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The maker of BCCI - Godfather or Mr. Nice.

The Maker of BCCI - Godfather or Mr. Nice

Passage of Shariat Bill by the National Assembly, according to Prime Minister has paved the way for establishment of Islamic order, in principle this would ensure social justice rule of law and also ensure eradication of corruption from the society, besides equal opportunities to all. Following few lines have been written regarding the controversy cropping in international and national press about the operations of Bank for Credit and Commerce International (BCCI) and conduct of Agha Hasan Abedi its founder and ex-chairman.

Mr. Humayun Gauhar in one of his articles appearing in daily Dawn of May 16, 1991 has tried to defend "Masters Of Deceit" a term used by American Time magazine for BCCI and Mr. Agha Hassan Abedi (issue of May 1, 1991). Without going into reasons for which Mr. Gauhar had come to the rescue of BCCI and Abedi, I must say that the hero of Mr. Gauhar is not a Mr. Nice as painted by him. What has been said in the Time magazine is not the outcome of malice and hatred held by western media against the so-called Financial Wizard from our sub-continent.

Mr. Gauhar cannot be unaware of the fact that financial wrongdoers and scam operators regardless of the colour of their skin, have generally not been loved by the western media. Investigative reporters have always worked very hard to expose them supporting the authorities for bringing them to book as and when case or cases relating to them come to surface. In fact opinions within Pakistan are not unanimously complimentary or flattering about the hero of Mr. Humayun Gauhar. As such it is not fair to conceal the affairs of BCCI and cryptic deeds of Abedi behind ethnic, geographical or racial screen. There can be slight prejudice against an Asian operating at International level. But this is not the sole cause.

Let us begin with the conduct and operations of Mr. Abedi, within Pakistan. He started his career as officer with Habib Bank before the partition of, India and served that institution at various stations in different capacities. Although considered to be definitely an above average executive, he was disliked by the then saiths for his tendencies for irregular conduct and rash behaviour in discharge of his duties. People in the management looked at his speedy actions with scepticism and even suspicion. He was finally made to leave Habib Bank. With the support of a well known industrialist family of Punjab, Mr. Abedi started his own Bank, known as United Bank, in 1959.

Now he had a free hand and conducive atmosphere to give vent to unscrupulous, unconventional and wild strains of his personality without any let or hindrance. To promote his newly founded financial setup he adopted the philosophy of "End justifies Means" without exercising any restraint based on morals or ethics. His officers also practiced the same approach. The end was to enhance the business, getting more and more deposits, expanding the network of branches. In this process they also gained influence in the corridors of power by giving good jobs to offsprings of VIPs in the country and senior executives of other banks, leading to the satisfaction of disproportionate EGO of Abedi.

When we look back at the political history of our country certain controversial personalities come to the mind. There is a little difference of opinion about men like Malik Ghulam Mohammad, Iskander Mirza, Choudhry Mohammad Ali and General Ayub Khan in the forming and early days of our history. These people had been responsible for the deeds that damaged our political system for which we are still paying the price for not being on the right track.

In financial sphere, in general and in banking in particular we also have a few such personalities that have harmed the very foundations of our financial system. But the name that pops up immediately and most glaringly is none other than that of Abedi. For one reason or the other a Pakistani holding average ethical principles and knowing a little about the banking in this country may not like to say it openly. However, in heart of his hearts he knows as to who is mainly to be blamed for the damage to the banking system in Pakistan. No doubt there was one other bank which "made a mark". It specialised in dealing and "deals". However, that ranked the founder of that bank mere a low second as compared to Mr. Abedi and his United Bank.

It will be rather unfair simplication to make Abedi responsible for all the ills and maladies of our system an society. But it is an established fact that his contribution in proliferation of financial graft and corruption is enormous. Any person with limited knowledge of banking history in Pakistan, and tiny pinch of sense of justice, will agree that Abedi and his team were pioneers in wheeling dealing, and under the table transactions as a matter of routine in the banking industry of the country. He encouraged his men to allure the bureaucrats by using all sorts of means and enticements to get undue favours.

Abedi later added new dimensions to the banking operations in Pakistan, when wealthy Arab Sheikhs started visiting poor brotherly countries like Pakistan with pockets full of petro-money. A special Department was created in Mr. Abedi's bank to cater to the needs and all kinds of wishes of these newly found clients. In this regard the basic and elementary principles of civilised moral behaviour, not to speak or religious mores, were shelved by him. The motto that "We bend a little more" changed into "we stoop to any level", and was practised by him in letter and spirit. Now some one who wanted to compete with him had to stoop a lot lower to gain a little bit of ground.

Then, came the nationalization on January 1, 1974. Even before that Abedi was ready to take away and sell his merchandised abroad. Through mostly clandestine operations conceived by his queer mind, most of the assets of a subsidiary based in Lebanon were diverted to form an international financial institution independent of, and unaccountable, to any national authority or agency. That subsidiary of Lebanon with emptied coffers went down the drain and could not be salvaged even by the best brain in nation's banking industry like that of Mr. Tajammal Husain. The strategy, tactics and modus operandi in running the BCCI remained the same added by a number of improvements learnt by him over the period of time in the international financial arena. Mr. Abedi did something in the field of charity and social service (hospital in London) to cover up his misdeeds. He also employed directly and indirectly some poets, writers and ex-bureaucrats including Altaf Gauhar Ayub regime fame. However, the balance sheet is not very sound or impressive. His services to civilisation and Third world have not done much social good except providing lucrative jobs to some people. Some politicians and their families were also on payroll of BCCI.

In Pakistan what Mr. Abedi did was weaken the very foundations of banking institutions. Traditions and management culture of the bank founded by him, persisted even after nationalisation. Practices and malpractices never changed. The fact, can be vouched by what appears almost daily in the press. he entire Board of Director of the bank he created in Pakistan is said to be on bail. Even others who tried to follow his example are finding themselves in deep and varied troubles.

The nationalized commercial bank founded by Abedi in Pakistan is perhaps in the worst shape compared with similar other financial institutions. It has a lot of manufacturing defects. The reason was the un-orthodox blue print, aberrant design and construction infirmities, topped by its subjection by him to extreme mishandling and abuse. It is very ironical that this manufacturer instead of being exposed and criticized, is being defended and eulogized by some.

One may not subscribe to all what has been written in the Time, but the conduct of BCCI cannot be condoned because other banks or financial institutions, also indulge in this type of misbehaviour and wrong doings. Two wrongs do not make a right. Moreover, other institutions or banks do not have the same historical background. As the crimes, misconducts or irregularities of others can not give anyone a license to do the same, and this appears to me the main line of defence in the article of Mr. Gauhar relating to BCCI and Abedi.

Let us be honest and courageous enough to call spade a spade. Do we really need an innocent child to say that king is naked in this age of freedom and democracy? Let us admit that when an institution is not established on sound foundations, and "God father" runs the show, the institution has always a tendency to go to dogs along with "God father" which is a very rare specie.

One can not agree more, with Mr. Gauhar that Abedi is a "lion" which is perhaps a more respectable nomenclature for "God father". But institutions do not need "Lions". They need "Men" who should have courage of conviction and who adhere to the basic norms and principles of business ethics. As men come and go the institutions have to live an grow in every respect.

Lastly, we would like to point out that in west it is not Abedi only, who is under attack by media. Presently there are many financial masters of deceit in the west also who are being exposed like Keating the exboss of Lincoln's savings and loans along with five colluding senators. Even the son of President Bush, Neil Bush, is under fire for financial irregularities in Salvador Thrift. So it is preposterous to say that Abedi is being criticised for being an intruder in the western banks preserve or having chocolate colour complexion.

Ethics, especially Business ethics has now come to be a major subject in business schools in United States. It may be in fitness of things, if we over here should also stop defending unethical behaviour of individuals who have done more harm than good to our country and start calling a "God father" a "God father" instead of edifying him.
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Title Annotation:Agha Hasan Abedi, founder and ex-Chairman of Bank of Credit and Commerce International S.A.
Author:Chaudhry, Maher Elahi
Publication:Economic Review
Date:Aug 1, 1991
Previous Article:Should Pakistan devalue its currency.
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