BCCI Scam

The Bank of Credit and Commerce International was the brainchild of Pakistani
businessman Agha Hasan Abedi, who envisioned a bank focused on the third world. It
was set up in 1972 with financial backing from Abu Dhabi, where the ruling family,
headed by the late Sheikh Zayed, was said to have a very close relationship with
the BCCI.
The emirate was the bank's largest depositor, largest borrower, and for most of its
existence its largest shareholder. Ultimately a settlement with Abu Dhabi also provided
almost half of the funds recovered for creditors.

The bank set up in the City, with offices at 100 Leadenhall Street, close to the Bank of
England, and went on to open 22 UK branches.

The rapid growth unsettled some regulators at Threadneedle Street. As early as 1982
one internal memo described BCCI as "on its way to becoming the financial equivalent
of the SS Titanic!".

However, the late governor Eddie George, above, and his bank supervisory team
persuaded themselves that ultimate regulatory responsibility for the group lay with
Luxembourg, where the bank was incorporated.

This decision led liquidators to sue the Bank of England, alleging regulators had acted
with malicious recklessness. The action was a costly disaster, most notable for a 119-day
speech — thought to be the longest in British legal history — delivered by counsel for the
Bank Nicholas Stadlen QC. The claim was ultimately abandoned, with BCCI creditors
bearing the Bank's £74m costs as well as a £57m legal bill for its own legal team.
The name of BCCI has been echoing around Britain's civil and criminal courts almost
continually for two decades. In 1997 Abbas Gokal, one of BCCI's biggest customers and a
close friend of Abedi, was convicted by the Serious Fraud Office and sentenced to 14
years in jail. He was released early in 2003 by the Home Office, despite failing to meet
the terms of a £3m confiscation order against him.

Abedi died in 1995 in Pakistan having never faced trial despite charges against him in
the UK. One of his alleged key allies in fraudulent activities was said to be Saudi Arabian
businessman Ghaith Pahraon, above. The son of a Saudi ambassador to Europe, he
remains wanted by the FBI and US tax authorities. Deloitte liquidators had been close to
extracting a settlement from him, but he wanted assurances from the US that he would
not face a jail term — which it refused to give.