Journey into the heart of a scandal: how UNOPS cheated donors, exploited the poor, and lost millions

11 May 2022 – Mukesh Kapila

The registered address of SHS Projects India Private Limited

Our world is truly inter-connected, I muse, stuck in my open-sided auto-rickshaw in the suffocating traffic jam of a Delhi highway. As my luck would have it, ‘covered’ taxis are on strike that day – 18 April –  protesting at the rise in fuel costs due to the Russian aggression on Ukraine.

A billboard advises that the temperature is 42 Celsius.  India is experiencing its hottest April  for a century.  “How can anyone live here”, I wonder, my eyeballs throbbing under the merciless sun.  My lungs burn as I hope that my facemask is doing something, not against COVID-19, but the dark fumes belching out of the truck in front.

I am visiting India after the long Covid lockdowns to see my  parents – perhaps for the last time, I morbidly think  – as they are into their nineties. In-between ensuring their booster jabs, blood pressure pill-adjustments, and my mother’s long-postponed cataract operation, I have a day spare to delve into the mysterious Indian workings of the Sustainable Investments in Infrastructure and Innovation (S3i) initiative of the United Nations Office for Project Services (UNOPS).  

My day is already complicated by the security cordon put around the India International Centre where I am staying because the President of India is visiting. I regretfully decline to meet him, in one of my other capacities as special adviser to the Indian Red Cross of which the President of India  is the Honorary President.  Instead, I google my way across Delhi to find SHS.

It is a relief to reach leafy Saket, a middle-class residential enclave of South Delhi. Overlooking a children’s park are the ‘SFS Gaurav Apartments’, where G-63 is the third-floor apartment, the  address of SHS Projects India Private Limited. But there is no name plate to show that.

Panting up the stairs brings me to a formidable locked steel gate.  The doorbell is answered after a long time by a surprised young man. I am let in and, in the time-honoured style of Indian hospitality, offered a much-needed glass of water.  The office looks rarely used as the air-conditioner is switched on for my benefit.

I ask to see the CEO of SHS India, Mr Amit Gupta and learn that he is not there and no one knows where he may be found. This is just the ‘registered’ office of SHS India, in the premises of what is the accounting firm of ‘Sanjay Rastogi and Associates’ (SRA).

 The SRA website is well-presented and attests to its law-abiding nature and how it “provides end-to-end world class services to large Indian corporates, multinational companies, SME businesses and start-ups, helping them meet their evolving audit, accounting, finance, compliance, regulatory, business growth and management requirements through our knowledge, expertise and our specialist teams & network of professionals”.  It quotes many glowing testimonials – all anonymous – from Indian and international clients including venture capital firms, share brokerages, investment funds, and others.  

As I sit with my glass of water,  I wonder if these distinguished clients actually exist, as I have a hard time imagining SRA’s numerous multi-talented specialists operating out of this small, sleepy residential apartment.   I ask for more information about one of their clients: SHS. Is this a trustworthy and reliable company that builds good houses?

My interlocutor confirms that they do the accounts of SHS but can’t vouch for the company nor answer my questions. When I ask that perhaps they can put me in touch directly with  Mr Gupta, there is silence. 

Time to deploy my cover which is that SHS has been recommended to me as I represent a philanthropist wishing to invest 10 million Indian Rupees (approx US$130,000) – and perhaps more – in social housing. (As it happens, this is actually quite true). Accordingly, I am asking pointed questions because I am conducting due diligence on behalf of my principal.  This explanation is persuasive and Mr Gupta’s mobile number is duly provided. After usual courtesies, I depart to face the hazards of Delhi’s streets.  

Calling Mr Gupta’s phone from my European mobile number is met with no response.  Why not, I wonder? An Indian friend is roped in to call from his local phone. Mr Gupta responds immediately.

Mr Gupta sounds suspicious and is evidently embarrassed at being caught off-guard. He admits that SHS is working with UNOPS – and only UNOPS. (Like everyone else in the world, he does not see S3i as a separate body however much UNOPS leadership strives to make a distinction).  Mr Gupta says that he is not seeking funding from other investors. He refuses to answer any questions on what his company is doing, including in particular, how many houses it is building. He cites “confidentiality” as the reason for not answering, and says that all questions should be referred to UNOPS.

This appears odd, to say the least, considering the UNOPS/S3i  operating model for social impact investing. This provides seed capital loan to its SHS partner who is required to leverage that to mobilise further funds.

UNOPS/S3i has refused to make public its investment policies, frameworks, and contractual details with regard to SHS globally, and why it selected this particular company without competition. 

UNOPS documents and public statements have caused further confusion on numbers – both of houses to be built and funds involved. For example, its ousted Executive Director, Ms Grete Faremo said to the June 2019 Executive Board that  “we have signed deals to build 50,000 affordable homes in the Indian state of Goa.” and other exchanges refer to a $5 million allocation to India. But Auditor observations made in 2020 refer to 100,000 housing units and an investment of $2.5 million.  Only full financial disclosure – refused so far by UNOPS on grounds of confidentiality – will sort this out.  Meanwhile, as Ms Faremo was not known for truthfulness, we take the audit observations as our basis for examination.

An inquiry to a former UN colleague, now a senior official near the top of the Indian establishment, quickly elicits the information that the Government of India has numerous social housing projects, and calculates its budgets at a unit cost of 200,000  Indian Rupees (INR) – approx. US$2500 – per affordable housing unit.

Therefore, for UNOPS’s Indian target of 100,000 housing units to be realised, US$250 million is needed. But UNOPS has provided only $2.5 (and possibly $5) million and SHS is presumably expected to mobilise the rest. Thus, it is odd to hear that Mr Gupta is not seeking other investors.

I wonder if that is because Mr Gupta already has all the capital he needs. That requires examining SHS India’s  financials which mean a digital visit to the Registrar of Companies of the Indian Government’s Ministry of Corporate Affairs.   As the website won’t accept my foreign credit card because I don’t have an Indian mobile phone to validate the online payment, an Indian lawyer friend is mobilised to pay the small fee that elicits the minimum registered information on SHS India.  A further fee of INR 942 ($12) via Company Check provides a more comprehensive report. 

SHS India (Corporate Identification Number U45309DL2018PTC336860)  is a “private limited company”, classified under the “construction” sector. It was incorporated on 24th July 2018 with authorised and paid-up capital of INR 2 million (approx. US$ 25,000).  The promotors and directors are India-based Indian nationals, a husband-and-wife team of Mr Amit Gupta and Ms Arti Jain. They own 50% of the 200,000 issued shares, each of nominal value INR 10. A third individual owning the other 50% is London-based Czech national, Martin Kucera.  But his directorship has been deactivated because he did not file his KYC (know-your-client) credentials for verification by the Indian authorities.  

SHS India documents indicate that its last annual general meeting was on 30th November 2021, and it has filed its audited accounts upto the end of the Indian financial year 2020/21  (31 March).  The records indicate that SHS India has done nothing in its 3 year 9 month history.  It shows no turnover, no revenue  and the only outgoings have been modest auditor and administration charges.  There is no mention of $5 million from UNOPS/S3i.

Thus, SHS India appears to be a shell company, created at the same time as the UNOPS/S3i housing partnership was being set up globally with SHS. A question comes to my mind: was it created just to be a conduit for UNOPS funding for India? However, there is no reference to this in its accounts. It is also odd if UNOPS was, at that earlier time, setting up to do business with a limited private company owned by a husband-and-wife team with no previous corporate history and track record of any business, let alone building houses.

Mr Gupta also appears to have been associated with six other companies, four of which have been struck off the Companies Register for unstated reasons. The other two companies associated with him that are still active are ‘WnW Global Solutions Private Limited’ incorporated very recently on 11 April 2022, and seven-year old Bau Panel Systems India Private Limited. His wife, Ms Jain, is also associated with these two companies.

A third director of the Bau India company  is Mr. David Kendrick.   UNOPS Executive Director Ms Grete Faremo and her deputy Mr Vitaly Vanshelboim met with Mr Kendrick and his daughter Daisy at a  party in Manhattan in 2015 after which an UNOPS grant of $5 million was allocated to make a pop song and video game  at   ‘We are the Ocean’, an enterprise of  Daisy Kendrick.   This preceded the subsequent association between UNOPS/S3i and SHS. It is understood that an enquiry into the UNOPS/WATO contract is also underway, though details are sketchy.

There are other puzzling aspects about SHS India. Its official filings with the Indian authorities declare that it has no parent company nor any joint ventures. This runs counter to what Mr Gupta said on the phone that they had a financial relationship with UNOPS. It also obscures the arrangement between SHS India and Singapore-based SHS Holdings Private Limited: UNOPS documentation indicates that SHS India is subject to the “compliance and governance requirements” of the overall global SHS Group which is owned by David Kendrick. It is unclear why these vital elements of information appear to have been withheld from the Indian regulatory authorities. Is that not a crime under Indian law?  

The initial tranche of houses are to be in the state of Goa. Sadly I  have no time to go there (a seaside holiday in the “Pearl of the Orient” would have been good!).  Instead, I ask local researchers to visit the social housing construction sites  to verify what houses have been built by SHS.  They report that they found nothing.  The Goa authorities  via the Goa State Urban Development Agency and Goa Housing Board confirm that there had been early contact with UNOPS/S3i/SHS and land had been preliminarily allocated but UNOPS did not follow-up.

So, with no houses built, where have the $2.5 – $5 million for India from UNOPS via S3i/SHS gone?  There is not even a hole in the ground where it may be buried! 

Why did UNOPS select Goa, the second most prosperous state for its first venture into social impact investing in India.  The question is unanswerable without UNOPS releasing its decision matrix and criteria for such investments. 

However, it could  be because it is difficult to make money out of the really poor to get the original loan back as well as a sufficient return on investment. Without this, S3i is not sustainable. So its model has to favour the relatively well-off. How does that square with the UNOPS leadership’s rhetoric on the Sustainable Development Goals, and leaving no one behind? The fundamental business premise of UNOPS/S3i needs to be questioned – only possible with a fully-independent evaluation. 

Our story does not quite end with the fantasy of thinking about affordable  housing for India’s poor while sipping an excellent Indian cocktail  under Goa’s palm trees wafted by balmy Indian Ocean breezes. As recently as late March, and despite nothing delivered under the Goa pilot project,  as well as  a donor injunction at the Executive Board to cease further investment, UNOPS/S3i was busy in Copenhagen and Helsinki designing a second social housing project in India.

This time it was in the Mumbai suburb of Thane which is among the world’s twenty top real estate locations, alongside the likes of Los Angeles,  where the rich want to invest.  

India is known for its inequalities, and there must be many poor people in Thane, and also in Goa. But UNOPS’s  social housing projects do not appear to be capable of benefitting them.

Further inquiry suggests that the Thane municipality has several slum areas and a programme of slum clearance or rehabilitation. These are always controversial as they tend to evict poor people and destroy their ramshackle shelters. This is then followed by  so-called “public-private partnerships” under which government provides title to the cleared land at preferential rates to  favoured property developers who bring capital to construct smart high-rise apartments  for richer people. These are obviously highly profitable ventures, even if they tend to make the poor homeless and force them to relocate to distant places which deprives them of their – already  – precarious livelihoods.

So, is this what UNOPS has in mind to sustain its S3i/SHS model by making money off the poor?  Is this what the UNOPS leadership intends with its S3i strategy and hoodwinked the Executive Board to endorse? This does not square – in any way – with the UNOPS mission or UN principles. The lack of transparent disclosure from UNOPS inevitably generates such suspicions.  

The $2.5 (or $5) million for India is part of the approx $60 million disbursed by UNOPS through S3i/SHS that is, in its own words, “at risk” i.e. it is unlikely that a substantive part of it will be recouped.  With a global target of one million affordable houses worldwide for the world’s poor, other UNOPS  investment allocations have gone for Pakistan,  Ghana, Guinea, Nigeria, and the Caribbean. Ongoing research indicates a pattern of similarly questionable business models and non-delivery, as in India.

Belatedly, UNOPS is waking up to the need to address these concerns. The Executive Board  has demanded the original documentation around how UNOPS leadership came to set up S3i, including its policy, strategy, and investment framework, as well as what and how due diligence was conducted, especially in relation to its principal partner, SHS. The first S3i chief executive, Vitaly Vanshelboim was put on leave in December 2021 pending inquiry by the UN’s OIOS.  His successor as ad interim CEO of S3i, Bruce McKerrow has also resigned.

Meanwhile,  the Finnish Government that hosts the S3i office has suspended its funding.  The S3i Advisory Board – appointed by Ms Faremo herself with great fanfare, including some new members just recently  – has suspended its considerations.

Ms Faremo herself is now gone: she was finally forced to resign her executive directorship of UNOPS with indecent haste over the weekend of 7-8 May.  Even UN Secretary- General Antonio Guterres who is not known for taking a stand on anything until he has to, has had enough.

Our Indian story is just a small window into the dark happenings at UNOPS. The New York Times headline put it well: “A Pot of U.N. Money. Risk-Taking Officials. A Sea of Questions.”

Whether the questions are going to be fully answered is still unclear. The UN’s own internal inquiry system via its Office of Internal Oversight Services has produced a  long overdue report which is with Mr Guterres.  Precedence suggests that UN investigation reports are often not released or heavily redacted. We can thank Ms Faremo for her last act of sabotage to limit the  scope of the OIOS inquiry and pin all blame on her former deputy Mr Vanshelboim, apart from trying the “clean up” the internal crime scene at UNOPS HQ.  

A more comprehensive, independently conducted enquiry into how UNOPS got itself into this mess, and to bring accountability to all who may be implicated is vital. This is also needed to regain trust in UNOPS and make appropriate changes to its structure, leadership, business model and processes.  

Meanwhile, beyond the former Executive Director Grete Faremo, Her deputy Vitaly Vanshelboim, and S3i Executive Director ad interim Bruce McKerrow who are either gone or as good as gone, the rest of the Senior Leadership Team that Ms Faremo personally appointed are totally discredited:  Honore Dainhi, Marianne de la Touche, Nick O’Regan, James Provenzano, Peter Browne. Other officials whose malfeasance is concerning include Kelley Swift and Hafida Lahiouel.

They are all players in the conspiracy that allowed UNOPS to stray. The agency cannot recover until they are helped to leave.   

Published by Mukesh Kapila

See http://www.mukeshkapila.org

34 thoughts on “Journey into the heart of a scandal: how UNOPS cheated donors, exploited the poor, and lost millions

  1. What an article and excellent investigations there Mukesh! If you were able to do this due diligence I wonder why those who invested in it were not able to, or didn’t do so.
    The accountability goes down to the SLT which was all hand-picked and appointed in one way or the other, all under the cover of proper HR processes on paper. This is a gang and the new ED needs to at least be very cautious in working with them. They should leave and give some life back to unops, including the corrupt PCG acting head who has played along so she gets the new position she is being now considered for.
    Let’s also not forget about the whistleblower, who has been placed on administrative leave because she spoke out about all this. This act of revenge on her alone is a sign of how bad this leadership can get. She needs to be reinstated, and with honor.
    Well done Mukesh.

    Like

  2. Thanks for all the sacrifices Mukesh! Brilliant investigation. The S3i shop must close immediately because it is nothing but a money laundering scheme for Grete, Vitaly, Honore, Jim and Marianne. You will be surprised to know who is employed there

    Like

  3. UNOPS SLT divided the millions among themselves. Our thoughts are with the whistle-blower and we pray for her safety.

    Like

  4. Accountability is in very short supply at UNOPS as we’ve been seeing past couple of months. Luckily it’s a great process to identify fake leaders. Since the so called SLT members got in charge, we have witnessed many cases of abuse of authority, retaliation and misappropriation of funds.
    UNOPS personnel in the field are commited to serve but it will be difficult to do so until the SLT pack their bags.

    Like

  5. There are no transparency measures at UNOPS. UNOPS SLT is a group of thief. I work for UNOPS in Ghana and I can confirm not even a single house was built.

    Like

  6. Great work Mukesh. UNOPS Senior Leadership must step down to allow independent investigations.

    Like

  7. I admire your determination and tenacity to expose the rot at UNOPS. I am happy to work with you and give you information.
    IOIS should go back to Copenhagen and investigate how people are hired and fired at UNOPS. IPAS HR and PCG are the most corrupt departments in the whole organization.

    Like

  8. Finally! Chicken are coming home to ….
    As Regional Advisor at that time, I requested to get more information on S3i projects in Africa. I was told to stick to my job description. Since that day my relationship with the RD turned sour. I was left with no choice but to resign.
    Well done Mukesh!

    Like

  9. Tough times for UNOPS personnel. Sponsored by Grete, Honore, Jim, Marianne and Nick.
    SG should lift the immunities and criminal charges should be laid before it is too late.

    Like

  10. UNOPS reputation is destroyed. The healing process should start with getting rid of the SLT and everyone who was involved in authorising money laundering to SHS. The organization lacks proper governance.

    Like

  11. So true, I can only echo Victor.
    What an amazing story and what an amazing day of investigations.

    This reminds me of some of the reports you can find on YouTube about phony Indian call-centers that are set up to cheat random people out of their money https://www.youtube.com/watch?v=9cwcyLvoMps

    Could that mean UNOPS has set up it’s own phony call-center operations…..

    Sempre Fi

    J

    Like

  12. Why is UNOPS hiding its S3i policies?
    They have a PQMS for everything. Why is that information the information related to S3i is only known to SLT?

    Like

  13. wow- one thinks to have seen it all but this beats it all. Now, how come that in the past, in the 90s, any contract issued required a Dun&Bradstreet check? How come this is an agency when the GA resolution is clear and this is a separate, identifiable, self-financing entity without a substantive mandate . In 2010, a vague provision on infrastructure etc. was added together with explicit mention of the entity in the Exec Board ( prior, UNOPS reported through a management coordination committee chaired by UNDP to the Board ) but the term remains entity with all that this implies. Very sad to see this for those who worked very hard because we believed in doing our part, without glamour, without needing to be front stage, to be a cost-effective, efficient backroom to further what the U.N. stands for. This was never ever meant to be the private sector. Just when you have to be self-financing, you watch what costs what and how to do your work efficiently and so UNOPS was a pure product of the standard public sector reforms many countries undertook. This is very sad and one is basically speechless.

    Like

  14. Hmmmm India….. belongs to what Regional Office? And who is the Regional Director……

    So many questions, so much to investigate…..

    Sempre Fi

    J

    Like

    1. Apparently S3i is a separate entity, not part of UNOPS. Even the Director of Regional portfolios is not ‘aware’ of what type of agreement was signed between UNOPS and SHS.

      Like

  15. We have a new IAIG Director. Carefully ‘selected ‘ but not recruited to cover all the trails.

    Like

  16. Bruce McKerrow, not Bob.

    SLT approved and signed off on the process / loans. This served as a de facto Engagement Acceptance Committee (EAC) which is used to the assess risk of entering into a new Partnership (organization under MoU, EoL or in a high risk country, as well as in contracting procedures for grants GSA, and/or PCA).

    Standard process would necessitate due diligence, an EAC and oversight and review by . Thus, in bypassing the standard process, SLT made determinations which have resulted in the issues: IPS- O’reagan, Finance & Admin- Marianne, Global Portfolios – Honore, Legal Group-Jim all have culpability, to varying degrees…its extremely difficult to accept statements of ignorance on such a massive and disgraceful result…

    Were this a PM, or a CO, heads would roll. This needs to happen to the SLT and other parties in HQ in Copenhagen, at the least.

    If as noted in various articles, the issue of overcharging donors, in combination with the s3i debacle, results in loss of revenue and in turn jobs, reputation & ability to sign new projects…this will be a multi year issue.

    Loss of revenue unequally affects Regional and Country budgets…this means personnel in Resource Centers / Country Offices will be impacted…

    How could you share a hallway, lunch table or office space with those which directly and/or tacitly caused and/or allowed this…

    Another major re-structuring will be needed…units, personnel, and LEADERSHIP.

    Lets hope that reputationally the organization can recover, the two tier personnel contracts are re-examined (FTA vs ICA).

    Godspeed.

    Like

  17. Interesting work Mukesh. The composition of the higher echelon of management and its recruitment practice bears the hallmark of network corruption, made possible due to an apparent lack of oversight. Wonder how this all looks like when the dust has settled.

    Like

  18. Bravo Mr. Kapila and NY Times. You should dig into the World Bank’s rushed award of a massive grant without soliciting an open and transparent vetting process to UNOPS for the Afghanistan crisis, just a week before the top boss resigned. No recognized government in Afghanistan has more responsibility for all of you to be more transparent and accountable to our Afghans, but no one hears our voices. The wrong deals by the bank waste taxpayers’ money going to an agency that has no accountability nor systems or respect for basic human values within the agency. https://www.huffpost.com/entry/gary-helseth-ex-un-offici_n_180230

    https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099928305062219344/idu00d06084a01511042e10b9ce02214dc3e351b

    Like

  19. I hope the memo to the ED a.i is clear!
    His job is to clean up the mess which will be impossible for him to do if Jim, Honore, Nick and Marianne are still in office.

    It is very painful to read Honore emails to PLG to keep repeating the same lies to the donors that s3i is not part of UNOPS.

    Like

  20. Mukesh, I want to assure you that not even one house was built in Guinea. The housing project was introduced to our government by UNOPS people (Mr Honore and Mr Vitaly) and since then they disappear. Some people were even promised jobs by the two gentlemen.

    We really need houses in Guinea.

    Like

  21. Martin Kucera was the executive director of the DAIKEN private family office from 2018 until October 2021.
    DAIKEN = Daisy Kendrick?

    Like

  22. This reminds me of UNOPS ghost workers for Somalia in Kenya. Salaries were paid to employees who never existed.

    Like

  23. Wasn’t Fabian Cousteau super involved in the whole We Are The Ocean debacle too? He was present at all the events back then. Not sure what he was doing behind the scenes.

    Like

  24. UNOPS and SHS arrangement does not make any business sense. This was nothing but high level corruption and fraud. It will be interesting to see the terms and conditions of the legal agreement between the two entities.

    Like

  25. So disgusting to read an email from UNOPS saying the S3i initiative is separate from UNOPS regular project activities
    If all these corruption issues have happened with the S3I initiative under UNOPS watch, how can we be assured that similar issues are not currently happening within UNOPS normal operations.

    I see UNOPS colleagues doing amazing work in the field but their management is corrupt and should step down

    Like

  26. I saw this coming ! The arrogance by some people in UNOPS is a sign that they have so much to hide. Well done Mukesh for this very brilliant investigation.

    Like

  27. Colleagues, the Swiss national TV focused on corruption, mismanagement, fraud at UNOPS Sanitation and Hygiene Fund in Geneva in this 29′ film https://www.youtube.com/watch?v=5WQUIxlbuCs which was also broadcast for the TV news at 8 PM. It focuses on the fate of UNOPS whistleblowers and UN whistleblowers in general. The UNOPS officials at stake, Dominic O’Neill, Sue Coates, Jim Provenzano are in the film. Just give it a look

    Like

  28. Unfortunately UNOPS are not the only UN agency that are mired in incompetence, waste, corruption and nepotism. The entire UN system needs over haul.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: