'Insult to Arabs' by Bank official in BCCI case

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The Independent Online

Brian Quinn, now chairman of Celtic football club, told colleagues at the Bank of England, where he used to be head of banking supervision, that Arab businessmen were liars, the High Court heard yesterday.

Mr Quinn, who became head of banking supervision in 1986, had a "strongly held view based on his experience of Arabs" that they "would give assurances which were not worth the paper they were written on", a Bank official wrote in a memo.

His opinion is the latest disparaging comment about foreigners allegedly stated by high-ranking officials of the Bank that has come to light in the trial over the collapse of BCCI, founded by the Pakistani financier Agha Hasan Abedi.

It has already emerged that another official referred to his counterparts at regulatory bodies in other parts of the world as "wogs" in 1978.

Mr Quinn, one of the prominent former employees of the Bank who will be called to give evidence, allegedly expounded his views about Arabs in the early 1990s. A spokeswoman for Celtic FC said yesterday Mr Quinn could not comment because the case was ongoing.

At the time, the Bank was trying to persuade the Abu Dhabi government to take on regulation for BCCI, which had operations in the Gulf but which was seen by many as having its head office in Leadenhall Street in the City. According to documents read out in court yesterday, Mr Quinn decided officials from the Bank should not visit Abu Dhabi to persuade its authorities to get more involved in policing BCCI because of their untrustworthiness and because he did not want to be seen to be going on a "begging mission".

BCCI collapsed in July 1991 after an escalating blackhole was discovered in its accounts by its auditor, PricewaterhouseCoopers. It owed more than £5bn to 80,000 depositors.

Its liquidators, Deloitte & Touche, are suing the Bank for £1bn for allegedly putting depositors' money in danger by failing to monitor BCCI properly. The Bank also decided to withhold crucial information from the Treasury about the state of BCCI's finances in 1990, Mr Pollock, the creditors' QC, alleged. He cited a note written by Helen Jones, an employee of the Bank, in June 1990, which said: "Following the House of Lords debate, and the revelation that ministers may reveal what they know in the House, it was decided we would be very careful how much detailed information we passed on to the Treasury."