BCCI Scandal

Bank of Credit and Commerce International (BCCI), Case Analysis

[Name of the Institute]

Table of Contents

Introduction3

Case Analysis3

Individual and Companies involved4

When and why did it happen?5

Media Attention6

Outcome of the Case8

Lessons Learned and Preventive Measures9

Conclusion11

Bank of Credit and Commerce International (BCCI), Case Analysis

Introduction

Agha Hasan Abedi, a Pakistani banker and financier incorporated The Bank of Credit and Commerce International as an important international bank in 1972. BCCI has offices in London and Karachi, and it was registered in Luxembourg. In just 10 years, the bank started its operations in more than 78 countries of the world with over 400 branches. The bank became the seventh largest bank in the world in terms of assets which measured to be 20 billion Us Dollars. BCCI was inspected by various financial agencies and regulators during 1980s, as it was claimed to be inadequately regulated. Further investigations proved the involvement of the bank in various criminal actions link money laundering, unlawful control of interest in a US bank and other prominent financial crimes(Morganthau, 1991). The key players were sophisticated international bankers whose obvious and ultimate target was to ensure the secrecy of operations and affairs, to incorporate deception and fraud on a huge scale, and to prevent detection of the commencement of the business and their actions. It was also claimed that the bank affairs were surprisingly complicated (Kanas, 2004).

Case Analysis

The founder of BCCI Agha hasan Abedi with the support of his assistant Swaleh Naqvi, were the pioneers of the impressive growth and development of the bank, which also led to its liquidation. This structure was envisioned by Abedi and was managed by Naqvi for the purpose of avoiding regulations and governmental control. Right from the start of its existence BCCI developed multiplying layer of bodies that were complexly associated with one another. These include inner dealings, subsidiaries, banks-within-banks, companies, nominee relations and affiliate (Rory, 2005). BCCI was able to avoid common legal restrictions on the mobilization of goods and capital on a regular basis, through rupturing the corporate structure, audits and record keeping. Abedi was able to develop BCCI as a, ideal device that support illegal activities of others, including government officials, making it an entity free from governmental control.

BCCI crimes include fraud by the bank and its customers involving billions of dollars, these include, money laundering in Europe, Asia, Africa and the United States. BCCI's bribery was associated with many illegal activities like, arms trafficking, prostitution management, smuggling, illegal immigration, sale of nuclear knowledge, income tax evasion, terrorism support, illegal acquisition of real estate and banks and various other financial crimes. The key mechanism in committing organized crimes by BCCI, involved fake corporations, banks secrecy and confidentiality refuge, over layering the organizational structure, use of front line personals and nominees, proposed buyback preparations, uninterrupted financial documentations among BCCI bodies like, bribes, coercion of witnesses kickback and retention of an insider to avoid legal actions by the government (BCCI's magic kingdom, 1992).

Individual and Companies involved

BCCI injected its concerns in 73 countries and was involved in payments to some ...