TJN's Prem Sikka close to blasting open BCCI case at last

Professor Prem Sikka, a senior adviser to the Tax Justice Network, has just sent around this extraordinary email to the TJN mailing list. If this ruling holds, he will have blasted open one of the great offshore scandals in global history: that of the Bank of Credit and Commerce International (BCCI).

Sikka has been fighting this battle almost single-handedly for years, and this is an extraordinary success for him. Congratulations on getting this far.

Dear All,

I am writing to thank you all for your help in my five year legal battle to secure some information about the closure of the Bank of Credit and Commerce International (BCCI) in 1991. It was the biggest banking fraud of all times, but the UK government protected wrongdoers through secrecy. I have now had a degree of success. The court judgement can be seen here.

Last week three judges unanimously ordered the UK government to publish most of the missing information. The government can comply with this order or appeal to a higher court within 35 days. The case also establishes a new legal precedent in the UK and the government cannot easily hide behind the Data Protection laws to protect wrongdoers.

The judges said that the missing information “does contribute a very relevant element to the story as a whole”. The judges added that “we were not convinced that the public interest in maintaining the exemption [secrecy] outweighed the public interest in disclosure”.

What does the missing information show? I have not seen it as yet but the judgment provides some clues.

“The Sandstorm Report referred to the involvement of brokers who may have facilitated the manipulation of BCCI’s profits”.

“We found to our surprise that a number of companies and organisations were marked in this way, including international trading concerns and several international banks”.

“the mention of the initials of a particular nation’s investment vehicle ... the head of the nation in question, an individual who had been involved in the organisation’s business and a second individual (identified at item 51 in Confidential Schedule 2) who had taken a loan from the organisation to enable him to buy back BCCI shares”

“A detailed review of the Sandstorm Report makes it clear that, in nearly every case, the employee named held a senior position and had been identified because he or she had been involved in unlawful transactions or attempts to conceal the financial consequences of those transactions and/or serious mismanagement”.

“We were surprised to see that the Treasury sought to extend the protection of the data protection principles to information about some individuals who exercised ultimate control over the whole of BCCI’s operations and were the architects of a group-wide programme of fraud and concealment, not to mention the creation of a culture that led others with positions of responsibility within the bank to follow their lead”

The episode raises serious questions about the UK government which values secrecy to protect wrongdoers more than informing the public. It also raises serious questions about the regulatory role of the Bank of England (BoE), which authorised the cover-up. The Bank has now returned as regulator of the UK financial institutions. Can it really be trusted to come clean to parliament or the public? What else has it concealed? The case also shows how corruption is deeply ingrained in UK institutions.

Thank you all for your help without which this battle would not have been possible.

END

Congratulations to Sikka for his remarkable efforts on behalf of transparency and justice. His submission, along with a list of witness statements, is here.

For a description of the offshore nature of BCCI, see Treasure Islands. As it happens, another TJN senior adviser, Jack Blum, was a central player in breaking this case open in the first place.