News Column

Mahtani's Mystery Shareholder in Michigan

June 23, 2014

Evans Mulenga

In the months leading up to the election of President Michael Sata, the controversial Indian multimillionaire Rajan Mahtani was being investigated for money laundering with assistance from the U.S. government for having made mysterious dividend payments to a woman living in Livonia, Michigan - a suburb of the city of Detroit.

The woman in question receiving tens of thousands of dollars in dividend payments from Mahtani's Finsbury Investments Limited was not an investor or representative of a financial institution, but rather works as a real estate agent and notary.

According to documents obtained by Zambia Reports, Mahtani's mystery shareholder is named Erika L. Droste, and is the beneficiary of account # 682-080-1733 at Comerica Bank. Over a period of time, Mahtani through Finsbury paid out more than $32,500 to this woman, prompting Zambia'sDrug Enforcement Commission (DEC) to suspect that these transactions formed part of an alleged money laundering network overseen by Mahtani.

Attempts to contact Ms. Droste were unsuccessful at the time of publication, though her publicly listed profile at Remerica Integrity Realtors states that she specializes in "representing clients in the purchases and sales of single-family residences, relocation, new construction, condominiums, vacant land and commercial development properties." Droste maintains an office located at 16172 Middlebelt Road, Livonia, Michigan, 48154.

According to the document obtained by Zambia Reports, "the investigation has revealed that Dr. Mahtani accrued a total sum of approximately US$20 million as FBZL dividends, some of which he later transferred to foreign jurisdictions. Based on this activity, Dr. Mahtani has been accused of being in possession of more than 25% beneficiary interest in voting shares of FBZL without prior authorisation from the Bank of Zambia, contrary to Zambia's Banking and Financial Services Act, as well as money laundering in violation of Zambia's Prohibition and Prevention of Money Laundering Act."

It is unknown what the result was of the DEC's interviews with Ms. Droste facilitated by the Assistant United States Attorney (AUSA), or even if the investigation was able to take place before President Sata was elected, putting an end to the Mahtani matter. Among the other shareholders in Finance Bank potentially involved in the money laundering investigation is Credit Suisse - though their 40% shareholding is disputed as a disguised loan rather than a true strategic stake.

A confidential source has promised to release the full U.S. court documents on the money laundering investigation against Mahtani, which are expected to be published soon.

These revelations add more fuel to the fire of a string of controversies for the Ndola-based banker, including the alleged theft of the Zambezi Portland Cement company through forgery and fraud, shady tactics against the owners of the Radisson Blu hotel in Lusaka, and the continued illegal operation of Finance Bank. Most recently, Mahtani was again dragged into a dispute involving the Director of Public Prosecutions Mutembo Nchito, who was found to have lied before a parliamentary select committee, promising not to be involved in any case involving Mahtani. Instead, Nchito immediately dismissed two cases against Mahtani, resulting in the forgiveness of more than $4.2 million in debt from Mahtani.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: AllAfrica

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters