United Kingdom

Abacha fall-out

The storm over the Abacha affair, in which Nigeria seeks to recover up to US$4 billion that was removed from the country during the 1993-98 tenure of its former president, Sani Abacha,may have abated in the press, but it would be wrong read comfort into this temporary calm. It is merely a lull and the rumblings of official activity are there if one listens. Speaking at a conference for financial investigators on 6 November, Phillip Thorpe, managing director at the UK Financial Services Authority, said that preliminary inquiries by the regulator had revealed that of the US$219 million that the Swiss Federal Banking Commission claimed flowed from Switzerland to the UK, US$126 million flowed into a Jersey bank and the rest had entered banks in the UK. Of the US$123 million that the SFBC report identified as transfers from the UK to Switzerland, the FSA says that US$40 million came from Jersey and the remaining US$83 million from UK banks. However, the significant role played by Jersey institutions did not lessen the seriousness of the matter from a UK perspective, he added. “Our probe is looking for possible control weaknesses at banks which appear to have handled these funds. We will focus on account opening, maintenance and monitoring procedures and banks will be ordered to take immediate remedial action where problems are found. Any evidence of criminal activity will be passed to the relevant criminal prosecution authorities.” The Serious Fraud Office disclosed on 17 November that it had commenced an investigation into the affair after receiving a request for mutual legal assistance from the Swiss judicial authorities. This was followed by Credit Suisse confirmation on 6 December that the Swiss Federal Banking Commission had referred it to Swiss Bankers’ Association, the industry’s self-regulatory organisation, over the acceptance by its private banking business of US$214 million (the figure in the accounts at the end of 1999) from two of Sani Abacha’s sons. Three banks in the Credit Suisse group were among six that the SFBC said “showed in some instances serious omissions and serious individual failure or misconduct.”