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Malaysian political family accused of money laundering in Canada

Malaysian political family accused of money laundering in Canada

New report exposes the Taibs' $200 million real estate group
Read the Report: «Safe Haven Canada» (PDF, 16.5 MB)

(OTTAWA, CANADA) A new research report presented at the Canadian parliament today shows how a Malaysian politician’s family used real estate in Canada’s capital, Ottawa, for the laundering of major amounts of unexplained wealth. According to the Safe Haven Canada report released by the Swiss Bruno Manser Fund, the family of Sarawak Governor Taib Mahmud („Taib“) channelled at least CAD 69.8 million but possibly as much as CAD 150 million of unexplained wealth into Sakto, a multinational real estate group based in Ottawa. Sakto was incorporated in 1983 by Jamilah Taib and Onn Mahmud, Taib’s daughter and brother, and soon got involved in major property transactions and construction projects.

Today, the group’s property holdings exceed CAD 200 million, not counting the group’s subsidiaries in the US, Britain and Australia. The report shows how the Taib family used Canadian businessmen, such as Sean Murray, the son of a well-know Irish-Canadian family of architects, as the public face of Sakto while the Taibs retained the shareholdership and provided the group’s capital.

Rapid growth despite continuous losses

Safe Haven Canada shows how the Taibs developed a business model which allowed Sakto to prosper despite continuous losses. The secret behind this apparent economic miracle was a steady influx of money from its Malaysian owners. By 1993, after ten years of operations, the Taibs had channelled at least CAD 29.8 million into Sakto, mainly via shareholder loans. In 1996, Taib’s wife and children granted the company another CAD 40 million in loans, thus increasing the Taib family stake to CAD 70 million. In December 1995, Jamilah Taib concluded a funding agreement for Sakto with her family and two Taib-linked offshore companies in Jersey and Hong Kong. In 1988, Sakto started to invest into a major office and apartment complex in Ottawa’s Little Italy wich cost an estimated CAD 146 million until its completion in 2003. Last month, Sakto, obtained the approval for the construction of another 24-storey building at Ottawa’s Preston Square.

“We are talking about a sophisticated long-term operation which has allowed a corrupt politician’s family to launder huge amounts of money in Canada“, said Lukas Straumann, one of the authors of the report. “The origin of these funds cannot be satisfactorily explained by the Taibs.“ In 2011, Taib Mahmud publicly acknowledged that he had provided his daughter the initial capital for her real estate business. He claimed he had received the amount as a gratuity upon resigning from federal government in 1981.

Government inaction

The Bruno Manser Fund, along with several Canadian NGOs, criticized the Canadian government and the Royal Canadian Mounted Police (RCMP) for their lack of action against Sakto. “We first informed FINTRAC back in 2010 on the Taib family’s real estate holdings in Ottawa but nothing has happened“, said Straumann. “Canada is a signatory to the UN Convention Against Corruption and has an international obligation to fight corruption. We expect the Canadian government and judiciary to open criminal proceedings against Sakto and the Taib family and freeze all their unexplained wealth in Canada.“

(30 March 2017)

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by moxi