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{{Use dmy dates|date=April 2020}}
{{Infobox company
| name = First Solution Money Transfer
| logo = FirstSolutionLogo.png
| logo_size = 220px
| logo_alt =
| logo_caption =
| logo_padding =
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| image_size =
| image_alt =
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| trading_name =
| native_name =
| native_name_lang =
| romanized_name =
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| type = [[Limited company|Private]]
| traded_as =
| ISIN =
| industry = [[Foreign exchange market]]
| genre =
| fate =
| predecessor =
| successor =
| foundation = {{Start date|2004}}
| founder =
| defunct = Yes
| location_city = [[London]]
| location_country = [[England]]
| locations = 41 branches
| area_served =
| key_people = Dr Fazal Mahmoud (Chairman)<br/>Gulam Rabbani Rumi (Director)<br/>Shah Mohammad Abdul Hadi (Director)
| products = [[Clothing]]
| brands =
| production =
| services =
| revenue = [[GBP|£]]87 million (before collapse)
| operating_income =
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| assets =
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| owner = Mamun Chowdhury<br/>Rob Huson
| members =
| num_employees = Over 100 agents
| parent =
| divisions =
| subsid =
| website = {{URL|first-solution.co.uk}}
| footnotes =
| bodystyle =
}}

'''First Solution Money Transfer''' was a [[UK]]-based [[private limited company]] which provided a [[money transmitter|money transfer service]], providing expatriates the facilities to transfer money back to their family in Bangladesh.

In June 2007, the company went into liquidation owing nearly [[GBP|GB£]]2  million pounds to the public, the majority of whom were from the [[Sylhet Division|Sylhet]] region of [[Bangladesh]].

Campaigns organised by various community leaders and the local [[Member of Parliament]] have led to investigations of the collapse by the [[Metropolitan Police]] and a review of this industry by the government. Tighter regulation in this sector were expected to be introduced by 2009. The government has also indicated support for the setup of a crisis fund to compensate the victims.

==History==
According to the records available at [[Companies House]], First Solution Money Transfer was set up as a [[Private company limited by shares|Limited Company]] with a share capital of [[GBP|GB£]]100 on 14 April 2004. Of these 35 shares were held by Dr. Fazal Mahmood, 35 by Mr Ghulam Rabbani, 25 by Shah Mohammed Abdul Hadi, and 5 by Mohammed Nazrul. All four were named as directors of the company, and Ghulam Robbani as the company secretary. A further 40,000 shares of GB£1 each were issued during the 2005-06 accounting year, but the documents give no indication as to how or to whom the shares were distributed.

In presenting its accounts to Companies House, First Solution presented abbreviated accounts in accordance with the Financial Reporting Standard for Smaller Entities; these standards also obviated the need for the company to provide a [[cash flow statement]] to the authorities. As a result, the data available from Companies House about First Solution's business activities are remarkably skimpy.

As the figures are presented, the most substantial item in First Solution Money Transfer's accounts is an interest-free loan which the company had made to First Solution UK Ltd, and of which Dr. Fazal Mahmood and Mr Ghulam Rabbani were also directors. This loan amounted to GB£24,834 in 2005, and had risen to GB£190,697 in 2006. The documents also show that the directors paid themselves GB£9,600 in 2004–05, and a similar amount the following year, during which independent auditors were also paid GB£5,000 for their services.

In keeping with the company's presentation of itself as a small business, the directors concluded, and the auditors concurred, that there was no need to include any details of the funds which the Company transferred to Bangladesh on behalf of its customers. Hence the only indication of the company's success (or failure) in implementing its core business was the declaration of a small loss of GB£435 on its foreign exchange activities during 2005–06. No details of the company's activities during the following financial year are available at Companies House, since the business had by then collapsed.

==Company structure==
First Solution Money Transfer had its headquarters at the [[London Muslim Centre]] in east London with another prominent office in [[Brick Lane]]. Additional branches and affiliated agents were dotted around the major towns and cities of the UK with a few in the rest of Europe.

The company grew from its inception in July 2004, increasing turnover from 4 million GBP to approximately 87 million GBP year ending 2007

==Liquidation==
The company went into [[Administration (insolvency)|liquidation]] in June 2007 owing, according to the company directors, [[GBP|GB£]]1.7 million pounds to the public who had used its money transfer service in the preceding 2–3 months.<ref>[http://news.bbc.co.uk/1/hi/england/london/6271686.stm Millions lost as firm goes bust]. BBC News. 2007-07-04.</ref>

The scandal sent shockwaves through the Bangladesh money transfer industry in the UK. Measures are being put in place by the [[Government of Bangladesh]] to ensure a similar situation does not occur again.

The sudden closure of former First Solution Money Transfer Ltd (now known as XTL Ltd) on 28 June 2007 was a major blow to the UK Bangladeshi community which used it to send their hard earned money to relatives in Bangladesh.

Since then, some of the former agents and branch staff of First Solution embarked on a 'corporate recovery' package to resolve this situation and reach a position whereby all remittance creditors can be paid.

The new management of First Solution, consisting of 13 former Agents and Branches, successfully acquired the ''First Solution'' brand and commenced trading in May 2008.

One of the stated goals of the new organisation was to pay back as much of the money as possible to people who had lost funds in the scandal. It is unclear how much of the money has been repaid.

The UK government was expected to bring in tighter regulation to this sector by 2009.<ref>[https://www.theyworkforyou.com/wms/?id=2007-07-11a.55WS.1 Written Ministerial Statement on First Solution Money Transfer]. Hansard. 2007-07-11.</ref><ref name=ela070713>[http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED13%20Jul%202007%2013%3A04%3A49%3A920 Rescue deal in sight over First Solution collapse] {{webarchive |url=https://web.archive.org/web/20070928041029/http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED13%20Jul%202007%2013%3A04%3A49%3A920 |date=28 September 2007 }}. East London Advertiser. 2007-07-13.</ref>

==Bangladesh Bank==
The [[Bangladesh Bank]] governor stated that First Solution was not given a license by the Bangladesh Bank.<ref>[http://nation.ittefaq.com/artman/publish/article_37284.shtml BB Governor on First Solution’s fraud]. The New Nation. 2007-07-02.</ref> However, First Solution is listed on the Bangladesh Bank's website as having agreements with a number of banks in Bangladesh through which it was permitted to remit money into the country.<ref name=bbremittancelist>[http://www.bangladesh-bank.org/investfacility/drawing.php Inward remittance facilities] {{webarchive |url=https://web.archive.org/web/20070613074240/http://www.bangladesh-bank.org/investfacility/drawing.php |date=13 June 2007 }}. Bangladesh Bank.</ref>

However, there are also a number of companies in the UK provided remittance facilities to Bangladesh which do not have the approval of Bangladesh Bank nor are they listed in the UK section of Bangladesh Bank's inward remittance providers list.<ref>[http://e-bangladesh.org/headline/money-transmitting-to-bangladesh-from-ukpoor-performance-of-bangladesh-bank.html Money Transmitting to Bangladesh from UK]{{dead link|date=June 2016}}. E-Bangladesh. 2007-07-14.</ref>

In an article in the [[East London Advertiser]],<ref>[http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED13%20Jul%202007%2012%3A57%3A43%3A710 First Solution: Did the Government's 'safety first' plan backfire?] {{webarchive |url=https://web.archive.org/web/20070928041037/http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED13%20Jul%202007%2012%3A57%3A43%3A710 |date=28 September 2007 }}. East London Advertiser. 2007-07-13.</ref> Dr. Roger Ballard of the Centre for Applied South Asian Studies at the [[University of Manchester]] suggests that First Solution may well have been the first fruits of efforts by the UK's [[Department for International Development]] (DFID) to replace 'informal' community-based value transfer networks with 'more reliable' formal sector initiatives. DFID made a [[GBP|GB£]]7.5 million grant to the Bank of Bangladesh to achieve just that.<ref>{{cite news |last=Ballard |first=Roger |date=12 July 2007 |title=First Solution: a safety-first plan backfires |url=http://www.casas.org.uk/papers/pdfpapers/firstsolution.pdf |newspaper=East London Advertiser |type=Opinion |via=Centre for Applied South Asian Studies}}</ref>

But although their publicly announced reason for doing so was to provide migrants with cheaper and more reliable services, the underling subtext of such initiatives - also strongly backed by the [[World Bank]] and the [[US Treasury]] - was to prevent these 'informal' 'underground' networks being used by terrorists and drugs smugglers - even though there was little or no evidence that ''hawala'' networks were actually being used for such purposes. Most informed commentators concluded that such 'informal' networks provided migrant workers with a service which was easier to access, cheaper, swifter, and if anything even more reliable than those provided by the banks and other former sector agencies.<ref>[https://archive.today/20071205052406/http://www.arts.manchester.ac.uk/casas/papers/hawala.html Hawala/IVTS Networks] . Centre for Applied South Asian Studies.</ref>

DFID thought otherwise. First Solution was only too ready to agree, and carefully conformed with the necessary regulatory requirements - which were all about countering [[Terrorist financing|Terrorist finance]] and [[Anti-money laundering]]. The regulations made no reference to steps to be taken to ensure financial reliability. In the past there had been no need to do so. Trust-based networks which grew out of local communities had been extremely reliable.

However, First Solution was a totally different kind of beast. It was organised by the top down, had the blessings of the Bangladesh Bank, and perhaps of DFID as well (although they have so far kept their heads well below the parapet). But First Solution was a limited company: it wasn't grounded in networks of mutual trust or coalitions of reciprocity; and as a limited company it operated on the principle of ''[[caveat emptor]]'' - buyer beware. That's the capitalist logic of formality.

==Cause of downfall==
It is still unclear if the situation had been exacerbated as a result of media pressure causing thousands of people to demand immediate refunds effectively causing a cashflow crisis at the company and forcing it to call in liquidators. Investigation is currently ongoing to determine the full extent of the problem and whether the company was involved in [[fraud]]ulent activities or undertook risky speculative business in the [[currency market]].

In a press statement displayed on the company's website, the directors stated that [[Bangla TV]], a UK-based [[Bengali language]] satellite TV channel, had been irresponsible in showing angry public opinion calling for the directors and their families to be "pursued" and not to rest until they were shown "naked in the street". The directors have also stated that Bangla TV had caused panic among the community by falsely stating that the company had gone bankrupt when it hadn't on 25 June 2007. The company, therefore, had no choice but to call in liquidators as the investment and cash-injection it was seeking at the time had fallen through as a direct result of these misrepresentations by Bangla TV.<ref>[http://www.first-solution.co.uk/ First Solution Money Transfer Press Statement] {{webarchive |url=https://web.archive.org/web/20070809035736/http://www.first-solution.co.uk/ |date=9 August 2007 }}. Directors, First Solution. 2007-07-03</ref>

In an e-mail interview given to the E-Bangladesh news site, the directors re-iterated their views on the cause of the downfall.<ref>[http://e-bangladesh.org/headline/approximately-1.7-million-pound-was-failed-to-deliver-dr.-fazal-mahmood.html Approximately 1.7 Million Pound was failed to deliver: Dr. Fazal Mahmood]{{dead link|date=June 2016}}. E-Bangladesh. 2007-07-11.</ref>

== Investigation ==
An investigation has been initiated at the request of [[Stephen Timms]], minister of the [[Department for Business, Enterprise and Regulatory Reform]]. In the early hours of 6 July 2007, the [[Metropolitan Police]] seized documents and computers from the First Solution head offices in London. These materials have now been requisitioned by the [[Companies Investigation Branch]] of the [[BERR]] (formerly [[Department of Trade and Industry (United Kingdom)|DTI]])

== Campaigns ==
On 8 July 2007, a rally was held at [[Altab Ali Park]] where [[George Galloway]] called on the government to compensate the victims for the money they lost in this scandal.

On 10 July 2007, George Galloway held a meeting with [[Kitty Ussher]] ([[Economic Secretary to the Treasury]]) and called on the government to set up a [[Farepak]]-style crisis fund to compensate the victims. The minister said there would be support for such a fund from the government and a statement would be made to parliament shortly on the First Solution crisis.

Hundreds of people demonstrated and lobbied MPs outside the houses of parliament on 11 July 2007. The government has confirmed it is planning a rescue package to compensate the victims although the government itself would not be donating any money into the fund.<ref name=ela070713/> The issue was debated in Parliament on 18 July 2007.<ref>[https://publications.parliament.uk/pa/cm/cmtoday/cmwhall/12.htm#hddr_2 Parliamentary debate]. Hansard. 2007-07-18.</ref>

On 3 August 2007, the Government's Official Receivers were appointed as provisional receivers at the request of the Secretary of State, Stephen Timms. A provisional court date of 6 November 2007 has been announced.

==See also==
* [[British Bangladeshi]]

==References==
{{reflist}}
{{refbegin}}
* [http://news.bbc.co.uk/player/nol/newsid_6270000/newsid_6271400/6271402.stm?bw=bb&mp=wm Boss accepts losing millions]. BBC News. 2007-07-04.
* [https://www.bbc.co.uk/radio4/youandyours/items/01/2007_27_mon.shtml Missing millions?]. BBC Radio 4. 2007-07-02.
* [https://www.bbc.co.uk/london/content/articles/2007/07/03/towerhamlets_transfer_video_feature.shtml First Solution's last stand]. BBC News. 2007-07-03.
* [https://web.archive.org/web/20070928041103/http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED28%20Jun%202007%2014%3A27%3A26%3A613 E-cash firm halts transfer deals]
* {{cite news |title=Cash transfer business calls in insolvency experts as MP calls for probe |url=http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED04%20Jul%202007%2021:37:07:923 |newspaper=East London Advertiser |date=2007-07-04}}{{dead link|date=December 2016}}{{cbignore}}
* [http://money.guardian.co.uk/news_/story/0,,2132559,00.html Despair as money transfer firm collapses]. The Guardian. 2007-07-23
* [https://web.archive.org/web/20070927223003/http://www.inthenews.co.uk/money/autocodes/countries/bangladesh/call-mainstream-bank-transfers-$1113607.htm Call for mainstream bank transfers]. 2007-07-25.
* [https://web.archive.org/web/20070928041111/http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED31%20Jul%202007%2021%3A59%3A56%3A093 More questions over First Solution collapse as Galloway raises issue in Parliament]. East London Advertiser. 2007-07-31.
* [https://web.archive.org/web/20071018052603/http://blogs.mirror.co.uk/mirrorinvestigates/sommerlad/august2007/transfer.htm No solution for money transfer victims]. Daily Mirror. 2007-08-03.
* [https://web.archive.org/web/20070928041054/http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED16%20Aug%202007%2020%3A04%3A59%3A883 First Solution rescue package being blocked]. East London Advertiser. 2007-08-16.
* [https://web.archive.org/web/20070929101329/http://www.last-solution.co.uk/first-solution-money-transfer-ltd/support-the-rescue-deal-to-revive-first-solution-money-transfer Support the Rescue Deal to Revive First Solution Money Transfer]. Last Solution 2007-08-20
* [https://web.archive.org/web/20070929101347/http://www.last-solution.co.uk/first-solution-money-transfer-ltd/press-release-directors-of-first-solution-branches-on-rescue-deal PRESS RELEASE: Update from Directors of First Solution Branches on Rescue Deal]. Last Solution 2007-08-28
* [http://news.bbc.co.uk/1/hi/programmes/moneybox/6981771.stm Money transfer collapse]. BBC Radio. 2007-09-07
* [http://news.bbc.co.uk/1/hi/programmes/moneybox/6984924.stm Agents bid to buy First Solution]. BBC News. 2007-09-08
* {{cite news |title=Central Bank of Bangladesh Streamlines Drawing Arrangement Rules To Avoid Risks |url=http://www.allheadlinenews.com/articles/7008772287 |newspaper=All Headline News |date=2007-10-09}}{{dead link|date=December 2016}}{{cbignore}}
* [https://archive.today/20130505080059/http://www.theasiannews.co.uk/news/s/1018585_delays_in_money_transfer_causes_panic Delays in money transfer causes panic]. Asian News. 2007-10-04.
* [http://www.oldhamadvertiser.co.uk/news/s/233/233293_panic_over_transfer_of_local_funds.html Panic over transfer of local funds]. Oldham Advertiser. 2007-10-10.
* [http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED31%20Oct%202007%2018%3A07%3A43%3A347 Rescue deal 'near' for collapsed First Solution money transfer firm]{{dead link|date=June 2016}}. East London Advertiser. 2007-10-31.
* [http://www.eastlondonadvertiser.co.uk/content/towerhamlets/advertiser/news/story.aspx?brand=ELAOnline&category=news&tBrand=northlondon24&tCategory=newsela&itemid=WeED16%20Nov%202007%2023%3A46%3A42%3A960 First Solution assets go for £30,000 in deal with Liquidator]{{dead link|date=June 2016}}. East London Advertiser. 2007-11-16.
* [http://news.bbc.co.uk/1/hi/programmes/moneybox/7099852.stm Anger at First Solution payments]. BBC News. 2007-11-17.
* [https://www.theguardian.com/business/2007/nov/25/businessandmedia Bangladeshis may sue over First Solution]. The Guardian. 2007-11-25.
* [https://web.archive.org/web/20070929101341/http://www.last-solution.co.uk/first-solution-money-transfer-ltd/insolvency-practitioners-for-first-solution-need-help-from-victims Insolvency Practitioners for First Solution need help from Victims]
* [https://web.archive.org/web/20070926224353/http://www.allheadlinenews.com/articles/7007813876 Bangladesh's Eight Banks Asked To Submit Transactions Reports On England-Based Company]
* [http://nation.ittefaq.com/artman/publish/article_37236.shtml Falu’s friend Fazal in hiding: Millions of taka embezzled: Probe starts]
* [http://www.thedailystar.net/2007/07/03/d70703012315.htm BB for tougher strategy to check money transfer scam]
* {{usurped|1=[https://web.archive.org/web/20070927215708/http://www.southasianmedia.net/cnn.cfm?id=403453&category=Economy&Country=BANGLADESH Banks asked to hold security money]}}
* [http://www.thefinancialexpress-bd.com/index2.php?page=detail_news&news_id=3010 BB probing misuse of funds by UK-based company]
* [http://www.greenparty.org.uk/news/3052 Greens call on Government to investigate money transfer scam]
* [https://web.archive.org/web/20070927005245/http://www.respectcoalition.org/?ite=1487 First Solution Money Transfer Collapse]
* [http://nation.ittefaq.com/artman/publish/article_37310.shtml Overseas remitting system shaken]
* [http://www.thedailystar.net/2007/07/04/d7070401097.htm BB asks banks to find ways to pay clients]
* [https://web.archive.org/web/20070819112426/http://www.ukasian.co.uk/Money-And-Business/First_Solution_Goes_Bankrupt.asp First Solution Goes Bankrupt]
* [https://web.archive.org/web/20070929101335/http://www.last-solution.co.uk/first-solution-money-transfer-ltd/further-letter-to-stephen-timms-from-fscg First Solution Creditors Group keeping the pressure on for a full investigation]
{{refend}}

==External links==
* [https://web.archive.org/web/20070809035736/http://www.first-solution.co.uk/ Official Site] (down)
* [https://web.archive.org/web/20070905044232/http://www.last-solution.co.uk/ Help the Victim]
* [https://www.youtube.com/watch?v=KfVtMP1loZA Channel S Press Conference refuting allegations linking its Chairman to First Solution] (Language: [[Bengali language|Bengali]]/[[Sylheti language|Sylheti]])

[[Category:2004 establishments in the United Kingdom]]
[[Category:2007 disestablishments in the United Kingdom]]
[[Category:Defunct companies based in London]]
[[Category:Defunct financial services companies of the United Kingdom]]
[[Category:Foreign exchange companies]]
[[Category:Privately held companies of the United Kingdom]]
[[Category:Bangladeshi diaspora in the United Kingdom]]

First Solution Money Transfer - Revision history

imported>GreenC bot: Reformat 1 archive link. Wayback Medic 2.5 per WP:USURPURL and JUDI batch #17