Saigol family

The Saigol family was a Pakistani industrial family whose fortune began in textiles and which, according to the Kerry-Brown Senate report, was "as close to 'old wealth' as existed at the time within Pakistan's commercial class." Agha Hasan Abedi held the family's account at Habib Bank, United Bank and the Bank of Credit and Commerce International (BCCI) in turn, and by 1990 the family owed BCCI 44 million dollars.¹²

Origins

According to the Pakistani columnist Ikram Sehgal, the Saigols were Awans from the village of Khothian, later renamed Saigolabad, and set up a rubber shoe factory in Calcutta in 1930. As civilian contractors for the wartime logistics centred in Calcutta during the Second World War they "became fabulously rich." They planned their first textile mills in Calcutta at the partition of 1947; on the personal intervention of Muhammad Ali Jinnah the machinery was moved to Pakistan to set up the Kohinoor Textile Mills at Faisalabad, and Nasim Saigol later claimed that the first letter of credit opened with the State Bank of Pakistan was for the mills. The group was owned jointly by three of the four sons of the founder, Amin Saigol: Yusuf, Bashir and Sayed. The fourth, Gul Saigol, stayed in India in 1947.³

Habib, United and BCCI

The Senate report described the Saigol group as "one of the major industrial and trade groups in Pakistan by the mid-1950's." Abedi "first secured the Saigol account while at Habib, and took the account with him when he left to form United Bank, making the Saigol's United's principal shareholders." At the time, "some in Pakistani's commercial community wondered how Abedi had managed to take the important Saigol relationship from the Habib Bank. Thirty years later, Price Waterhouse was to detail the reason," namely "Abedi's willingness to reschedule millions in loans to the Saigols whenever they found it inconvenient to repay them." The report cited Price Waterhouse's "Problem Loans" reports to BCCI of February 14, 1990, and a BCCI Task Force Report on the Saigols.¹

According to the report, "the nationalization of Pakistani banking which provided the impetus for BCCI also insured that BCCI would retain the Saigol relationship, as a substantial portion of their businesses were also nationalized by Bhutto in 1972." BCCI gave the Saigols and the Gokal brothers "the freedom to defer repayment of past loans and to borrow new money at will," and "a special privilege similar to that afforded BCCI's own officers: when something went wrong and they lost money, BCCI would help them cover it up."¹

The 1990 Audit

In the new audit reports that began reaching BCCI's acting head, Swaleh Naqvi, in February 1990, Price Waterhouse found that there was no evidence that the Saigols' loans or interest on them were being repaid, and that BCCI had lied to the auditors about the family's accounts. The auditors wrote: "Representations previously given about the beneficial ownership of companies to which new loans were extended in Bahrain in 1989 have been false. The loans have been given, in part, to repay delinquent loans in other locations." The same audit raised problems with the lending to the BCCI shareholders Ghaith Pharaon, the bin Mahfouz family and members of the Abu Dhabi royal family.²

The Split

According to Sehgal, the Saigol group divided in 1976 among sixteen male descendants and afterwards operated as four groups: the Saigol group of Nasim Saigol, the Mohib group of Rafiq Saigol, the Kohinoor group of Tariq Sayed Saigol, and a smaller Iqbal Saigol group.³