What went wrong for Portcullis Trustnet in Labuan?

Portcullis Trustnet has had a presence across the Pacific and in various Asian financial centres, including in Malaysia. In fact, the Labuan branch pre-dates the the purchase of Trustnet by Kok Kong Chong, and involves a merger with Malaysian lawyer George Pathmanathan in the mid 1990s. Their collaboration came to grief in the mid 2000s, when Chong tried to push Pathmanathan aside, and bring the Labuan operation under the control of Kim Boo and Geoff Barry (see the previous post). In 2011, however, Pathmanathan took legal action in the Malaysian High Court’s commercial division, on the grounds of Chong’s ‘oppressive’ actions. The case gives us insight into how Portcullis Trustnet operated, and its scale in financial terms; while the ICIJ Offshore Leaks database indicates who some of the clients in Labuan were, while Pathmanathan was in control.

The summary of the legal case (D3-26-50-2006) provides the detail of how George Pathmanathan had been operating a Labuan law firm since 1991, mainly involving offshore banking. Chong had been practising in Singapore, but set up David Chong & Co (Malaysia), based in Kuala Lumpur and Johor Baru. Pathmanathan then dissolved his legal firm, and became a partner of Chong’s, with his firm forming the basis of the Labuan branch. He also helped Chong develop Portcullis Holdings Sdn. Bhd. and held 25% of the shares, later known as Portcullis Trustnet (Labuan) Ltd; and two other companies were formed for the offshore clients, Portcullis Nominees Sdn. Bhd., and Portcullis Services Sdn Bhd. The later became Portcullis Trust (Labuan) Sdn. Bhd. in 1997, to pursue the growth of the trust business, with Pathmanathan holding a 25% shareholding; in 2003 Portcullis Trustnet (Labuan) Ltd was created, and a public company, Portcullis Trust (Malaysia) Berhad, was formed in 2004. According to the documentation, the Malaysian operation had 364 clients between 1995 and May 2006, when 227 entities were still active, and the turnover had grown to over US$1 Million.

The ‘acts of oppression’ began in 2005 after Chong had acquired Trustnet, and its offices in six offshore financial centres, and had tried to integrate the Labuan companies into the management structure. By 2006 Kim Boo and Geoff Barry had effectively taken over the management of the Malaysian operation, and Pathmanathan had been obliged to sell his shares to David Chong. He also began to transfer funds out of the Malaysian companies, first with US$500 000 to a holding company in the British Virgin Islands in 2006, and then nearly US$800 000 over the following three years to Portcullis companies outside the Malaysian jurisdiction. The Malaysian High Court in 2011 ruled that these transfers were unlawful, and ordered for the funds to be returned, and for the share sales to be reversed.

George Pathmanathan appears as an officer in the ICIJ database for 30 entities based in Labuan or Malaysia, either as secretary or director. As an example, he was the original director for Ventura Jaya Sdn. Bhd., which was incorporated in 2002, and remained active after he ceased being director in 2007. Ventura is linked to a Pedigree Trust, an entity registered in the British Virgin Islands since 2005, with the intermediary being Elizabeth Sindoro of Indonesia. She is also listed as Innocentia Pujiastuti Elizabeth Sindoro, usually minus the Innocentia, and is linked to the Unity Trust and Infinity Trust, both registered in the British Virgin Islands in 2008. Another link is for a Samoan company called Trucia Enterprise Ltd, and the officers for these entities include members of the Tjokrosaputro family. It turns out that Sindoro is her maiden name, and she was married to the late Handiman Tjokrosaputro, a batik company magnate, and her four daughters are obviously all linked to these offshore trusts and other companies in BVI, Samoa, and two in Labuan. They also appear in respectable jobs on the family company websites and in media articles.

Finally, there is another Sindoro in the database, an Eddy Sindoro, who seems to be Elizabeth’s older brother. He is listed with six entities, all based in the Cook Islands, and some dating back to the days of European Pacific. He seems to be the head of the Lippo Group in Indonesia, but the companies of the same name on the database are listed as deregistered or liquidated. However, Asia Pacific Leisure Ltd, Banksia Holdings Ltd, and the Indigo Investment Fund Ltd are still listed as active. Eddy Sindoro certainly comes up in websites for Indonesian publications, to do with a corruption case involving the Lippo Group and PT Paramount International Ltd, a company that his sister also seems to have an involvement with. The on-line articles indicate that the Corruption Eradication Commission, and High Court in Jakarta, was having trouble trying to locate Eddy Sindoro, and he was presumed to be still on the the run.

 

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