ICIC

ICIC (International Credit and Investment Company Holdings) was a Cayman Islands subsidiary of the BCCI.¹ It served as BCCI's repository for loans to privileged insiders.¹ The Kerry-Brown Senate Report described it not as a single company but as a group of at least eleven entities sharing the abbreviation, and recorded the finding of BCCI's Cayman liquidators that "ICIC was not really a bank at all, but a post-office box location to 'book' transactions that were initiated, organized, and approved in other parts of BCCI. In essence, ICIC was a 'conduit' or mechanism for BCCI's fraud."² In Price Waterhouse's coded draft report of June 1991 to the Bank of England, known as the Sandstorm Report, ICIC was "Fork" and BCCI "Sandstorm."²

Role in BCCI Operations

ICIC was incorporated in 1976 and became the primary entity through which much of BCCI's illicit financial dealings took place.³ It consisted of three Caymanian entities: the BCC Foundation, the ICIC Staff Benefit Trust, and ICIC Business Promotions, which collectively owned about 41 percent of BCCI itself.³

ICIC was used to conceal the bank's true ownership and financial manipulations. Billions of dollars in deposits were improperly diverted through ICIC, and it was a key mechanism for creating fictitious loans and rerouting deposits to cover losses.⁴ The worst of BCCI's account manipulation, particularly related to bad loans, was booked through ICIC.³

The Entities

The Senate report listed, among others, International Credit and Investment Company Overseas Ltd.; International Credit and Investment Co. Ltd.; International Credit and Commerce (Overseas) Ltd.; ICIC Holdings of Grand Cayman; ICIC Apex Holdings; ICIC Overseas, Cayman; ICIC Foundation; the ICIC Staff Benefit Fund; the ICIC Staff Benefit Trust; ICIC Business Promotions; and ICIC Business and Promotions. ICIC Holdings and ICIC (Overseas) Ltd. were both incorporated on April 6, 1976, the latter as an offshore bank "to facilitate the purchase and sale of BCCI shares and to provide private banking services for BCCI shareholders and customers," which also advanced money to nominees to buy interests in three other BCCI affiliates, Attock Oil, Credit and Commerce Insurance, and the Saudi Development Company. ICIC Apex Holding Ltd., incorporated on October 2, 1987, became the ultimate holding company of the group, "equivalent to a charitable trust, with the beneficiaries designated as 'mankind at large.'" The ICIC Foundation in the Cayman Islands and the ICIC Staff Benefit Fund each held BCCI shares, and each held a third of LOANS, BCCI's secretly owned Swiss affiliate, whose transfers were marked "PAY WITHOUT MENTIONING OUR NAME."²

Ownership of BCCI

A Bank of America record of BCCI's shareholders as of September 30, 1977, listed ICIC as the majority owner with 50.1 percent, Bank of America with 30 percent, Majid Al-Futaim of Dubai with 4 percent, and the ruling family of Abu Dhabi with 3.4 percent; the Senate report concluded that "the Pakistanis actually owned BCCI at a time when to the outside world, the bank was ostensibly owned by oil-rich Middle Eastern Arabs." By the late 1970s ICIC was the record holder of as much as 70 percent of BCCI, although Agha Hasan Abedi told officers that it really owned about 30 percent; because ICIC borrowed continuously from BCCI with inadequate documentation, "for all practical purposes, BCCI was repeatedly buying itself."⁵ Masihur Rahman told the subcommittee that ICIC had been described to early recruits as a "parallel organization" that would "hold shares of the bank for the founder group." Only Abedi, Swaleh Naqvi and a small circle of assistants had an overall picture of it.²

The 1991 Audit

Price Waterhouse's first detailed audit of ICIC was given to BCCI's board in draft on June 17, 1991. It found that BCCI effectively controlled ICIC and that most of its transactions were initiated on the instructions of Naqvi and two of his assistants, Mr. Hafeez and Mr. Imam. Its uses included financing BCCI's shares and capital through nominees, buy-back arrangements and guaranteed returns; routing funds to disguise their nature; and "providing guarantees, through commitments signed by BCCI management on ICIC letterhead, for various nominee arrangements for shareholders of companies secretly controlled by BCCI, such as First American through its holding company, CCAH." The Senate report put the circular transactions booked through ICIC to inflate BCCI's books at "at least $1 billion."² ICIC Overseas also held, through Ghaith Pharaon as nominee, 85 percent of the Independence Bank of Encino, for which the Federal Reserve named it in its enforcement action of July 1991.⁶ See also Credit and Commerce American Holdings.