BCCI auditor 'tipped off': Dummy accounts were set up to deceive Price Waterhouse

Thursday 03 February 1994 00:02 GMT

AN informer tipped off the auditor of the Bank of Credit and Commerce International that dummy accounts had been set up to deceive them while they were checking the bank's financial health, the Old Bailey was told yesterday, Press Association reports.

As a result, Price Waterhouse, the auditor, reported its concern to the Bank of England and set up a task force to investigate.

'We found evidence of transactions we found to be false or deceitful. We went back to certain accounts in the light of what he (the informant) said,' Simon Chapman, a partner at Price Waterhouse, told the jury.

Mr Chapman was giving evidence in the trial of Mohammed Baqi, who is alleged to have played a vital role in helping BCCI to bump up its profits in the accounts to deceive the auditors.

Mr Baqi, 66, formerly managing director of Attock Oil, has denied conspiring to furnish false information and furnishing false information.

The prosecution alleges BCCI had good reason to want to give a glowing picture of health to its auditors.

In June 1991, the bank collapsed with 'enormous consequences around the world'. There were subsequent complaints about the bank's activities and criminal inquiries followed, here and in other countries.

Many of BCCI's activities were based in London and the case against Mr Baqi arose from investigations in the UK, the court was told.

Mr Baqi's counsel, Stephen Solley QC, suggested that Price Waterhouse 'knew a great deal about apparent criminality' at the bank by the time BCCI's 1989 accounts were made public.

Mr Chapman denied the suggestion. He said Price Waterhouse had carried out its audits in accordance with the best practise. 'We pride ourselves on our standards.'

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