Manama: Police in Kuwait have arrested a six-member Egyptian gang that brought in over 300 foreigners illegally into the country by forging official documents and raked in more than 500,000 Kuwaiti dinars in the process.

The gang used the fake documents to set up eight bogus companies, falsely claiming that the businesses were operating out of a mall.

A security guard working at the mall supported the claims and received KD350 for each bogus location contract, local daily Al Rai reported on Thursday.

The racket was uncovered when officials became suspicious about the eight companies with the same address and launched an investigation.

A probe revealed that the eight non-existent companies had recruited 303 foreign workers between them, prompting the authorities to track down those behind the racket.

The purported owners of the dubious companies, all Kuwaiti nationals, said that they were not aware of any trafficking in people and that they had leased out their licences to Egyptian nationals.

The police were able to track down the Egyptians who confessed that they had forged the contracts and that the companies did not really exist. They divulged that they used the contracts to bring in foreigners to work in Kuwait and that they charged up to KD900 for each residence permit issued to prospective employees.

The case was referred to the public prosecution for further action.

Fraudsters have been exploiting loopholes in the sponsorship system in place in most Gulf Cooperation Council (GCC) countries to make money by obtaining residency permits for foreigners lured by attractive promises of steady jobs and comfortable lives.

Under the sponsorship system, no foreigner can enter or leave the GCC, obtain work or switch jobs without the approval of his or her sponsor — a ministry, a company, an institution or an individual.

Unsuspecting workers are often cheated by recruiters in their home country who pretend to have lucrative job offers. The agents receive a commission for their services. However, once the worker is in the host country, his passport is kept with the sponsor and he is told there is no job waiting for him or that he will be paid less than promised by the recruiter. He is also told to pay a specific amount of money to the sponsor if he wants to avoid having his residency visa cancelled and being expelled.

Although the Gulf countries have been often urged to do away with the controversial sponsorship system, the business community has vehemently opposed the move, arguing it would adversely affect local economies. At the same time, sustained efforts to combat the trafficking in visas and people have not been able to root out malpractices.