Stopping Fraud in DotAsia

Date: November 18, 2021

Subject: Stopping Fraud in DotAsia

From: “J. Emmanuel Disini” <joel disini (dotph)>

To: grace.yau@cpa-hk.hk Cc: BFC (dotasia), Maureen Hilyard <maureen.hilyard@gmail.com>

Dear Grace, 

It is with some amusement that I read the letter of Maureen. It attempts to downplay the amount of fraud going on within DotAsia, yet in and of itself it is full of fraud.  First of all,  Maureen Hilyard is NOT the Board Chair of DotAsia, even though the letter is entitled “Letter from the Board Chair of DotAsia”, and the email is signed “Maureen Hilyard, Board Chair DotAsia”.  

In an election held earlier this year, there was a tie between Mr. S of Iran and Maureen Hilyard, both receiving 5 Votes each. No run-off election has been held since. 

Since the Feb 2021 AGM, DotAsia had not had a Board Chair, and I would enjoin Maureen to refrain from calling herself the Board Chair until this issue is fully resolved. 

The letter is sent from her personal email, hilyard@oyster.net.ck, which Maureen has never used when communicating with the board. Why? That must be to avoid legal liability on the part of DotAsia.

Why is there no  Board Chair you ask? 

That is because Edmon does not want Mr.S as Chair, as that would mean more transparency.  Edmon prefers to hide the finances from the directors, as well as all the lawsuits that have been filed against him and Dotasia, so no one will know what Edmon has done and what he has been accused of doing. The DotAsia M&A, on the other hand,  *mandates* that the book of accounts is kept open at all times for the inspection of the directors, yet every request I make for financial information is blocked.  Even simple questions like “how much money does DA hold on behalf of Namesphere” are met with hostility. (I attach a screenshot from a board meeting this year with Maureen replying “you will have to sue us first” in response to such a request for information).

(2021-04-23 maureen – sue to get financials)

How has Edmon justified not having a Runoff for the Elections for Chairman for so long?

Edmon has claimed that IF Mr. S were to win the election, the Board may be subject to criminal liability, as he had told the HK Company Registry in 2018 that Mr. S is NOT a director of DotAsia! The previous Auditor as well, RSM, had not listed Mr. S as a director in its Financial Report of 2018, thus compounding our liability.  Apparently, when you lie to a bank in order to get a loan, it is a criminal offense and not just a civil offense. 

Even Edmon’s lawyer, John Brewer, in a May 13 2021 letter, concedes that Mr. S is indeed a board director:

“Although [Mr. S]  was re-elected as a director at 24 Feb 2018 AGM on 6 March 2018, DotAsia reported to the companies Registry that he ceased to hold office on 5 March 2018, whereas in point of fact he did not. Indeed he has continued to hold office continuously since 24 Feb 2019 AGM, being re-elected again in 2020.”

Even Mr. S’s identity as a director has since been restored on the DotAsia website, after its erasure in 2018 from the website.  

Unfortunately, Edmon is now inexplicably insisting that Mr. S only has Observer status, and has only had Observer status since 2018.  You as an auditor will face an important decision – do you tell the world that Mr. S is a director or just an Observer?

I attach the report of Marc Corlett, an HK and NZ barrister whom I approached to study the matter. It shows how the board is criminally liable in HK for providing false information to the HK Register of Companies.  Your company should study it as well, to better understand your liability.  (I have no business relationship whatsoever with Mr Corlett and had hoped he could help advise DotAsia out of this mess).

(2021-08-04 corlett. Counsel’s note – DA conclusions 1.pdf)

(2021-08-04 corlett. Counsel’s note – DotAsia 1.pdf)

Now, why did Edmon report to the HK Government that Mr. S was NOT a director of the company? 

Edmon claims that, in 2017, CITIC bank canceled DotAsia’s bank account and  “mortgage facility”,   largely due to Mr.S.  He did not present any documentation or communication to justify this.  He then proposed to the board, in 2018,  that Mr. S disappear from the list of directors as far as the HK Government and Banks were concerned, but to the members of DotAsia he would remain a full director, participating in all the meetings and voting as a full director. Edmon did not tell the board that such a move would be fraudulent and illegal and would have criminal implications for everyone.

Why Edmon only told us this AFTER the elections were tied in 2021, 3 years after the fact,  is a mystery. Why did he not tell the board the INSTANT he found out that we had broken a law and that we were criminally liable? Why did he not tell Mr. S BEFORE the election that he was not eligible to run? Why did he not tell the ccTLD of  IRAN in 2018 that it was no longer a full member of DotAsia? I am left wondering if there are other crimes we may be liable for that Edmon has not yet told us. 

Now as a solution to the problem,  the board decided to get an expert lawyer to explore the possibility of finding another bank that will allow us to keep Mr. S as a director (and IRAN as a full member of DotAsia).   Paying our mortgage in full was another option, as  DotAsia has always had the cash to pay. Once the loan was fully paid, we would not care anymore if CITIC  or ICBC dropped us.  We would simply use our HSBC account (which we have had for over 11 years) for regular banking purposes and tell the  HK Government the truth (about our list of directors).  Keeping our membership open to all countries is of primary importance to  DotAsia. 

But instead of giving the lawyer insight as to WHY CITIC bank had terminated our account, Edmon and Maureen seem to have given the lawyer, Anthony Neoh misleading information.  

On Oct 2021 Anthony Neoh writes: 

“In 2018, HSBC and ICBC indicated to Dotasia .. that they would not continue their banking relationship because of the presence of an Iranian national on DotAsia’s board. This came out of the blue for DotAsia“

Even John Brewer on May 2021 wrote: 

“26. I am instructed that (a) in Sept 2017 Citibank notified DA orally that following an overall review which included nationalities of its directors Citibank intended to terminate their banking relationship with DA and foreclose on mortgage facilities granted in respect of DA’s premises … “

Why would Edmon lie about  CITIC bank in 2017?  Why would  Edmon lie to Atty Neoh about being “blindsided in 2018 by ICBC” when the problem had already existed in 2017 with CITIC?  Why would Edmon tell his lawyer, John Brewer, that the bank he was dealing with was Citibank instead of CITIC? 

A little research shows us on that very month – Sept 2017 – when Edmon claimed CITIC bank had foreclosed on our loan because of ties to IRAN, we find  CITIC bank actually lent $10B to the Iranian Government!

com/articles/economy-business-and-markets/72363/iran-china-sign-10-billion-finance-deal

Not only is Edmon’s story ludicrous, but we also find that by 2019 several Chinese Banks have swooped in to provide banking services to Iran, including China Development Bank (for $15B)

https://www.arabnews.com/node/1553431

I think it is highly unlikely that Mr. S’s nationality was truly an issue to CITIC.

What then could be the real reason for CITIC’s cancellation of the DotAsia “mortgage facility”? 

Well, one clue is that Edmon has been guaranteeing the mortgage of DotAsia with CITIC since 2012 for an unlimited amount.  Why would Edmon expose himself to this kind of liability?

In 2012, the DotAsia board authorized Edmon to take out a mortgage for the purchase of a $2M office. At that time, JP Morgan was willing to give us a loan for 1.14%. 

On March 16, 2012, Rebecca wrote the board:

^“As for financing the property, JPM can actually give us a credit line based on the US$3.8M portfolio we are holding with them.  They can give us a US$2.5M credit line at a rate of Cost of Funds + 0.9%, where the current Cost of Funds ranges from 0.24% (1-mth loan) to 0.74% (6-mth loan), meaning that the borrowing rate ranges from 1.14% – 1.64%, which is a very good deal.”

Instead, Rebecca and Edmon choose a mortgage for 2.75%  in the amount of over  $1M with CITIC bank.  There was no discussion WHY they chose the more expensive loan. There was no discussion that THEY TOO might be borrowing money from CITIC.

ON April 20, 2021, Rebecca wrote the board:

Edmon and Rebecca were authorized to take out a mortgage on the property on Haiphong Road. They were not authorized to use DotAsia property as collateral for any other loan.

Edmon & Rebecca did not explain their decision to not use JPM. They did not explain their reason for not using the $4.3M in cash that DotAsia had in hand at that time to pay for the building. 

The office is probably worth $3M right now, and the loan is now less than $500k. That would mean that a Ioan in the amount of $2.5M would have been possible via the CITIC “mortgage facility”, had it still been in place.  

As an auditor, you should check to see WHO DotAsia was paying a mortgage to from 2012-2017. Was it CITIC bank itself or some other bank account? If so, whose bank account was this? You should check to see if Edmon or an affiliate of his used this CITIC mortgage facility, and what the true reasons were for the cancellation of our bank account. 

Ok – that’s enough fraud for one day.  I will answer Maureen’s other points in a separate letter. 

I’ll just leave you with a few more notes:

• The reason Maureen is the one answering, instead of Edmon, is for plausible deniability. Maureen has only been with Dotasia for 3-4 years, whereas the events she speaks of took place as far back as 2012.  If someone should counter my allegations, it should be Edmon. But he is loathe to do so as if he lies here, it can be used against him in court. 
• The previous auditor, RSM, resigned because of an audit Edmon requested them to AUDIT the DotAsia elections of January 2020. I recall there were only 14 ballots, and it was strange that Edmon contracted RSM to merely count the 14 ballots (which had been submitted by email) but had not asked them to verify the accuracy of the ballots by contacting the 14 voters. Who pays an auditor to count 14 ballots?! And why did RSM ask Edmon to not reveal the results of the audit? 

Sincerely,

J. Emmanuel Disini

CEO, DotPH

Director, DotAsia

Sponsor Member, DotAsia

Minority Shareholder, Namesphere