Mr Sipra, who has been living in Pakistan for many years, was arrested by City of London Police last month at Gatwick Airport after a flight from Pakistan, which has no extradition treaty with the UK. A Serious Fraud Office spokeswoman refused to go into the circumstances of his surprise detention except to say he returned to the UK voluntarily. "He has been charged with theft offences relating to Johnson Matthey," she confirmed. He will appear before City of London Magistrates on Tuesday, to answer charges that he stole pounds 620,000 from the bank through his shipping operation, Eurostem Maritime.
The once famously flamboyant London-based shipowner, 53, has been held in custody since he arrived at Gatwick. "There is not a lot I can say at this stage," said the spokeswoman. City of London police referred all calls to the SFO.
A team of detectives at Bishopsgate police station in the City has dusted off the old JMB files and is busy tracing papers from the bank's spectacular demise. When JMB went down with debts of pounds 250m, Mr Sipra,was its largest customer. He ran the sprawling El Saeed group of companies and JMB made loans to companies within the group.
News of his arrest after all this time will re-open the JMB affair, which was never satisfactorily explained. The bank collapsed after Bank of England officials became concerned at the scale of its exposure to Mr Sipra and another smaller customer, Abdul Shamji.
The exact total of Mr Sipra's borrowing was never established, but the Bank of England's report into the affair, which aroused huge controversy at the time and was the first of several banking disasters that raised serious questions about the authorities' ability effectively to regulate the financial system, put it at 93 per cent of JMB's capital base of pounds 102m - pounds 92.1m. This exposure was nine times greater than the Bank's official guidelines. Mr Sipra himself reportedly said his credit was much lower, at between $30m (pounds 18.5m) to $50m.
He lived a luxurious lifestyle, with a house in Mayfair and a castle in Spain. The first ship he owned was called El Sipra. He had a chain of clothes' shops in New York called Lord Sipra and his own brand of perfume called Arrogance.
As well as fashion and shipping, he also moved into films, rescuing the Jigsaw Man, with Michael Caine and Lord Olivier and putting cash into The Bengal Lancers, which was aborted during shooting. By pure coincidence, an account of the problems associated with the shooting of that film by Stephen Weeks, the director, is due to appear on BBC Radio 4 shortly.
A large trader in commodities, Mr Sipra was behind one of the biggest deals of that period, the export of 1 million tons of US grain worth pounds 30m to the Middle East and Asia. A slump in world shipping and the coup in Nigeria hit his empire and revealed the risks JMB was taking.