MPACUK has managed to get hold of an explosive article that some people involved in a shocking financial scam did not want you to read. Together with some internal emails we have also managed to obtain, they reveal the horrendous story of how hundreds of UK Muslims have been swindled, some having lost their life savings, while others stand to be booted out of their own homes any day now and their homes repossessed.

The story began almost three years ago amidst intense excitement at the end of 2005.

Rumours had begun circulating that some London-based investors in a new equities/foreign exchange trading firm called Fierezza Jardine (later to be renamed as Knight Wazir) were obtaining regular monthly returns of around 5% on their investments. That amounted to a whopping 60% increase in investments per year. Word spread quickly amongst family and friends about this seemingly attractive money-making scheme.

Many investors say they were first introduced to Fierezza Jardine/Knight Wazir by Isfandyar Aslam, who acted as its main representative in the UK and is based in Ilford, Essex.

Over the next two years, around 500 investors mainly from London are believed to have joined in by depositing ever-increasing amounts of money and the fund managed by Knight Wazir – now based in Dubai - was said to have reached a value of £25 million. All the investors received monthly updates on their investments via a written statement and all were regularly declaring positive returns without fail.

Many of the Muslim investors say they found Knight Wazir an attractive proposition not only because of the positive returns but also because the KW contract specifically stated that:

‘The Fund Manager declares that based on his research he is convinced he is trading within the principles of Shari‘ah’.

In addition, investors were told that in any one month the maximum amount of their investment that was at risk of being lost in trading was 5%. The Knight Wazir website has now been pulled down by persons unknown, but this undertaking by KW can still be viewed courtesy of the wonderful Way Back Machine.

However, in February 2008, new - and this time very worrying - rumours suddenly began circulating. Some investors were reporting that their requests for withdrawal of funds were being stalled and prevented by Knight Wazir citing reasons about ‘new procedures’ having been put in place. And the official profit statement from Knight Wazir gave a ‘0.0%’ return figure for that month. It was the first time that KW had not declared a positive return.

Amid mounting concern among investors, in April 2008 an official statement entitled ‘Recent Policy Changes: Your Questions Answered’ was circulated by Knight Wazir to all its investors informing them that they would now be required to provide three months notice before any withdrawals could be authorised. It sought to justify this move by insisting that Knight Wazir wanted to give priority to obtaining good returns for its investors rather than waste expensive time on simple administrative tasks.

Was the fund in trouble? Not at all, insisted Knight Wazir in the same statement. To a direct question about whether investors had lost any of their money, KW gave the following response:

‘No...Money is always being made and lost in trading, but all clients’ balances have returned at least marginal profits in March.’

In a famously difficult global financial climate even ‘marginal profits’ would be regarded by investors as heartening news. And the monthly statements – February 2008 notwithstanding - that the investors were still receiving were all showing positive returns. That would have been somewhat reassuring for the investors, if the information provided in the Knight Wazir statements was honest and truthful, that is.

To discourage nervous investors from making any withdrawals, Knight Wazir now offered a special incentive:

‘As an added incentive to encourage a longer-term view we are offering clients who withdraw less than 5% of their capital balance as of 1st July 2008 (in July and October combined) a return bonus at the end of the year. The expectation of this bonus is between 15% to 20% of their 1st July 2008 balance.’

Looking back on the events this appears to have been a desperate ploy to prevent investors from withdrawing their funds.

Then finally on 26th June 2008 came a truly shocking email sent to all KW investors from the Chairman and Principal Trader of Knight Wazir, Mr Atif Naz:

‘It is with regret that I confirm to you I have in fact made significant losses...I believe the funds are down by at least 80%...I sincerely apologise for the distress this message will have caused.’

For many of those investors who had been told by Knight Wazir and its representatives that their money was increasing steadily all the time month by month this came as utterly staggering news. What on earth had happened?

Unfortunately, the investors were not able to query the Chairman of Knight Wazir, Atif Naz, because he promptly disappeared and stopped returning messages sent to him on his mobile.

The last few weeks have been unbearably agonising for many of those investors who have been financially devastated and indeed ruined by this experience.

Ahmed Jamil (name changed), of Whitechapel, had initially invested £30,000 in Knight Wazir in January 2007. After receiving regular positive returns statements from Knight Wazir, he felt confident enough in June 2007 to increase his investment to £250,000. Following the dramatic collapse of Knight Wazir and the absconding of its Chairman, Atif Naz, Mr Jamil is now facing up to the realisation that his family home will shortly be repossessed by his bank because of his losses.

‘I had known the person who approached me to invest in Knight Wazir as a good practicing Muslim. The whole thing was based on trust. Now it looks as if all the statements we received were just based on lies designed to keep us happy and draw more gullible people into investing with Knight Wazir,’ says Mr Jamil now.

One of the investors in Knight Wazir and a close friend of Atif Naz, the Birmingham based Waseem Yaqub OBE, called an investors meeting at short notice at the end of June 2008 and flew to Dubai immediately thereafter, in order he stated, to find out more about what had occurred. His report back to the investors on his return from Dubai caused disquiet among many other investors especially when it was discovered that Mr Yaqub had obtained Power of Attorney – an authorisation to act on someone else's behalf in a legal or business matter - from Mr Atif Naz.

Emails obtained by MPACUK reveal that when one Muslim writer contacted Waseem Yaqub last week with a view to writing about the Knight Wazir fiasco, Mr Yaqub tried to dissuade him from writing an article about it saying that it would not ‘shine a positive light’ on the Muslim community and would bring bad publicity to British Muslims. It was put to Mr Yaqub that many now ruined investors clearly believed that they had been defrauded and had been given false information for months and possibly years about their investments by Knight Wazir and that justice would perhaps be better served by writing about the events in a transparent manner. At the very least it might help others to be more cautious and seek out independent financial advice before making risky investments. Mr Yaqub appeared to be less than convinced.

And before Mr Yaqub could be asked about how he had obtained the Power of Attorney and what had transpired in his discussions with Atif Naz, Mr Yaqub chose to put the phone down.

An investor’s group called the Knight Wazir Victim’s Forum has now been established to share information about the KW fiasco and discuss what legal avenues are available to them to seek redress for what has occurred. Judging from the comments posted on the Victim Forum’s website it is clear many believe they have been unwittingly party to a Ponzi-type fraud, named after Carlo Ponzi, a conman who attracted investors with promises of quick, high returns in Boston in the 20s. It works by paying back some investors early on to create a buzz and lure more money in.

To add to this combustible mix, the KW Chairman Atif Naz is known before he disappeared to have purchased the 22nd floor of the expensive Dubai Pearl building. In May 2008 Knight Wazir began offering shares in the Dubai Pearl property to investors. Unsurprisingly, many investors now suspect that the purchase of the Dubai Pearl property was made at least partly using their own funds.

Not unnaturally, the investors urgently want to find out more about the current status of that property as a possible means of recovering some of their lost investments. Given the Power of Attorney which he had by his own admission obtained from Mr Atif Naz, Waseem Yaqub was asked by email whether he had had any dealings with the Dubai Pearl property. MPACUK has learnt that Mr Yaqub has yet to respond to this question.

All in all, this is a very sad episode and but if there is a lesson to be drawn from all this, it must be that investors should steer clear of any investment scheme – even, or perhaps, especially if it claims to be ‘shari’ah compliant’ - that is not properly regulated be it by the FSA or its equivalents overseas and in all cases should seek independent legal advice before parting with their (and their families) hard won money.

All of us at MPACUK hope and pray that those investors who were misled and are now suffering badly are able to succeed in their efforts to bring those who lied to them to justice.

Links:

http://kwinvestorsforum.com/

http://www.guardian.co.uk/uk/2004/aug/24/ukcrime.usa

http://www.amwalinvestors.com/showthread.php?t=93

http://64.233.169.104/search?q=cache:n6EaJp8VIWIJ:knightwazir.com/KWIC.html+%22knight+wazir%22&hl=en&ct=clnk&cd=3&gl=uk

http://web.archive.org/web/20070402015400/http://www.knightwazir.net/

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