First Solution Money Transfer

First Solution Money Transfer was a UK-based private limited company which provided a money transfer service, providing expatriates the facilities to transfer money back to their family in Bangladesh.

In June 2007, the company went into liquidation owing nearly GB£2 million pounds to the public, the majority of whom were from the Sylhet region of Bangladesh.

Campaigns organised by various community leaders and the local Member of Parliament have led to investigations of the collapse by the Metropolitan Police and a review of this industry by the government. Tighter regulation in this sector were expected to be introduced by 2009. The government has also indicated support for the setup of a crisis fund to compensate the victims.

History

According to the records available at Companies House, First Solution Money Transfer was set up as a Limited Company with a share capital of GB£100 on 14 April 2004. Of these 35 shares were held by Dr. Fazal Mahmood, 35 by Mr Ghulam Rabbani, 25 by Shah Mohammed Abdul Hadi, and 5 by Mohammed Nazrul. All four were named as directors of the company, and Ghulam Robbani as the company secretary. A further 40,000 shares of GB£1 each were issued during the 2005-06 accounting year, but the documents give no indication as to how or to whom the shares were distributed.

In presenting its accounts to Companies House, First Solution presented abbreviated accounts in accordance with the Financial Reporting Standard for Smaller Entities; these standards also obviated the need for the company to provide a

Bangladesh Bank

The Bangladesh Bank governor stated that First Solution was not given a license by the Bangladesh Bank.[4] However, First Solution is listed on the Bangladesh Bank's website as having agreements with a number of banks in Bangladesh through which it was permitted to remit money into the country.[5]

However, there are also a number of companies in the UK provided remittance facilities to Bangladesh which do not have the approval of Bangladesh Bank nor are they listed in the UK section of Bangladesh Bank's inward remittance providers list.[6]

In an article in the East London Advertiser,[7] Dr. Roger Ballard of the Centre for Applied South Asian Studies at the University of Manchester suggests that First Solution may well have been the first fruits of efforts by the UK's Department for International Development (DFID) to replace 'informal' community-based value transfer networks with 'more reliable' formal sector initiatives. DFID made a GB£7.5 million grant to the Bank of Bangladesh to achieve just that.[8]

But although their publicly announced reason for doing so was to provide migrants with cheaper and more reliable services, the underling subtext of such initiatives - also strongly backed by the World Bank and the US Treasury - was to prevent these 'informal' 'underground' networks being used by terrorists and drugs smugglers - even though there was little or no evidence that hawala networks were actually being used for such purposes. Most informed commentators concluded that such 'informal' networks provided migrant workers with a service which was easier to access, cheaper, swifter, and if anything even more reliable than those provided by the banks and other former sector agencies.[9]

DFID thought otherwise. First Solution was only too ready to agree, and carefully conformed with the necessary regulatory requirements - which were all about countering Terrorist finance and Anti–money laundering. The regulations made no reference to steps to be taken to ensure financial reliability. In the past there had been no need to do so. Trust-based networks which grew out of local communities had been extremely reliable.

However, First Solution was a totally different kind of beast. It was organised by the top down, had the blessings of the Bangladesh Bank, and perhaps of DFID as well (although they have so far kept their heads well below the parapet). But First Solution was a limited company: it wasn't grounded in networks of mutual trust or coalitions of reciprocity; and as a limited company it operated on the principle of caveat emptor - buyer beware. That's the capitalist logic of formality.

type	Private
industry	Foreign exchange market
foundation	2004
defunct	Yes
location city	London
location country	England
locations	41 branches
key people	Dr Fazal Mahmoud (Chairman) Gulam Rabbani Rumi (Director) Shah Mohammad Abdul Hadi (Director)
products	Clothing
revenue	£87 million (before collapse)
owner	Mamun Chowdhury Rob Huson
num employees	Over 100 agents
website	first-solution.co.uk

First Solution Money Transfer

History

Company structure

Liquidation

Bangladesh Bank

Cause of downfall

Investigation

Campaigns

See also

External links

References