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Tangled Tale of Mysterious Tape Tycoon

<i> Times Staff Writer</i>

Take a globe of the world and spin it. Wherever it stops is likely to be close to a place where Amarjit Singh Anand did business and borrowed money.

The tiny, bearded businessman in a dark turban sold bicycles to Iran, arranged to buy a Finnish television factory whose roof collapsed in a blizzard and once owned a pharmacy in the Persian Gulf sheikdom of Dubai.

He had investors in Singapore, bankers in Hong Kong, companies registered in Liberia, corporations in the Caribbean, an audiotape factory in India and came close to buying a New York bank. Never subtle, Anand and his three brothers heralded their 1982 opening of a videotape factory in Wales with a six-page London newspaper ad and celebrated with a three-day, $175,000 party at which a congratulatory telegram from Prince Charles was read.

Few were as impressed by the Los Angeles businessman’s worldwide connections as were his bankers. Throughout Asia, Europe and the Middle East, more than a dozen banks provided Anand and his brothers with almost $50 million in loans and letters of credit that the bankers thought were being used to build an international videotape enterprise.

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“He had a way of charming banks. I could not believe the amount of money he was able to get,” said Georges Abitboul, a Los Angeles businessman who, in 1982, sold Anand control of what would become his principal company, Intermagnetics Corp. in Gardena.

But the factories either never opened or were closed after operating briefly. Now, people who bankrolled Anand and his family are accusing them of fraud. Anand, who once traveled the world in search of business, is under court order to stay in Southern California pending trial in federal court on 14 counts of criminal bankruptcy fraud and three other related charges.

Anand and his brothers now claim that they have no money. All four have filed personal bankruptcy proceedings in Los Angeles or London. Their creditors do not buy the story, and believe that much of their money has been stashed in overseas bank accounts under the names of relatives and companies owned by family members, including one in Houston that is partly owned by Anand’s children.

“We are talking about something in the range of $80 million disappearing,” said Maurice Fitzmaurice, a lawyer based in The Hague, Netherlands, who has spent much of five years tracking the Anands’ assets for the banks. The $80-million figure, Fitzmaurice said, includes bank loans, money from investors, French and British government grants and money lost in plant operations.

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Anand refused requests for an interview. His lawyer, Brian A. Sun of Santa Monica, said Anand is innocent of the criminal charges. Sun said Anand contends that the banks reneged on loan agreements with him, causing his companies to collapse, and that the banks grossly exaggerate the unpaid amount of his loans.

The criminal charges, handed up by a federal grand jury in Los Angeles in July, involve alleged illegal sale of Intermagnetics videotape-making equipment, at a price of nearly $16 million, to a Chinese government agency through a sham company that Anand controlled. Authorities say the transaction was designed to keep the sale secret from his creditors and the U.S. Bankruptcy Court.

In addition to the charges in Los Angeles, Anand also faces criminal charges of bank fraud in Dubai and of bankruptcy fraud and embezzlement in France, according to Interpol police messages filed as court documents.

Conspiracy Alleged

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Sun said the financial problems of Anand and his family can be traced to business losses due mainly to a worldwide price war in the videotape industry in the early 1980s that crippled Intermagnetics. He accused the banks and lawyers of conducting a vendetta against Anand.

“We’ve come to the realization they want a pound of flesh and want a scapegoat,” Sun said.

Anand’s creditors disagree. Court papers that they have filed allege an international conspiracy to defraud the banks and enrich the Anands. In interviews, lawyers and former Anand employees described an operation in which money was continually shuffled through dozens of offshore bank accounts held in the names of numerous relatives.

“Mr. Anand is by far and away the most sophisticated person in the use of offshore bank accounts that I’ve encountered,” said Leonard L. Gumport, a Los Angeles lawyer who specializes in tracing offshore assets and who has chased down assets belonging to well-known people such as Saudi financier Adnan Khashoggi. Gumport has spent two years tracing Anand’s assets as a court-appointed trustee.

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Anand, 40, is a devout Sikh, part of a deeply religious sect that numbers about 15 million people worldwide and traces its roots to the Punjab region of India. Sikh men are recognized by their beards and turbans, and use “Singh” in their names. Court papers filed on Anand’s behalf say that he prays much of the day, that he organized three-day-long readings of scriptures for other Sikhs at his former home in Yorba Linda and that he held weekend services there that started as early as 3 a.m.

Anand’s story began with the oil boom in the Middle East and the fabulous wealth that it brought the region. Although a citizen of India, he was born and raised in Iran, where his father worked as a truck driver and later started his own transport business.

Dubai Welcomed Him

In the 1970s, Anand and his brothers took advantage of generous development grants available from the shah’s government and used the money to set up plastics, wire and cable plants. After the shah was overthrown in the Islamic revolution of 1979, Anand fled to Dubai with about $14,000. He and his family later asked the Indian government to help them recover $40 million to $50 million that they claimed to have left behind in Iran, although much of that amount was later found to have been borrowed from Iranian banks.

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Dubai, one of the United Arab Emirates, was once the port from which gold was smuggled to India. With its petroleum reserves limited by its small size, Dubai officials recognized that the country’s share of the oil riches would not last long, so they sought to attract new trade and business to develop what they called “the Hong Kong of the Middle East,” a port that could dominate trade in that area.

Dubai and its bank branches welcomed traders like Anand. He started in business there by setting up a company to ship goods, including a batch of bicycles, to Iran, where he still had contacts.

Anand set up in a high-rise office building a company called Agra International, an acronym for the names of Amarjit Anand and his brothers Arjan, Gurcharan and Rajinder. (Although all the brothers were involved in the businesses, Amarjit, the youngest, has always been the financial mastermind, former employees say.)

Agra became one of the most visible companies in Dubai. It sponsored symposiums at the Dubai Hyatt Regency hotel. It bought an eight-page advertising supplement in the Khaleej Times, one of Dubai’s leading newspapers, to promote itself and Intermagnetics. Anand threw lavish parties at his two-story home, where he maintained a private aviary.

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“People thought he was No. 1,” Dubai businessman Surinder Singh Kandhari, a fellow Sikh and former friend of Anand’s, said in a telephone interview. “Now, they don’t much talk about him. We all feel very let down.”

It was in Dubai that Anand began borrowing huge amounts from banks eager to lend money, including the Dubai branches of the Dutch bank Algemene Bank Nederland, Emirates National Bank Ltd. (which was taken over and became part of Emirates Bank International), Bank of Credit and Commerce (Emirates), and the Bank of Oman. The Dubai banks say they lent Anand and his companies more than $40 million.

Checks Cited

In a civil lawsuit filed in U.S. District Court in Los Angeles, Algemene Bank Nederland and Emirates National Bank accuse Anand of fraud in promoting a “carefully devised scheme” of phony transactions to encourage the banks to advance him money.

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The two banks’ suit also accuses Anand of a “fraudulent check-kiting scheme” in which checks were written against funds that did not exist and it claims that he borrowed money that was improperly used to borrow more money.

In one example cited, Emirates National Bank, which claims that Anand owes it $26 million, extended credit to Agra after Anand deposited $5 million with the bank as collateral. The bank later discovered, according to court documents, that the collateral was money that Anand had borrowed from it two days earlier.

“People in Dubai thought Anand was depositing money and using it as collateral to get long-term loans, but, as it turned out, there wasn’t any collateral,” Michael Lanyon, a British businessman who ran an Intermagnetics subsidiary for Anand in France, said in a telephone interview.

As Anand borrowed more and more from banks in Dubai, he was devising big plans for Intermagnetics, which he promoted as a future worldwide videotape powerhouse.

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One plant was opened in 1982 in Wrexham, Wales. Anand and his brothers promised that it would eventually produce 100 million feet of videotape a month, creating 130 jobs in an area hit hard by the closing of mines and factories.

To assist, the British government gave the Anands 500,000 pounds (about $750,000 U.S. at the time). One of their biggest boosters was Nicholas Edwards, the British Cabinet member for Wales. In a videotaped promotional message, he praised the Anand family as an “example to us all.” The Anands hired publicity agents worldwide to promote the company and flew in hundreds of guests from around the world to attend their celebration of the new plant.

Plants Short-Lived

Shortly after the grand opening, British authorities were embarrassed to discover that Rajinder Anand, who had been put in charge of Intermagnetics’ British operation, had a criminal record involving sales of counterfeit Sony audio cassettes. Three months before the factory was opened to widespread praise and celebration, he had served 14 days in jail for disobeying a previous court order prohibiting him from selling the cassettes.

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Not long after the plant in Wales opened, two others were planned for France, where a government-owned corporation provided $4.5 million in assistance funds. One videotape factory in Besancon, southeast of Paris, was opened but operated only sporadically under the Anands for a little more than a year. It is now operated by another firm.

Another videocassette plant in Montlucon, a high-unemployment area south of Paris, never opened. That plant drew the attention of President Francois Mitterrand. Even after the start-up had been delayed several times, he told a political rally that it would open soon, according to Lanyon.

By 1984, things were beginning to unravel for the Anands. In March of that year, according to court papers, the Dubai banks discovered that the checks Anand was writing were bad and stopped advancing him money. Three months later, he left Dubai for the United States, moving first to Houston and then to Southern California.

Shortly after that, he was charged in Dubai with bank fraud. Three former bank employees who dealt with Anand have since served jail time in Dubai for violating “banking traditions” and regulations, and have been deported to their native India.

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In Los Angeles, meanwhile, the main Intermagnetics operation was in deep trouble. Frank Culbertson, a former vice president with an Intermagnetics affiliate, said in a court declaration that in early 1984, videocassettes were “unaccountably disappearing” from the affiliate in what he described as “an increasing amount of unusual and questionable transfers of inventory.”

Filed Bankruptcy

Even as things were falling apart, Anand paid $25,000 to accountants to have them study the possible purchase of a small New York bank, a deal that never came about.

In 1984, Intermagnetics filed in Los Angeles for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. The company later was forced into Chapter 7, under which assets are liquidated.

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Anand remained free until May, 1989. On a visit to a factory in Placentia, he was arrested on charges of failing to appear at a bankruptcy hearing. Authorities found on him identification papers, issued in Thailand, giving his name as Ammar Jeet Singh.

Anand was held in a federal jail until authorities could bring the bankruptcy fraud charges against him in July. Earlier this month, he was released on $250,000 bail after numerous fellow Sikhs came forward to post $25,000 and pledged property to cover the rest. His trial, not yet scheduled, is expected to start later this year.

Meanwhile, claims against the Anands continue to pile up. In Singapore, a branch of Habib Bank of Pakistan holds a court judgment of more than $1 million for money that Anand borrowed, purportedly for a video-related venture, and never repaid.

Last June, Dubai’s Bank of Credit and Commerce obtained an $84.3-million judgment against Anand in Los Angeles Superior Court. It includes $20 million in punitive damages and $21 million in damages that were trebled for violation of the federal Racketeer Influenced and Corrupt Organizations Act.

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It appears that it will be difficult for the banks to get their money back. Sun, Anand’s lawyer, said that, contrary to what Anand’s creditors allege, money is not stashed away in secret foreign bank accounts.

“The creditors have been laboring under the false impression that the Anands have this money tucked away somewhere in a secret bank account in Switzerland. They can keep checking, but they are not going to find anything,” Sun said.

AMARJIT SINGH ANAND’S TRAIL OF DEBT Dubai $26 million owed to Emirates National Bank Ltd. $7 million owed to Bank of Credit & Commerce (Emirates) Netherlands $7.1 million owed to Algemene Bank Nederland borrowed through bank’s Dubai branch. $200,000 owed to Algemene Bank Nederland borrowed through Hong Kong branch Oman $1 million owed to Bank of Oman borrowed through Dubai branch Hong Kong $400,000 owed to Hongkong & Shanghai Banking Corp. $200,000 owed to Middle East Finance Ltd. $150,000 owed to Bank National De Paris India About $3.1 million to Central Bank of India borrowed through London offices $600,000 owed to State Bank of India borrowed through Hong Kong office $250,000 owed to Bank of India borrowed through Hong Kong branch $1.1 million to Indian Overseas Bank through Hong Kong branch United States $40,000 owed to Bank of America borrowed through Hong Kong branch Pakistan $1 million owed to Habib Bank Ltd. borrowed through Singapore office Great Britain About $1.5 million owed to H. Lock & Co. Ltd. Note: Money owed to banks worldwide by Amarjit Singh Anand and his companies is as listed in court records and related documents. Anand disputes amounts listed for many debts. Lawyers and creditors contend the listings do not show millions of dollars in other money that came from investors, other financial institutions and grants from foreign governments.


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