Jamal Barzinji of the IIIT, Bank Islam & Bosnia

In an earlier posting (see below) I provided evidence of some links between alleged terrorist financiers in Bosnia and Bank Islam in Malaysia. In that posting I also provided evidence of links between Bank Islam Malaysia and the International Institute of Islamic Thought (IIIT),  which continues  to be investigated for financing terrorism (see http://www.iht.com/articles/ap/2006/11/09/america/NA_GEN_US_Attacks_Professor.php)

It now appears that Malaysia's Central Bank has also begun to raise  questions about the links between the IIIT and Bank Islam,and the losses incurred by the bank.

In an article  published in THE EDGE,Malaysia, on October 23,2006 it was reported:

Key shareholders, directors and management are to blame for Bank Islam Malaysia Bhd's losses ?This was the message sent by Bank Negara Malaysia (BNM) last Monday....The central bank clarified in an email last Thursday that its examination showed that the bulk of the losses and provisions were attributable to weaknesses in the credit evaluation, monitoring, system of controls and the business culture ....In line with corporate practice, the larger shareholders were represented on the board.. ..But there were exceptions ......(as evidenced by) the presence of Dr Jamal Muhammad Barzinji on the BIMB board. He was appointed a director in 1997, representing Jami Company Sdn Bhd. As at September 2001, Jami held a 3.82% stake in BIMB, far less than EPF or LTAT, neither of whom appointed any directors to the board.

According to the 2001 annual report, Jamal, an American, was also a director at Bank Islam(ie the bank itself,and not just the holding company)

He was principal partner of Amana Corporation, President of Piedmont Poultry Inc and a director of the International Institute of Islamic Thought. He also did not attend any board meetings held that financial year.

Checks with the Companies Commission show that Jami Company is an investment holding, property development and rental company. It has an issued share capital of RM93.6 million and unappropriated losses of RM114.5 million as at December 2003 (for details on JAMI see earlier posting below).

By September 2002, Jami Company had lowered its stake in BIMB to only 1.33%, and Jamal had retired from the boards of BIMB and Bank Islam. By September 2004, Jami Company was no longer listed amongst the top 30 largest shareholders in Bank Islam.

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Terrorist Financing in Bosnia  and Bank Islam

A July 2003 story  published in   the "Slobodna Bosna" magazine of Bosnia suggests that Bank Islam Malaysia   is  holding or has held deposits worth about EUR 300 million for the  benefit of the Third World Relief Agency (TWRA).

The story further suggests that these funds have been now made  available to Bomsal , a Malaysian /Bosnian joint venture ,for the construction of a toll highway.( http://www.nato.int/sfor/media/2003/ms030725t.htm)

Bosmal itself has confirmed that it had received a financial facility  from Bank Islam,for the highway as well as other development  projects in Sarajevo. (see http://www.bosmal.com/en/?lg=en&nav_ID=1)

The subject matter of that story at   http://www.nato.int/sfor/media/2003/ms030725t.htm  ,and the claims made on the Bosmal website were  put to Bank Islam .The  responses  received were :

First :

Bank Islam Malaysia Berhad is unable to comment or disclose the business dealing as we are governed by  the Offshore Banking Act 1990, which clearly spells out client's  confidentiality.....

And later:

kindly contact Corporate Communications Dept  of the Central Bank of Malaysia at 603-2698 8044. We are unable to entertain  your question as we are guided by the Banking Secrecy Act.

In Otober 2005 , the Malaysia business daily,  The Edge quoted Bank Islam CEO Noorazman Hashim saying:

Bank Islam Malaysia Bhd unveiled a comprehensive plan to tackle its whopping RM2.2 billion(about USD 5 billion) worth of non-performing loans (NPLs) last Friday. But little light was shed on how these bad loans arose in the first place, and more pertinently, who were responsible.
Datuk Noorazman A Aziz, the bank's managing director and CEO since April, narrowed down the cause to Bank Islam Labuan Offshore Branch .

Noorazman confirmed news reports that some RM450 million (about USD 113 millon) of the bad loans was made to companies in Sarajevo and South Africa. Market talk is that these companies are involved in construction and housing projects, and that more funds may need to be ploughed in to complete these projects before the borrowers can repay their debt .
(Excerpt from story: In the dark over Bank Islam NPLs (The Edge Malaysia (Weekly)-10 October 2005))

That EUR 300 million loan does not seem to appear anywhere in Bank Islam's books,and Bank Islam has refused to deny this assertion. As well the amount is way above Bank Islam's single customer lending limit.

Bank Islam’s involvement with Bosmal is viewed in the context of the following transactions.

In September 1990  The Malaysian Minsitry of Finance sold a 17.5 % stake that it then owned in Bank Islam , to a company named  to JAMI Malaysia Sdn Bhd.

Jami’s  shareholders were the New York-based SAAR
Corporation,  the Saudi-based Al Rajhi Banking and Investment
Corporation (ARABIC)  and Sheik  Salah Kamel's Al Baraka Group.
The minister for finance at that point  of time was one Daim Zainuddin

Anwar Ibahim replaced Daim Zainuddin as Minister for Finance in 1991.

Bank Islam  was floated and was  listed on the Kuala Lumpur Stock Exchange  in 1992 .

In May 1994  the Ministry of Finance  disposed of
its entire 21.14m shares in Bank Islam Malaysia Bhd to Lembaga Urusan
dan Tabung Haji(The Pigrims Board) and JAMI , and ceased to be a
substantial shareholder. A total of 18.46m shares were sold to Lembaga
Urusan dan Tabung Haji bringing its stake in Bank Islam to 35.70m
shares, or 26.76%. The remaining 2.89m shares were sold to Jami
Company, which was at that time  the registered holder of 5.27m
shares.

JAMI’s interest in Bank Islam was represented on the latter’s board by Jamal Barzinji,who was  appointed  a director in 1994  and appears to have remained one until sometime in 2003.

Jamal Barzinji’s background was summarised thus by Glen Simpson of the Wall Street Journal:

Jamal Barzinji, Ahmed Totonji and Hisham Al-Talib

  --, this trio of Iraqi immigrants founded the International Institute of Islamic Thought(together with Anwar Ibrahim). They have long-standing ties to Youssef Nada of the Muslim Brotherhood and to Saudi businessmen involved in promoting Islam world-wide. Beginning in the 1960s and '70s, they helped found and run several top Saudi-backed U.S. Muslim groups.

  -- Messrs. Barzinji, Al-Talib and Totonji are under federal investigation,

but they deny ties to terrorism. Their lawyer says they are no longer close

to the Saudis.

(Tangled Paths: A Sprawling Probe Of Terror Funding Centers in Virginia --- U.S. Tries to Tie Maze of Firms, Charities Based in Herndon Into a Global Network --- Bin Laden's `Golden Chain' By Glenn R. Simpson ,WSJ21 June 2004)

Jamal Barzinji’s background was summarised by Glen Simpson of the Wall Street Journal:

  -- Messrs. Barzinji, Al-Talib and Totonji are under federal investigation,

but they deny ties to terrorism. Their lawyer says they are no longer close

to the Saudis.

(Tangled Paths: A Sprawling Probe Of Terror Funding Centers in Virginia --- U.S. Tries to Tie Maze of Firms, Charities Based in Herndon Into a Global Network --- Bin Laden's `Golden Chain' By Glenn R. Simpson ,WSJ21 June 2004)

Comments

[Hesham]

I've read Ur article about Alrajhi Bank & since I'm a Saudi investor and I deal regularly with this bank. I totally agree with u. I do believe that this bank commits money laundry on regular basis and I do think that I have the necessary documents that proves this act if requested from me.