib Mahmud, and his wife|
To this day the Ottawa socialites, who are active in political and philanthropic circles, sit atop a dizzying array of real estate assets, including Ridgeford Properties and W1 Developments in London, England.
To date, no rational explanation has been provided as to how a real estate juggernaut of this magnitude could have grown organically. However, a report by the Swiss NGO Bruno Manser Funds titled Safe Haven Canada has provided detailed evidence of close financial links of Sakto Corporation to Taib family interests.
The Canadian side of the story begins in 1983 – only two years after Abdul Taib Mahmud became first minister of Sarawak – when his daughter, the 23-year-old Jamilah Taib, at the time an unemployed student, incorporated Sakto Corporation. Jamilah Taib’s uncle Uncle Onn Bin Mahmud and two other family members were also registered shareholders. The purpose, as stated by Sean Murray to Paul Clarke of the Toronto Star, in June 2014, was “to acquire, develop and operate real estate.”
However, no clear explanation has been given by Sean Murray or Jamilah Taib as to where the acquisition funds originated from, or how much was invested in Sakto. Jamilah Taib told Kathrin May of the Ottawa Citizen in January, 1989, that all of Sakto’s shareholders were “from the Pacific Rim – Australia, Hong Kong and Malaysia – and rarely come to Ottawa – except the chairman who flies in from Malaysia twice a year for meetings.”
Wherever the funds came from, over the next few years they helped Sakto build an impressive portfolio, mostly in residential properties. Then, starting in the late 1980s, Sakto shifted gears to focus on commercial real estate, specifically the construction of four large buildings at Preston Square in Ottawa, which were completed in four phases between 1988 and 2007, for a cumulative value of over $146 million.
|Preston Square in Ottawa|
Sean Murray’s ambitions soon outgrew Ottawa. The real estate whiz kid was on the hunt for a more lucrative market, a place where big, incomprehensible investments would hardly raise an eyebrow. He found it in one of the most expensive places on the planet to set up shop. In 1996 Ridgeford Properties was established by Sean and his cousin Chris Murray in London, England, a city where vast fortunes are regularly laundered in an inflated, recession-proof real estate market.
But this jaw-dropping growth didn’t escape scrutiny. The media inquired as to Ridgeford’s ownership structure. The result was a story that changed – and still doesn’t add up.
First, Christopher Murray on his personal Wikipedia entry falsely stated that “Ridgeford is the sister company to the Murray family’s property company, Sakto Corporation, which started out in Ottawa”. He repeated this claim in an interview with Sarawak Report. However, Sakto isn’t and never was a “Murray family property”, insofar as the Murray family apparently neither invested money nor controlled the share structure of the firm.
On his blog, which has since been taken down, Sean Murray also claimed that Ridgeford was an autonomous Murray-owned business, writing that the UK enterprise was “owned by Sean Murray (Chairman) and Chris Murray (Managing Director)”. However, Ridgeford appears to have had limited capital investment on the part of the Murrays, despite their ownership claims.
Why this mysterious and contradictory story? Sean and Christopher’s fathers were brothers, and successful architects in Ottawa. But they didn’t have that kind of money. The simple answer appears to be that the majority-stake owners – whoever they are – would rather not be identified.
But bucketloads of money are coming from somewhere. Over the past two decades Ridgeford’s portfolio has exploded. It now includes the only “newbuild whole city-block development opportunity in Marylebone, W1.” The value of this 0.75 acre lot in downtown London is astronomical. It is mathematically impossible for it to have been financed by profits generated by Sakto’s investments in Ottawa.
|One of Ridgeford's developments: a full city block in London|
Just as difficult to explain is W1 Developments, which is now building a 50-storey tower in London. The company was founded in 2013, with Christopher Murray referring to himself as the sole founder and managing director.
Given that Sean and Christopher Murray have no independent access to such abundant sources of capital, and given Jamilah’s status as the eldest daughter of a PEP, it’s possible that the Murrays are fronting ownership for politically exposed “ghost” investors who are putting up the money and assuming a majority stake. This would make sense, given that Ridgeford Properties has received £17 million in unsecured loans from an offshore trust in the British Virgin Islands named Tess Investments Ltd.
|W1's golden "Principal Tower" dominates the London skyline|
This is, in fact, how the ownership of Sakto itself functions. Though Sean Murray is President and CEO, it is his wife Jamilah Taib who acts as Chairman, and who is the major shareholder and true owner. Ownership is a critical factor here, and it is why Jamilah Taib, as the daughter of a Politically Exposed Person, would be of interest to law enforcement officials investigating money laundering.
To date, efforts by the Canadian government, including law enforcement, have been stymied by the lack of cooperation from Malaysia: it’s clear that nothing will happen without movement on the part of Malaysian authorities. But now it also appears that Abdul Taib Mahmud and his family are about to lose their political cover. If Malaysia does act, Canadian law enforcement would then be in a position to investigate and potentially answer many questions with regard to the extent of the wealth transfer from Abdul Taib Mahmud to his daughter Jamilah.
In Canada and elsewhere, the law doesn’t allow for public access to the financial data of private corporations. As a result, a legal challenge by Bruno Manser Funds to seek financial records from RBC, TD Bank, Manulife Financial, and Deloitte – all of whom have done business with Sakto Corporation – was thrown out of an Ontario court in February of this year.
At the time, much was made of this decision by Sakto’s lawyer, Duncan Fraser of noticia LLP, who told the Financial Post that “foreign ‘vigilante citizens’ groups” (sic) are not allowed to “get access to private records where they don’t have evidence any crime was committed.”
However, the judge in his dismissal didn’t weigh in on the allegations themselves, which have not been tested in court – the decision only referenced the proposed disclosure order. The court challenge itself was odd, given that Abdul Taib Mahmud and his daughter Jamilah have not been found guilty of any crimes. But it did have one important purpose, in that it allowed Bruno Manser Funds to introduce hundreds of pages of evidence, which is now part of the public record.
And that record is devastating. It establishes how ludicrous it is to believe that Jamilah Taib – a graduate of Algonquin College of Applied Arts and Technology in Ottawa who, it would appear, has never been employed by anyone other than herself – could create a real estate corporation in a relatively short period of time that had sufficient assets to secure over $100 million in third party loans. These include $8.2 million from the Toronto Dominion Bank (1986), $20 million from the Royal Bank of Canada (1989-95), and $73 million from Manulife (since 2003).
Assuming that Sakto was initially financed by the PEP Abdul Taib Mahmud, as he himself has admitted, the question remains: how much money came to Canada to support his daughter’s real estate venture, and what was its origin?
To date, there has been limited action to ascertain whether or not profiteering off of environmental devastation and human suffering has helped fuel Sakto’s remarkable growth. But judging by the changes afoot in Malaysia, it looks like that may soon change.
(Got a tip? Email it to lapoliticaeslapolitica[at]gmail[dot]com)
Manulife has defended its loans to Sakto Group. In the report Safe Haven Canada, Stephen Sigurdson, Executive Vice-President & General Counsel, Manulife, stated in May, 2014 that:
“Our commitment to responsibility extends to all Anti-Money Laundering requirements, including those relating to Politically Exposed Foreign Persons. (...) We also check third parties in whom or with whom we invest against commercially available lists of Politically Exposed Foreign Persons (PEFP). Those on the list appear not for any wrongdoing, but affirmative matches require a higher level of due diligence and confirmation, which becomes part of the investment evaluation process.”
A year later in March, 2015, Mr. Sigurdson further stated:
“Various public reports…indicate that you have referred the Taib family to law enforcement entities for investigation. They will have investigative tools at their [hands] that are not available to entities such as Bruno Manser Fonds and Manulife. I respectfully suggest your concerns [be] handled by law enforcement.”
However, as of June 17, 2017, things have changed. The Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR) have put in place much higher expectations when it comes to monitoring high risk clients such as the family members of politically exposed persons.
The Canadian government has made it clear that it’s fully aware of how family members are used for the purposes of money laundering. Below is an excerpt from the Regulations:
It is critical to consider family members or close associates of PEPs and HIOs as part of your PCMLTFA obligations. It is an established trend that criminals carrying out, or directing, criminal activity will distance themselves from the proceeds of that crime as much as possible until they have laundered the money. FINTRAC [e.g. Financial Transactions and Reports Analysis Centre of Canada] has observed that many criminals rely on family members or other personal relationships to conduct transactions on their behalf in order to create this distance until they can establish a safe way to spend these assets.
As well, the Regulations make it clear that:
On a periodic basis you must take reasonable measures to determine if an existing account holder is a foreign PEP, a domestic PEP, a HIO, a family member of one of these people, or a close associate of a foreign PEP.
Which is to say that Jamilah Taib is on the radar as never before. According to the PCMLTFR, “Foreign PEPs, their family members and their close associates must automatically be treated as high-risk clients.” Jamilah Taib and Sakto Corporation are therefore now subject to the policies and procedures for high-risk clients, including a risk assessment.
PCMLTFA obligations are also clear that, when dealing with the family member of a PEP, measures need to be taken to establish the source of the funds deposited or expected to be deposited into an account. Senior management approval is also required in order to keep an account open.
As well, the PCMLTFR regulations now flag electronic fun transfers (EFTs) of $100,000 or more. In effect, FINTRAC requires that all EFTs of $100,000 or more to or from Jamilah Taib, or entities controlled by her, are to be monitored. That said, it’s unclear whether or not her husband, Sean Murray, or other members of the Murray family, would be considered high risk clients and subject to the Regulations.