ArticlePDF Available

Using freedom of information laws to frustrate accountability: Two case studies of UK banking frauds

  • University of Sheffield and University of Essex


Freedom of information laws can arguably enhance public accountability of policymakers and check unethical and corrupt behaviour by the state and corporate elites. This paper provides case studies relating to the affairs of two fraud-infested banks in the UK. The information was secured through a direct engagement with ministers, courts, judges and the state apparatus via freedom of information laws. The cases draw attention to the politics of public accountability and show the difficulties encountered by anyone seeking information about banking frauds. The cases show that the state apparatus goes to considerable lengths to shield elites from public scrutiny.
(Paper published in Accounting Forum, Vol. 41, No. 4, 2017, pp. 300-317)
Prem Sikka
University of Essex, UK
Address for correspondence:
University of Essex
Colchester, Essex CO4 3SQ, UK.
Freedom of information laws can arguably enhance public accountability of
policymakers and check unethical and corrupt behaviour by the state and
corporate elites. This paper provides case studies relating to the affairs of two
fraud-infested banks in the UK. The information was secured through a direct
engagement with ministers, courts, judges and the state apparatus via
freedom of information laws. The cases draw attention to the politics of public
accountability and show the difficulties encountered by anyone seeking
information about banking frauds. The cases show that the state apparatus
goes to considerable lengths to shield elites from public scrutiny.
Keywords: Accountability, Freedom of information, Banks, Frauds,
War is Peace. Freedom is Slavery. Ignorance is Strength1
1.0. Introduction
The dawn of modernity has been accompanied by concerns to “break up the
patches of darkness that blocked the light, eliminate the shadowy areas of
society, demolish the unlit chambers where arbitrary political acts,
monarchical caprice, religious superstitions, tyrannical and priestly plots,
epidemics and the illusions of ignorance were fomented” (Foucault, 1980:
153). Demands for public accountability are often considered to be a key
mechanism for shedding light on dubious practices, fostering democratic
governance and possibilities of greater citizen participation in public
policymaking (Sinclair, 1995; Ahrens, 1996; Hood and Heald, 2007;
Habermas, 1976; Hirst, 1994; Young, 2000; Beck, 2003; Castells, 2010). A
populist view is that in neoliberal democracies every citizen “should know the
events and circumstances that concern him, since this is the condition without
which he cannot contribute to decisions about them …” (Simmel, 1950: 337).
Due to social antagonisms, the meaning of accountability cannot be fixed in
any permanent sense and its discussions frequently appeal to contested
claims of serving the public interest. Despite disagreements, many
protagonists share the view that the public provision of information and the
right to know reasons for particular conducts and hold decision-makers
responsible for their actions enhances accountability and possibilities of
democratic governance (Roberts, 1991; Broadbent and Laughlin, 2003).
The state is a key actor in fostering frameworks of accountability and its
credibility rests upon claim that it advances the collective welfare of its
citizens, often referred to as the public interest, and is accountable to the
people. Its legitimacy is bolstered by promises of eroding secrecy and
providing meaningful information to citizens about the conduct of public policy.
Therefore, in principle, it can be mobilised to investigate corporate collapses,
frauds and accounting/auditing failures and inform citizens about the conduct
of public policies. However, much of the state generated information remains
1 George Orwell, Nineteen Eighty-Four, London: Penguin, 1954 (first
published in 1949 by Secker and Warburg).
private and its non-availability thwarts attempts to check on the efficiency,
effectiveness and responsiveness of policymakers. In the case of the United
Kingdom (UK), most Cabinet papers have remained secret for around 30
years and their selective release depends on political prejudices. The UK is
characterised as a pluralist democracy (Hall and Soskice, 2001), but has a
“powerful and persistent culture of secrecy reflecting the basic assumption
that good government is closed government and the public should only be
allowed to know what the government decides they should know” (Ponting,
1990: 1). The organised secrecy not only shields politicians and civil servants
from parliamentary and public scrutiny, but also protects economic and
business elites enmeshed in public policymaking (Cousins, Mitchell and Sikka,
1993). In the absence of public information, people have often relied upon
whistleblowers and conscientious objectors to bring some damning
information to the public domain and fuel debates about the accountability of
public policymakers (Ponting, 1985).
The faultlines between the citizens’ right to know and the tendency of the state
to advance private interests behind a veil of secrecy have given rise to the
politics of establishing new ‘regimes of truth’ culminating in freedom of
information laws to control the flow of the state held information to citizens.
Following persistent criticisms (Bennett, 1985; Vincent 1998; Birkinshaw,
2010), the UK enacted the Freedom of Information Act 2000 (hereafter FOIA)
to regulate the release of the state held information to the public. The FOIA, in
principle, enables citizens to interrogate official documents relating to
corporate collapses, frauds and accounting/auditing failures to build a richer
picture of politics of regulation. However, critics claim that the FOIA is unlikely
to “limit the deception and deliberate misinformation” (O’Neill, 2002; Brooke,
2010) as the neoliberal state is unlikely to be able to reconcile the tensions
between public information and the desire to protect privileged elites by
withholding information.
The tensions between neoliberal concerns about providing information to
empower citizens and impulses to secrecy to protect elites can be examined
with case studies that explore the capacity of the state apparatus to deliver
the promised openness and accountability (Broadbent and Laughlin, 2003).
The operations of the UK’s freedom of information laws provide such a site.
This paper contributes to the literature by providing two case studies showing
how calls for public accountability are arguably frustrated by government
departments. The case studies are constructed from a direct engagement with
ministers, lawyers, courts, judges and the state apparatus through the
freedom of information laws. The research may loosely be described as
‘action research’ (McSweeney, 2000) where an inquiry is regarded as a
dynamic process and a response to the problems encountered rather than the
application of some predetermined set of rules. Such engagements are
framed by situated understandings of the material in hand, the importance of
the issues, reflexivity of analysis and a range of unexpected outcomes and
pragmatic values.
The freedom of information requests were made in late 2005/early 2006 and
were informed by concerns about regulation of banks. For example, by the
late 2005 newspapers carried stories of the bursting of the housing bubble
and a possible crisis for some banks. This had echoes of the mid-1970s
secondary banking crash, which revealed fraud and audit failures (Reid,
1982). The state managed the crisis by appointing inspectors to investigate
the collapses. One of these related to Ramor Investments Limited (previously
known as Bryanston Finance), which owned a secondary bank (UK
Department of Trade and Industry, 1983). The inspectors’ interim report
criticised directors and auditors, but the final report remained unpublished
(Sikka and Willmott, 1995). The unpublished report had the potential to
provide insights into the politics of regulation and, therefore, became the
subject of a freedom of information request. The second request related to the
closure of the Bank of Credit and Commerce International (BCCI), considered
to be the world’s biggest banking fraud of the twentieth century (Killick, 1998,
p. 151). Despite anti money laundering legislation, UK-based banks have
continued to enable elites to launder illicit funds (US Senate Permanent
Subcommittee on Investigations, 2005; UK Africa All Party Parliamentary
Group, 2006). These instances echoed the operations of BCCI which had
pleaded guilty to fraud and money laundering. BCCI was closed by the Bank
of England in July 1991 (Bingham, 1992), but its closure has remained
shrouded in secrecy. Prior research (Arnold and Sikka, 2001; Mitchell et al.,
2001) had identified some gaps in publicly available information, most notably
a report codenamed the “Sandstorm Report”. It was prepared by BCCI’s
auditors Price Waterhouse and enabled the Bank of England to justify closure
of the bank (Bingham, 1992; United States, Senate Committee on Foreign
Relations, 1992). The freedom of information request, therefore, sought
access to the Sandstorm Report.
This paper is organised in four further sections. The first section highlights
some complexities and contradictions in the policies of the state, which
arguably could enhance and/or frustrate accountability. The second section
provides a brief over view of the UK freedom of information legislation. The
third section provides the two case studies relating to the banking frauds. The
fourth section concludes the paper with some discussion and reflections on
the case studies.
2.0. Accountability and the State
The freedom of information laws are part of the processes that construct the
feeling that the state apparatus is accountable to the people and that its inner
workings can be scrutinised by citizens to ensure that it advances the broader
interests of the general public. Such logics are frequently invoked by
government officials. For example, in enacting the FOIA legislation, the UK
government claimed that the “Act has profoundly changed the relationship
between citizens, and their elected representatives and the media on the one
hand, and the Government and public authorities on the other. It has, as
intended, made the Executive far more open and accountable. The Act
provides a regime for freedom of information which is one of the most open
and rigorous in the world2”. However, the meanings of the terms such as
“open” and “accountable” are contestable and cannot easily be fixed in any
permanent sense.
2 Hansard, House of Commons, 24 February 2009, col. 153
The public administration of contemporary societies takes place in
bureaucratic organisations characterised by rationalisation, calculation,
efficiency and predictability (Weber, 1948; 1968). Government departments
operate through hierarchical structures and management is primarily based on
expert training and written rules. Civil servants are inculcated into the ethos of
government departments and their career advancement depends on
compliance with formal and informal rules. They advise ministers and
policymakers and shape public choices. The resulting written documents have
a potential to provide insights into the data and values used in policymaking,
as well as the processes and outcomes involving a variety of political and
economic calculations (Hennessy, 2010). Historically, the documents have
been accessible to a select few and the state officials have not been obliged
to provide the same to the public, unless governments choose otherwise.
Much of the freedom for information lobby is driven by the claims that public
availability of official documents will enhance democracy and public
accountability, curb unethical behaviour and improve public policy-making
(Bennett, 1985; Vincent 1998; Birkinshaw, 2010). However, the documents
are prepared and held within an organisational context and policymakers may
not necessarily welcome public exposure. Some may develop diverse
strategies for resisting, or obfuscating the release of the information.
The public availability of information may show governments to be responsive
to citizens’ needs, or can equally demonstrate that they are poorly equipped to
deal with the challenges. Once the information is widely available and
dissected, informed citizens can construct counter accounts to challenge the
official narratives and pose unsettling questions. The public availability of
information can enable citizens to manage risks and uncertainty by factoring
predictability of government policies into their calculations. Consequently,
stakeholders may be able to build informed models and be in a position to
support and/or oppose likely policy changes. The public availability of
information has the capacity to discipline policymakers because a public
scrutiny can highlight illegal and unethical practices fuel demands for change.
Faced with the likelihood of public exposure, policymakers may seek to shift
blame for questionable practices, or may even deny that they were briefed
about the possible negative outcomes of their policies. As a critical public
scrutiny can unsettle the sense of predictability instilled into a bureaucratic
system, it may persuade government officials to withhold information or
release it selectively. The secrecy may shield ministers, government
departments and elites from scrutiny, but also has the capacity to erode trust
and foster a legitimacy crisis (Habermas, 1976). The extent of contradictions
and complexities depends on local histories, politics and institutional
structures (Ellington, 2011).
The tendencies toward relative openness are shaped by the competing
pressures for legitimacy and the mutual dependence of state and capital. As
the ultimate guarantor of capitalism, the state manages the inherent crisis by
instituting policies to stabilise or displace the crisis (O’Connor, 1987). These
policies may require investment in public goods, bailouts of banks,
investigation of corporate collapses and frauds, or promises of releasing
official government documents to reassure citizens that the state is
accountable to them. However, policies for greater openness or transparency
need to have regard for corporate interests. This constraint arises from the
nature of neoliberal politics. The neoliberal state is dissuaded from directly
owning the means of production and is obliged to rely upon tax revenues
levied on profits, wages and consumption, which are largely dependent on
private capital (Offe, 1984). Therefore, the state’s own survival is dependent
on the long-term welfare of capitalism and the two are interdependent for their
mutual reproduction. The mutual dependence is intensive in many fields and
is highly visible in many industries, such as the defence industry. The state
relies upon corporations to secure its position in a hostile nation-state system
and in turn the defence industry relies upon the state for its profits. The
dependence is not necessarily confined to domestic capital as in a globalised
economy capital roams the world in pursuit of profits. For example, the
presence of foreign banks can stimulate local investment, credit, jobs and
financing of exports. These factors then become enmeshed in relations with
other states and weigh upon policies of openness which may appease
domestic constituencies, but can unsettle some fractions of capital and
international allies. At the same time, the state cannot afford to be seen to be
nakedly privileging corporate interests as that can erode its claims of being a
neutral adjudicator of social conflicts. Therefore, it may bolster its legitimacy
by making some concessions and one of these may be to process demands
for a kind of openness which regulates the flow of information to the public.
The state seeks to forge alliances with elites whose expertise is assumed to
be helpful in displacing or managing the inherent crisis. This enables some
elites to acquire an insider status and a position to influence public policies
and shape perceptions of the kind of information which may or may not be
released to the public. For example, the UK state has failed to develop in-
house structures for investigation of major corporate collapses and thus
reassure the public that capitalism is not corrupt. It has been persuaded to
see frauds through the lens of accounting and has often delegated the
investigation of corporate frauds to partners of major accounting firms (Sikka
and Willmott, 1995). This may serve some administrative purposes, but also
gives leading accountants easy access to the state apparatus and create
possibilities of advancing interpretations of what may or may not be in the
public interest, or the documents which may be released to the public.
The notions of transparency and public accountability are mediated through a
complex web of relationships enmeshing the state, capital and elites. Elites
have numerous opportunities to influence policies and practices relating to the
release of the state-held information. For example, corporate funding of
political parties enhances corporate access to policymakers and influence
policies (Palast, 2002). The privatisation of public enterprises and the reliance
on the private sector to provide public goods has also strengthened the links
between the state and economic elites (Pierson, 1994). In addition, through
revolving-doors, executives from major corporations are frequently seconded
to government departments and many former and potential ministers are hired
by corporations (Mitchell and sikka, 2011). The links between governments
and corporations increasingly blur the distinction between the state and the
private sector and fuel the suspicion that the state is captured by big business,
or advances the interests of a dominant class. Government policies which
enable some insiders to have access to information, but deny it to others
enhance uncertainty for many citizens and erode confidence in the political
system. Such pressures may be managed through the enactment of freedom
of information laws to control flow of information.
The calls of greater transparency and information frequently underestimate
the capacity of bureaucratic systems to engage in creative or grudging
compliance which uses the law to obstruct inquiry and exhaust the energies of
inquirers (Hood and Heald, 2006). The documents may be written in an
arcane language designed to protect and shield the originators of documents
rather than inform the public. Thus, transparency may not easily be equated
with effective communication. Even the practices designed to enable the
public to secure the information are likely to be immersed in legalistic jargon
that overwhelms the desire to obtain information. The proponents of freedom
of information hope that it will change the culture of government departments,
but sceptics argue that “the probability that the adoption of an FOI [Freedom
of Information] law will lead to cultural change or improve trust is small.
Experience has shown that the governing institution in Westminster systems
are particularly resilient and capable of rejecting alien transplantation such as
FOI laws, or of developing new routines designed to minimize the disruptive
effect of these new laws” (Roberts, 2006:108). The case studies in the later
parts of this paper will shed light on some of the practices of government
departments and the state apparatus designed to regulate them.
The next section provides a brief overview of the UK’s freedom of information
3.0 The Freedom of Information Legislation
The UK’s Freedom of Information Act (FOIA) 2000 created a public right of
access” rather than a “right to know” the information held by public authorities.
It came into force on 1 January 2005. Within the FOIA, the term ‘public
authorities’ refers to public bodies which exercise public functions. It applies to
over 100,000 bodies including government departments, local councils, police,
hospitals, schools and family doctors. Each of the public authorities is required
to have administrative systems to enable it to meet its statutory obligations.
The FOIA grants the right to access to all individuals, including people living
abroad, non-UK citizens, lobby groups and commercial organisations. The Act
is retrospective and requests can be made for information held before its
enactment even if the body is not the originator of the information (UK House
of Commons Library, 2004). The requests must be in writing and applicants do
not need to give a reason for seeking information. Most requests are free but
government departments can refuse requests if the costs of providing the
information exceed £6003. The limit for other public bodies is £450. All public
authorities are expected to respond to a request within 20 working days. The
Act is administered by the Information Commissioner’s Office, whose mission
is to “uphold information rights in the public interest, promoting openness by
public bodies and data privacy for individuals4.
The concept of “the public interest” is central to the FOIA though the
legislation does not define it. It is content to let the concept evolve through
practice. In responding to requests for information all public authorities are
expected to have regard for the public interest. A guide to accompanying the
legislation (Information Commissioner’s Office, 2006) provides an indication of
the factors which may be considered in assessing whether the public interest is
served. These could relate to furthering the understanding of and participation
in the public debate of issues of the day, promoting accountability and
transparency by public authorities for decisions taken by them, promoting
accountability and transparency in the spending of public money, allowing
individuals and companies to understand decisions made by public authorities
affecting their lives and information affecting public health and public safety.
The public authorities can withhold information by invoking any of the twenty-
three public interest exemptions, which are categorised as absolute
exemptionsand qualified exemptions’. Absolute exemptions(Sections 21,
3 The Freedom of Information and Data Protection (Appropriate Limit and
Fees) Regulations 2004.
4 ICO website -; accessed 7 January
23, 32, 34, 40, 41 and 44 of the FOIA 2000) cover seven distinct areas and
apply to matters where there is no legal right of access to the information, or
the information relates to security matters, parliamentary privilege, court
records, personal information, information provided in confidence or generally
prohibited by law, or the information is available through other means. The
second category ‘qualified exemptions’ covers sixteen distinct areas (Sections
22-24, 26 -31, 33, 35-38, 40, 42 and 43 of the FOIA 2000.). It requires the
public authority to consider whether the balance of public interest lies in
releasing and/or withholding the public information. This would depend on the
circumstances of each case and may be influenced by common law
precedents. Qualified exemptions relate to matters intended for future
publication, national security, defence, international relations, relations within
the UK, the economy, investigations and proceedings, law enforcement, audit
function of public authorities, formulation of government policy, prejudice to
effective conduct of public affairs, communications with the monarch and royal
family, health and safety, personal information, legal professional privilege
and matters of commercial interest. Some of the above may be characterised
as ‘Classexemptions and protect all the information in that category. For
example, information subject to legal-professional privilege would be
protected in its entirety. The remainder may broadly be characterised as
Prejudice-based exemptions. A good example of this is the international
relations exemption where a public authority could argue that the release of
the information could prejudice international relations with one or more states.
The withholding of information may lead to disputes and the FOIA provides a
stepped process for resolution. In the first instance, individuals can request an
independent internal review (section 50 FOIA 2000), effectively inviting the
public authority to reconsider its decision. The internal review is expected to
be completed within forty working days and would normally be carried out by
individuals not associated with the initial decision to withhold information. If
this process does not resolve the dispute then the concerned individuals can
invite the Information Commissioner to adjudicate the dispute. If the
Commissioner is so persuaded he may investigate the matter and seek
explanations from the public authorities and sight of the disputed information.
Following an investigation, the Commissioner would publish a Decision Notice
to explain his conclusions and make recommendations, which might support
the public authority, the complainant or something in-between. He may also
praise the public authority for good practice, or admonish it for breaches of the
Act and issue enforcement orders.
The parties may dispute the Decision Notice issued by the Information
Commissioner and take the matter to the next level. The first port-of-call is the
Information Rights Tribunal’ (previously known the Information Tribunal). This
is a panel composed of the Tribunal Judge and two other non–legal members,
all appointed by the Justice Department. The appeal has to be lodged on an
official form within 28 days of the Decision Notice. The parties can choose to
have an oral or a paper-based hearing, though the judges can override the
choices made by the parties. Both parties can use legal experts to advise
them, or can represent themselves in person. In the first instance, cases are
heard by the First-tier Tribunal (FTT). Following the FTT decision, the parties
may appeal and can seek permission to take matters to a higher court, known
as the Upper Tribunal. In principle, depending on the legal issues, matters can
reach the Supreme Court. The level of escalation inevitably involves legal
ramifications and also the danger that a case may be declared “vexatious
and that costs may be awarded against the parties (Brooke, 2010). The
judges can also award costs against either party for unreasonable behaviour.
4.0.0 Two Case Studies
This section provides details of two case studies constructed from responses
to the freedom of information requests. The first relates to attempts to secure
an unpublished report relating to the demise of Ramor Investments Limited
(formerly Bryanston Finance Limited), a secondary bank that became subject
to a government investigation in 1975. The second relates to attempts to
secure the Sandstorm Report, a report which arguably played a major role in
the Bank of England’s decision to close BCCI.
4.1.0. Ramor Investments Limited (Formerly Bryanston Finance Limited)
4.1.1. Background
On 12 May 1975, the UK government appointed inspectors to investigate the
collapse of Bryanston Finance Limited (on 25 October 1975, it became Ramor
Investments Limited). Bryanston was the parent company of National Union
Bank Limited, a secondary bank registered in the Bahamas, but operating
from London. The Ramor investigation cost5 the UK taxpayer £760,301. The
inspectors submitted an interim report in December 1981, which was
published on 22 March 1983 (UK Department of Trade and Industry, 1983).
The report provided evidence of fraud and false accounting and concluded
that the company chairman “was unwilling and unable to distinguish between
the assets of a public company and his own pocket” (p. 392). Another director
was described as “a devious and unscrupulous man” engaged in “an obvious
fraud” (p.392). The report was highly critical of Price Waterhouse, Bryanston’s
auditors. It stated that auditors knew of “false accounting” (p. 278) and should
have qualified the accounts “on the grounds that proper books of account had
not been kept” (p. 279). Auditors walked away quietly without full disclosure to
the incoming auditors. Prior to the annual general meeting called to hear
matters relating to auditor resignation Price Waterhouse audit partner Peter
Ainger wrote to the chairman of the company to explain how he would avoid
answering searching questions (p. 283). Subsequently, a disciplinary panel of
the profession reprimanded Price Waterhouse for nine serious errors of
judgements and the firm was ordered to pay £273,000 towards the cost of the
hearing (The Times, 25 February 1987). Audit partner Peter Ainger was
criticised by name. An interesting aspect of the above episode is that whilst
under investigation Price Waterhouse partner Peter Ainger was
simultaneously acting as an inspector for the UK government, investigating
other frauds and audit failures (UK Department of Trade and Industry, 1981).
The inspectors’ final “11 page” report was submitted to the Department of
Trade and Industry on 11 December 1987, but has remained unpublished (UK
House of Commons Trade and Industry Committee, 1990: 221). In 1990, in
evidence to a House of Commons Trade and Industry Committee hearing,
one of the inspectors described the non-publication of the final report as
5 Hansard, House of Commons Debates, 22 November 1991, col. 347.
“disturbing”. The reasoning given by the Minister for non-publication was that
there has been no public interest in the investigation … publication at this late
stage will serve to revive memories of the disciplinary proceedings taken against
Price Waterhouse” (UK House of Commons Trade and Industry Committee,
1990: 221-222). Subsequently, the Minister informed parliament that “Two of
those criticised in the Ramor report made representations against publication
of the final report. It would not be proper to go into further detail6”. When
asked to “make a full statement to the House [of Commons] on his decision
not to publish the final report on Ramor Investments”, the Minister replied,
“No7”. In a subsequent question he was asked “the date on which he became
aware that one its inspectors [Peter Ainger] was being investigated”. The
Minister replied, “I cannot say8”.
4.1.2. The Request for Information
On 18 November 2005, Prem Sikka requested the release of the unpublished
Ramor report via an email to the Department of Business Innovation and
Skills (DBIS9). It also requested the release of the record of meetings, notes
and correspondence relating to the report. The DBIS replied, electronically
and through post on 20 December 2005, and said that “the report you have
requested has not been located and so I must conclude that the DTI no longer
holds a copy of the final report to which you refer.” The letter was
accompanied by some documents which were already in the public domain
and formed part of a previously published paper (Sikka and Willmott, 1995).
These included extracts from the House of Commons Trade and Industry
Committee’s inquiry into government commissioned investigations into
companies (UK House of Commons Trade and Industry Committee, 1990),
texts of some parliamentary questions relating to Ramor Investments and some
correspondence between the Minister and Austin Mitchell MP. They provided
6 Hansard, House of Commons Debates, 20 July 1993, cols. 131-132.
7 Hansard, House of Commons Debates, 22 November 1991, col. 343.
8 Hansard, House of Commons Debates, 29 January 1990, cols. 5-6.
9 The Department of Business, Innovation and Skills (DBIS) was formed in
June 2009. At various times, it has been known as the Department for
Business, Enterprise and Regulatory Reform (BERR), the Department for
Trade and Industry (DTI) and the Board of Trade (BoT).
no clues about the contents of the unpublished (now missing) report, but the
letter added that the Department holds
further information covered by your request, which takes the form of
background notes prepared by officials in relation to Parliamentary questions.
it has been decided not to release this information to you. In doing so, the
Department relies on section 35 of the FOIA”.
The DBIS invoked ‘qualified exemptions’ contained in the FOIA to support its
position and added that:
“The impartiality of the civil service may be undermined if internal
advice is routinely made public. Good Government requires good
decision making and this needs to be based on the best advice
available and a full consideration of all the options. The balance of the
public interest in this case lies in withholding this information”.
The letter advised that Sikka can ask the DBIS to conduct an internal review
and if still dissatisfied, he can then invite the Freedom of Information
Commissioner to intervene.
The disappearance of the final Ramor report was puzzling as in 1991 the
Minister informed parliament that the papers were held in “store10. If the
report was destroyed then who authorised destruction of the document and for
what reasons? On 4 January 2006, Sikka asked the DBIS to undertake an
internal review of its decision to withhold the information, including the
background notes prepared by officials in relation to Parliamentary Questions,
and a copy of any relevant departmental policy document which authorised
destruction of documents. The DBIS acknowledged this request on 13th
January 2006 and on 10th February promised a substantive reply within the
next seven days or so. Eventually, on 3 March 2006, it stated that “the
decision to withhold the information you have requested will be reviewed … by
John Alty, The Director General of Fair Markets Group … target date for
competing reviews is 20 days”. The letter further added that:
10 Mr. Austin Mitchell: To ask the Secretary of State for Trade and Industry
what representations he has received seeking the publication of the final
report on Bryanston. Mr. Redwood: The papers are being recovered from
store. I will write to the hon. Member as soon as possible (Hansard, House of
Commons Debates, 22 May 1991, col. 477).
“since writing to you on 20 December 2005 some further material (filed
under the company’s previous name, Bryanston Finance Limited)
which may be relevant to your request has come to light. … This
material is being considered as part of the review … You have asked
“when was the report costing £760.301 destroyed …”. The Department
does not hold this information … I am unable to say with precision
when the final report was destroyed. Some material held by the
Department in this matter … was destroyed in 2000 and further
material in 2003 under the Department’s standard review procedures.
The implication in your question is that the Department has destroyed
(or mislaid) a document which cost this amount to put together. The
fact is that a detailed report was produced and published11
The above letter was accompanied by the DBIS Policy (two pages consisting
of eight paragraphs), dated 22 July 2004, on records destruction, which also
applied to the inspectors’ reports. Apparently, the Public Records Act 1958
authorised government departments to select records which should be
permanently preserved, or transferred to the Public Records Office or
elsewhere. The policy document explained that:
“Registered files are withdrawn from the Central Files Store by Record
Reviewers between eight and twelve years from the date of
registration. This is known as the “first review”. The files are examined
to establish if they are needed for long-term administrative use or may
be of historical value. Files retained are then selected for a further
review (“second review”) are re-examined twenty-five years after
registration. About 85% of DTI files are destroyed at first review; and
about 15% are reviewed for second review at twenty-five years. About
10% of those files given a second review survive to be deposited at
The National Archives”.
This above raised some interesting questions. The final report by the Ramor
inspectors was submitted to the Department on 11th December 1987 and a
request for its release was made on 18th November 2005, some eighteen
years later. The Ramor liquidation was not finalised until August 200712, which
could have given rise of proceedings against some individuals. If the DBIS
policy, as described above is applied then someone decided that the report
11 This is a reference to the interim report which was published in 1983 (UK
Department of Trade and Industry, 1983).
12 A notice by liquidators Baker Tilly appeared in the London Gazette (issue
58425, page 12109) on 20 August 2007.
should be destroyed after the first review even though the liquidation, which
may have given rise to prosecutions, had not yet been finalised.
On 7th March 2006 the DBIS was asked to provide a list of what it had
described as “further material”. Its reply of 4th April 2006 did not provide
details but said that “... John Alty who you will recall is the Director General
will carry out the review you requested”. In addition, the reply stated that “we
do not hold the information relating to the report being destroyed. … we are
unable to say with complete certainty whether the report was destroyed we
no longer hold a copy of the final report”.
The outcome of the internal review was finally notified to Sikka on 26 June
2006. It resulted in the release to two redacted items of information, with some
information still withheld. With regard to this withheld information, the DBIS
sheltered behind the absolute exemptions available under the FOIA by
claiming that the release of information would constitute a breach of
confidence” (Section 41) and “contravene one of the principles under the Data
Protection Act 1998”. The reviewer acknowledged that the Department has a
file containing correspondence from the Ramor inspectors, but that following
Section 31 FOIA 2000 it could not be released because the “Disclosure of this
material would be likely to have an adverse effect on how forthcoming
Inspectors might be in the future …The Department considers it important that
inspectors can communicate freely with the Department, and that they can do
so in confidence, without fear that these communications will be disclosed to
the general public”. With the above caveats, two items of “background notes”
prepared for the Minister were released. The first item (undated) justified non-
publication of the final report with advice that:
“xxxxxxxxxxxxxxxxxxxxxxx13 It was, and still is, our policy to publish
reports on pubic companies14, but Ramor ceased to be a public
13 Following interventions by the Information Commissioner (see below) the
redacted words in this paragraph were released on 29 April 2010. These were
“The final report could not be published because it disclosed details of a
confidential settlement with Inland Revenue [UK’s tax authority]”.
14 Sikka and Willmott (1995) note a number of instances where the
government appointed inspectors, but the reports were not published.
company in 1975 and public interest in Ramor dried up on publication
of the interim report in 198315”.
The ministerial adviser(s) referred to correspondence and questions in
parliament from Austin Mitchell MP and added that:
“There was also the danger that publication of the final report would
revive memories of the accountants disciplined and involve them in a
degree of “double jeopardy”. No honourable members pressed for or
against publication of the final report. Two of those criticised in the
report argued against publication”
The second (undated) item added that:
“Austin Mitchell knows that the accountant inspector in Gilgate, Peter
Ainger FCA of Price Waterhouse, was the subject of another inspection
in Ramor where he and his firm were criticised and
xxxxxxxxxxxxxxxx16. The final report in Ramor was not published (only
the interim report). Austin Mitchell suspects a cover up despite an
explanation in earlier correspondence, principally John Redwood’s17
letter dated 19 September 1991.
Technically, Sikka was entitled to a review of the decision to invoke Section
41 (see above) but was not offered one18. The 30 June 2006 review marked
the end of the processes internal to the DBIS. It is not possible for any
external party to verify DBIS assertion that the final Ramor report has been
either mislaid or destroyed. Its claims that the publication of the final report
“would revive memories of the accountants disciplined” was not considered to
be persuasive, especially as some inspectors’ reports have been published
after disciplinary proceedings against accountants have been finalised (for
15 This claim is not supported by evidence. For example, the non-publication
of the final report was queried by inspectors in the 1990 report by the
Treasury Committee (UK House of Commons Trade and Industry Committee,
1990) and since 1990 has also been the subject to questions in parliament and
letters to the relevant Ministers.
16 After further correspondence, reviews and interventions by the Information
Commissioner, the DBIS revealed that the six redacted words were “and
subsequently disciplined by the ICAEW” (letter from the DBIS, 4th June 2009).
17 John Redwood was a junior minister at the Department of Trade and
Industry from 1989 to 1992.
18 This point is later pushed by the Information Commissioner.
example, UK Department of Trade and Industry, 200119). The DBIS
acknowledged that some information relating to the Ramor investigation
existed, but was not willing to identify or release it even though it related to
events which occurred over thirty years ago. In the absence of the final report,
perhaps the DBIS should release whatever information it held. It was decided
to refer the matter to the Information Commissioner.
4.1.3. The Information Commissioner
On 2 August 2006, Sikka invited the Information Commissioner to intervene in
the dispute. On 23 August 2006, the Commissioner replied stating that “your
case has been allocated to one of our case resolution teams who will contact
you as soon as possible to explain how your case will be progressed. Due to
volume of complaints we are receiving at present it may several months
before your hear from us”. After follow-up letters (7 December 2006 and 2
September 2007), on 7 September 2007 the Commissioner said that he has
raised a number of queries with the DBIS and is awaiting a reply. The
Commissioner’s office received a reply from the DBIS on 29 November
200720. A further letter on 23 January 2008, which was copied to Sikka,
inquired about the details of the searches carried out to locate the missing
report and also requested that Sikka be given the right to request a review by
the DBIS’s decision to invoke Section 41 to withhold information and added
that “…some of the information is now thirty years old and therefore whilst it
may have been confidential and sensitive at the time of the investigation its
age may now be a factor which I will have to consider when making a
decision. This is particularly the case where the complainant has raised the
matter of age with the ICO”.
19 This report related to frauds by media tycoon Robert Maxwell and was
published in March 2001. On 2 February 1999, auditors Price Waterhouse
were fined £1.2m and ordered to pay an additional £2.2m in costs for audit
failures at Maxwell’s empire (BBC News, Record fine for Maxwell
accountants, 3 February 1999;; accessed 7 January 2012).
20 Its contents are not known to the author.
Following the Commissioner’s intervention, on 20 February 2008, the DBIS
offered Sikka a right to review its decision to invoke Section 41 and withhold
information. It also suddenly found additional information. The letter went on:
Over the Christmas 2007 period Companies Division Branch was
reviewing a number of papers and amongst them was a synopsis of the
final report into Ramor. … the synopsis was found by chance and had
not been overlooked during the earlier search for material …”
However, the DBIS invoked exemptions available under the FOIA and
decided that most of the synopsis would not be released. The redacted
synopsis released by the DBIS consisted of six paragraphs and about three-
quarters of a page in length. The first section dealt with the appointment of the
inspectors and did not provide anything of significance. Paragraphs 4 and 5
were withheld in their entirety and parts of paragraph 6 were redacted21. The
released extracts provided some food for thought by stating that:
“…in 1977 they [inspectors] referred to the Department evidence of
possible criminal offences. … In doing so they said that it was difficult
to decide whether the conduct they referred to was fraudulent or
reckless or merely incompetent. … In 1979 they referred to the
Department evidence suggesting commission of two tax frauds. They
decided that it would be wrong to complete their enquiries until the
Inland Revenue decided whether action was justified so in 1981 they
submitted a substantial interim report which contained all the findings
except that they had not investigated fully the tax matters referred to.
in 1983 disciplinary proceedings were taken by the Institute of
Chartered Accountant of England and Wales against firms and
individual accountants they had criticised… Price Waterhouse, auditors
of Bryanston and two of its subsidiaries … were reprimanded … They
appealed but lost and ended up being ordered to pay a total of
£273,000 towards the costs. Mr. Ainger, a partner in Price Waterhouse
was reprimanded as was secretary of Bryanston, Mr. Fitzhugh.
Goodman Jones, a firm which acted for a company which bought
Bryanston in 1975, were admonished
The inspectors conclude their report by pointing out that as a result of
the publication of their interim report certain accountancy firms and
individual accountants were criticised and ordered to pay costs and this
was publicised. The criminal matters they reported to the Department in
1979, by virtue of them being criminal, were not included in their report
and hence no disciplinary action was taken against the partners in
21 Some further extracts were released later (see below).
[REDACTED FOIA 2000 sections 31(1)(d) and 40(2)]22 involved or
against that firm and the suspected criminal conduct of all four persons
referred to above was not publicised. They say that in their opinion this
was unfair. They recommend that copies of their report be sent to the
Inland Revenue and to the Institute of Chartered Accountants”.
Details and descriptions of the “two tax frauds” were withheld, but the
censored text seemed to point the finger at professionals, possibly including
accountants, especially as the inspectors asked for the copies of their report
to be sent to the Institute of Chartered Accountants.
On 31 March 2008, Sikka asked the DTI to conduct an independent internal
review of its decision to withhold some information and the outcome was
communicated on 3 June 2008. As regards the allegations of tax fraud, the
letter said that the matter was referred to Inland Revenue and,
“following an investigation, the allegations were dealt with by way of a
confidential settlement between the Revenue and the taxpayers
involved … I do not consider it would be right to release details of the
settlement reached between the Inland Revenue and the tax payers
which was confidential
Without listing any documents, the Reviewer said that some papers are being
withheld and also invoked the Data Protection Act to support his decisions,
but said that “slightly more” information can now be disclosed. Extracts from
the previously withheld paragraph 4 (see above) stated that:
“The suspected offences were the evasion of tax totalling £355,000 by
backdating purchase documents to support claims of group tax relief.
[Redated FOIA s.31(1)(d), 31(1)(g) and 40(2)] The inspectors report
that in 1984 they were informed by the Department that the Inland
Revenue were not going to prosecute but had instituted civil
proceedings against [Redacted FOIA s.40(2)]. The inspectors decided
to delay completion of their report until the civil proceedings, which
began in February 1986, were over. In April 1986 they reported that
they were informed by the Department that those proceedings had
been settled [Redacted FOIA s.31(1)(d) and s.40(2)].
The extracts released from the previously suppressed paragraph 5 (see
above) said that:
22 The words in bold letters appear in the document released to Sikka.
“The inspectors criticise the fact that the settlements reached with
[Redacted FOIA s40(2)] included in each case an express term
whereby all parties agreed to keep the settlements confidential. … The
Inspectors cannot see how this was in the interests of the Revenue or
in the public interest. [Redacted FOIA s40(2)] solicitors provided
information on the terms of the settlement which forebade the
Inspectors to include the information in a published report. The
Inspectors refused to submit to these terms because they did not think
that it was in the public interest to accept evidence on a confidential or
conditional basis. …
A bundle of redacted letters, minutes and handwritten documents was also
released to Sikka on 3 June 2008. One of these (document 21) contained a
“Note for File”, prepared on 25 July 1979 by a civil servant, and stated:
“The inspectors were anxious to see quick action on … alleging frauds
against the Inland Revenue and Mr Ware [a civil servant] said he would
endeavour to arrange a meeting with the Inland Revenue …There was
discussion abut whether proceedings should be taken against Hambros
Bank under section 167 to elicit information about the ultimate
destination of money from the sale of shares by xxxxxxxx (papers on
the file); and against Midland Bank for similar information would be put
to Counsel …”
The bundle of papers shed some light on the intermediaries involved in
various transactions. In one set of documents, the inspectors wrote to the DTI
(23 July 1979) to express concerns about an amount of £67,059.40 paid to
the Midland Bank by Rowe Rudd and Co Limited in respect of the proceeds of
shares in one of Bryanston’s subsidiaries. These shares were previously held
by Midland Bank (Overseas) Nominees Limited for Banque Cantrade AG. The
inspectors said that to “complete our investigations, we should, subject to the
Counsel’s opinion, apply to the Court not only to examine the Secretary of
Hambros Bank Limited, but also the relevant officer of Midland Bank Limited
to determine the destination of the amount of £67,059.40”. In earlier
correspondence (for example, 15 August 1977), Midland Bank had said that
“at no time have our Company held shares as nominees for Bryanston
Finance Limited”, but on 23 November 1977, the inspectors sent the Bank a
“copy of a Stock Transfer Form, which records the transfer of 375,000 shares
… from the name of Midland Bank (Overseas) Nominees Limited to the
names Bryanston Finance Limited”. The outcome of this inquiry is not evident
from the bundle of papers released.
The internal review resulted in the release of additional information, but the
DBIS still withheld unknown amount of information. In any case, large parts of
the released information were redacted. So Sikka once again invited (6 July
2008) the Information Commissioner’s Office to intervene. Eventually, on 29
April 2009, the case manger at Commissioner’s office wrote to say that he has
“identified certain matters that require further clarification” and has sought
explanations from the DTI. Perhaps, the Commissioner’s questions
persuaded the DTI reconsider some of its earlier decisions. Following
suggestions from the Commissioners, on 4 June 2009, the DTI released ‘six
words’ from a previously redacted document (see footnote16).
After further correspondence, the Information Commissioner issued a 43 page
Decision Notice23 on 25 March 2010. It noted that in 2003 the DTI destroyed
33 boxes of material and a file could not be traced though it was recorded in
the system as being open (paragraph 33). A further 11 files were destroyed on
11 January 200624. The Commissioner concluded (paragraph 35) that “on a
balance of probabilities the final [Ramor] report was not held at the time of the
request [for information]”. The Decision Notice criticised the DBIS for not
informing Sikka of his rights and ordered it to release some additional
information25 (paragraphs 118-120). The DBIS was given 35 days to comply,
or lodge an appeal. The DBIS on 29 April 2010 and released additional
information, including background notes and some correspondence relating to
the investigations. The Information Commissioner permitted the DBIS to
withhold some of the information because it protected privacy of some
individuals even though the information was over thirty-years old and may
relate to wrongdoers. On 21 April 2010, Sikka lodged an appeal against the
Information Commissioner’s decision with the First Tier Tribunal on the basis
23This is available at
24 The request for information was made on 18 November 2005.
25 This is listed in Appendix C accompanying the Decision Notice. However,
Appendix C was neither sent to the complainant nor made public because at
the date of the DN the information in Appendix C is disputed information,
which in principle can be the subject of litigation, and is thus treated as
that all the withheld information should be released. Subsequently, the DBIS
was also enjoined and a preliminary hearing, via a telephone conference, with
a designated judge to agree the next steps (e.g. dates for exchange of
arguments, etc.) was scheduled for 30 June 2010. However, this case
coincided with developments in another case (see below) and Sikka, who had
no legal representations, felt that he could not simultaneously take on two
government departments and on 29 June 2010 withdrew his appeal.
4.2.0 Bank of Credit and Commerce International Limited (BCCI)
4.2.1 Background
BCCI began life in Pakistan but eventually expanded with offices in London,
Luxembourg, Lebanon, Dubai, Sharjah and Abu Dhabi. By the mid-1980s, it
had assets of US$22 billion and operated from 73 countries. It was regulated
by the Bank of England. On 5 July 1991, following evidence of fraud,
kickbacks, money laundering and racketeering, the Bank of England closed
BCCI’s operations (United States Senate Foreign Relations Subcommittee on
Narcotics, 1991; Bingham, 1992; United States Senate Committee on Foreign
Relations, 1992). At the time of its closure BCCI had some 1.4 million
depositors across the world. The creditors’ collective losses were estimated to
be over US$10 billion and around 14,000 people worldwide lost their jobs26.
The closure of BCCI prompted critical reports by US Senate Committees (for
example, United States Senate Foreign Relations Subcommittee on
Narcotics, 1991; United States Senate Committee on Foreign Relations,
1992), together with the release of some hitherto secret files27 held by the
Central Intelligence Agency (CIA). The US Senate Committee concluded that:
“BCCI's British auditors, Abu Dhabi owners, and British regulators, had
… become BCCI's partners, not in crime, but in coverup. The goal was
not to ignore BCCI's wrongdoing, but to prevent disclosure of the
wrongdoing from closing the bank. the Bank of England, Price
Waterhouse, Abu Dhabi and BCCI had together colluded to deprive the
public of the information necessary for them to reach any reasonable
judgment on the matter, because the alternative would have been
26 Hansard, House of Commons Debates, 22 October 1992, cols. 574-89.
27 This is not to suggest that the US is somehow gloriously open. Rather it has
a different history and politics (for a discussion, see Barone, 2006).
BCCI's collapse (United States Senate Committee on Foreign
Relations, 1992:. 276).
The US Senate report had sight of the “Sandstorm Report28and said that it
“An insider's account of BCCI's fraud created by BCCI's own auditors,
Price Waterhouse, and provided to the Bank of England dated June 22,
1991, the "Sandstorm Report," was the final evidence that lead to the
shutdown of BCCI globally on July 5, 1991. That draft report, based on
a review of banking records from several countries and interviews
carried out through the spring of 1991, found evidence of "widespread
fraud and manipulation," at BCCI, reflecting "the general scale and
complexity of the deceptions which have undoubtedly taken place over
many years(United States Senate Committee on Foreign Relations,
1992: 52).
Some aspects of the Sandstorm Report were leaked in the UK press and the
Sunday Times (21 July 1991, pages 1 and 20) claimed that a copy “was sent
to Sheikh Zayed, the ruler of Abu Dhabi and owner of BCCI”.
The BCCI closure was followed by some prosecutions29, but unlike other
banking frauds of the late twentieth-century (for example, UK Department of
Trade and Industry, 1976, 1977, 1983; Board of Banking Supervision, 1995)
the UK government did not appoint inspectors to investigate the frauds. As a
way of managing the crisis, on 19 July 1991, it appointed Lord Justice
Bingham to conduct an inquiry “into the supervision of BCCI under the
Banking Acts; to consider whether the action taken by all the UK authorities
was appropriate and timely; and to make recommendations” (Bingham, 1992,
page iii). The Prime Minister said that The conclusion of the inquiry will be
made public30. On 22 October 1992, the Chancellor of the Exchequer told
parliament that the government has decided to publish the report “…
unamended and in full but without the supporting appendices31. The
28 In March 1991, the Bank of England asked BCCI auditors Price
Waterhouse to prepare the report under Section 41 of the Banking Act 1987.
An interim report was submitted on 22 June 1991. It was not finalised.
29 The Guardian, Files closed on BCCI banking scandal, 17 May 2012
scandal; accessed 20 May 2012).
30 Hansard, House of Commons Debates, 22 July 1991, col. 755, 761.
31 Hansard, House of Commons Debates, 22 October 1992, cols 574-89
appendices are thought to have contained extracts from the Sandstorm
Report. The Bingham report briefly referred to the Sandstorm Report (pages
138 to 140) and considered its contents as “fairly damning” and “devastating
(para 2.447 and 2.448), but it remained secret. A number of UK parliamentary
committees examined the BCCI closure (for example, UK House of Commons
Treasury and Civil Service Select Committee, 1991, 1992a, 1992b, 1992c),
but none were given sight of the Sandstorm Report.
The US Senate Committee on Foreign Affairs had access to both the full and
a censored version of the Sandstorm Report. It stated that the
report has been provided to the Subcommittee solely in a heavily
censured form by the Federal Reserve at the insistence of the Bank of
England, which forbid the Federal Reserve from providing a clean copy
of the report to the Congress on the ostensible ground that to do so
would violate British bank secrecy and confidentiality laws ...
[Subsequently the Committee] “obtained an uncensored version of the
report from a former BCCI official, which revealed criminality on an
even wider scale than that set forth in the censured version” (United
States Senate Committee on Foreign Relations, 1992: 53).
In accordance with the US freedom of information laws, the censored copy of
the Sandstorm Report was deposited in the US Congress Library. In
accordance with the US Depository Library Act 1962, it was also made
available to 1,250 regional libraries. In 1999, as part of research into a paper
on BCCI (Arnold and Sikka, 2001), Professor Patricia Arnold found the
censored version of the Sandstorm Report, together with extracts of Price
Waterhouse audit working papers, in a public library in the US state of
Wisconsin. The documents were photocopied and mailed to Sikka who placed
a scanned copy on the internet32. The UK government was informed and
invited to make a statement. It declined33.
32 See and
33 Mr. Mitchell: To ask the Chancellor of the Exchequer if he will (a) make a
statement on the publication on the website of the Association for
Accountancy and Business Affairs of the Sandstorm report by Price
Waterhouse on BCCI and (b) place a copy of the report in the Library. Ms
Hewitt: No (Hansard, House of Commons Debates, 14 June 1999, col. 28).
The Association for Accountancy and Business Affairs (AABA) is a not-for-
profit organisation registered in the UK. Prem Sikka is its director.
In view of the public availability of some parts of the Sandstorm Report, the
Prime Minister34 and the Chancellor35 were urged to publish the full version,
or at least equivalent to that found in the US Congress Library. They declined.
The standard response was that the contents are covered by the
confidentiality provisions of Part V of the Banking Act 1987. The Prime
Minister’s letter of 16 June 1999 said that:
“… certain US authorities were provided with copies (with some
information deleted in certain cases) and the copies were not marked
“confidential”, they were provided under conditions of confidentiality
A further letter, dated 2 August 1999, said that:
“… copies of the draft report (in unredacted or redacted form) were
made available to the US authorities on the basis that confidentiality
would be protected. It was, however, recognised that if information was
required by Congress (eg the House Banking Committee) it would have
to be provided. However, even then the Committee would protect the
confidential information or parts of it”.
The Treasury Minister, replying (letter dated 8 December 1999) on behalf of
the Prime Minister, said that the report would not be released even under
future freedom of information laws.
The above suggests that versions of the Sandstorm Report were released by
the UK government to a selected number of individuals and organizations. At
the same time the UK government refused to release the Sandstorm Report,
either in full or in part, to the public. The implementation of the FOIA created
possibilities for securing the full Sandstorm Report.
4.2.2. The Request for Information
The exact length of the Sandstorm Report was not known. Under the
circumstances, rather than asking the UK Treasury to fill-in a series of blanks
34 For example, letters from Austin Mitchell MP on 26 October 1998, 22 April
1999, 22 June 1999, 14 October 1999; replies on 10 December 1998, 16
June 1999, 2 August 1999, 9 December 1999.
35 For example, letters from Austin Mitchell MP on 17 June, 23 June 1998, 20
January 2000; replies dated 22 July 1998, 9 December 1999.
in the version held in the US Congress Library, and on the internet, a request
for the full report was made on 3rd January 2006. An email from Prem Sikka
asked the Treasury Department to provide three things: a) A copy of the
Sandstorm Report; b) correspondence relating to BCCI audits, which is likely
to be between the Treasury Department, Bank of England, the Institute of
Chartered Accountants in England and Wales (ICAEW) and Price
Waterhouse; and c) BCCI related correspondence between the US Senate
Committee on Foreign Relations and the UK Treasury Department. On 1st
February 2006, the Treasury replied stating that it holds the information
requested, but declined to process the request because would cost more than
£600, a limit specified by section 12 of the FOIA.
The Treasury response confirmed the existence of the requested information.
In principle, it appeared that the ‘cost’ constraint could be negotiated by
making multiple requests over a period of time. Therefore, on 8 March 2006 a
copy of the Sandstorm Report only was requested. A Treasury official replied
on 10 April 2006 and stated that “we have not yet reached a decision on
where the balance of public interest lies …it will take up to an additional 20
working days to take a decision …we intend to respond by 11th May 2006. A
further letter of 2nd June 2006 promised a reply “by the end of the month”. As
nothing further was heard reminders were sent on 5th and 24th October. In an
email dated 26th October 2006, the Treasury case manager replied that:
As you may well be aware, the ongoing BCCI litigation only concluded
recently. Due to the complexity of the case and the report we have had
to consult third parties to ensure that we meet the significant duties
placed upon us by the Data Protection Act and the Freedom of
Information Act. … we are very close to a conclusion and expect to
reply formally to your request within a week or two”
The Treasury reply hinted that it may withhold information by sheltering
behind one or more of the exemptions permitted by the FOIA. On 26 October
2006, Sikka reminded the Treasury that “BCCI liquidators, Deloitte & Touche,
dropped the case36 in November 2005, long before the request for information
36 Bank of England press release, BCCI Liquidators Withdraw Case Against
the Bank of England, 2 November 2005
and financial settlement was reached in early June 200637”. Despite the
Treasury promise of a reply “within a week or two” nothing further was heard.
So, a reminder was sent on 16 February 2007.
On 27 February 2007, the lack of response from the Treasury was raised in
the House of Commons by Austin Mitchell MP and the Chancellor said that:
“Professor Sikka’s request has entailed the careful examination of
several complex issues. I understand that officials expect to be in a
position to respond very shortly38”.
Following the above exchange, Sikka wrote to the Minister on 28th February
2007 and invited him to shed some light on what he termed “complex issues”.
On 28 March 2007, a four page long reply was received. It raised five major
issues and these are explained below.
Firstly, the Treasury found the redacted version of the Sandstorm Report on
the internet (placed there by Sikka) and invoked Section 21 of the FOIA to say
that it is not required to provide the parts already in the public domain. The
Treasury compared the internet version with the unredacted version in its
possession and found a number of typing/scanning errors and sent in a list of
corrections. Secondly, the Treasury was unwilling to provide a complete
version of the report but it knew that the Report (in unredacted form) was
included in the documents filed by the Bank of England in the proceedings
brought against the Bank by the liquidators of BCCI. The letter added that:
Rule 5.40(2) of the Civil Procedure Rules allows a person to make an
application to the Court for copies of certain documents that have been
filed with the Court in legal proceedings where that person is not party
to the legal proceedings. If you propose to seek a copy of the Report
from the Court, you may find it helpful in making your application to cite
the following legal proceedings: Bank of Credit and Commerce
(; accessed
on 4 January 2012). The liquidator, Deloitte & Touche, had accused the Bank
of England and 22 present and former staff members of misfeasance in public
office and sought damages of £1 billion.
37 BBC News, Bank awarded £73m in BCCI costs, 7 June 2006
(; accessed 4 January 2012)
38 Hansard, House of Common Debates, 27 February 2007, col. 1300.
International (Overseas) Ltd (in liquidation) and others v Price
Waterhouse and others and Three Rivers District Council & others v
The Governor and Company of the Bank of England”
The above seemed to suggest that Treasury was content for Sikka to obtain a
copy of the Sandstorm Report, as long as it was not seen to be releasing it
(see more below). Thirdly, the 28 March 2007 letter said that:
The demise of BCCI remains a sensitive issue and we have needed to
consult others over the release of the information in this report. We
have also had to consider the legal position in relation to the release of
the individual pieces of information in the report that are not readily
available to the public and consider whether release would be
prohibited by section 44 of the Freedom of Information Act. we are
able to release to you some additional unpublished information from
the draft report …”.
The “additional unpublished information released by the Treasury was
Section 1 of the Sandstorm Report and headed History and current status of
problems’. It consisted of four pages of text and was not really new as it was
freely available from the US Congress Library. It is just that some of these
pages were not placed by Sikka on the internet. Fourthly, the Treasury was
unwilling to release the missing parts of the version of the Report available
from the US Congress Library and the internet. Its position was that:
The information constitutes personal data, and disclosure would in our
view contravene data protection principles. Section 40(2) is an absolute
exemption and we are not required to consider the public interest in
release.In this instance we consider in particular that the release of
names would breach the First Data Protection Principle. Where names
have not been mentioned in evidence during litigation and are not
otherwise in the public domain we consider that it would not be fair to
release the names, even after 16 years. In relation to the release of
names where the fact and nature of individuals’ connections with BCCI
may have already been made public by others not subject to the Data
Protection Act, we consider that does not absolve us from our duty to
consider the conditions on disclosure related to it ...”.
Fifthly, the Treasury invoked disclosure exemptions under the FOIA and said
that it would not release the key names on the basis that:
“…the release, by the UK government, of this information would be
likely to provoke a negative reaction that would damage the UK’s
international relations and may harm its ability to protect and promote
UK interests abroad”
To sum up, the Treasury did not provide any of the missing information. It
justified its refusal by using the public interest exemptions contained in the
FOIA. However, it also indicated that a copy of the report could be obtained
from the courts though it did not identify the court(s) or the process by which
someone can obtain a document filed with it.
On 14 June 2007, Sikka wrote to Her Majesty’s Court Service (HMCS) and
requested a copy of the Sandstorm Report. The HMCS replied (24 July 2007)
stating that it could identify six cases relating to BCCI during the period 1997
to 2005. Three files had been destroyed because the documents were over
five years old and no trace of the Sandstorm Report could be found in the
other three files. This information was passed to the Treasury on 31 July 2007
and the Department was asked to review its previous decision to withhold the
Sandstorm Report. A reminder (14 September 2007) failed to elicit any further
response. Following a prolonged period of silence, the matter was again
raised in the House of Commons on 7th January 2008 and the Chancellor
said that the “Treasury is currently considering this case in response to an
internal review request made by Professor Sikka in September 2007 under
the Freedom of Information Act. A decision will be reached shortly39”.
On 13th March 2008, the Treasury finally communicated the result of its
internal review. It refused to provide the withheld information and cited the
Data Protection Act 1998 and the Human Rights Act 1998 to argue that
release of the information would violate privacy of
the individuals who were employed, or had been employed by BCCI;
also the names of individuals who had had financial dealings with BCCI
… It is not easy to ascertain who was tried and found guilty of offences
in relation to BCCI, but where individuals were tried and found guilty of
offences they would have received appropriate punishment from the
courts and it would be unfair, after this time, to publicise their
involvement again. For those employed by BCCI who had not been
found guilty of any offence it would be unfair to release information
about their association with BCCI as this might be detrimental to them
39 Hansard, House of Common Debates, 7 January 2008, col. 340.
in their current employment or their employment prospects. The same
reasoning applies to those who had financial dealings with BCCI …”.
In addition, the Treasury repeated its previous assertion that the public
interest in releasing the information was outweighed by the
“public interest in maintaining good relations with other states. …the
sensitivity here is not so much around new information finding its way
into the public domain, but in relation to the damage likely to be caused
through the release by the UK government (emphasised in the
original) of this information”.
The above was considered to be unsatisfactory. For example, if the
wrongdoers have already been identified and punished, it is difficult to see
how their human rights were being protected by withholding the contents of
the Sandstorm Report. The identity of these individuals would probably
already be known to employers in the finance industry and in any case they
would be obliged to provide a truthful account of their employment history on
their job application forms. Some may also have died in the intervening years.
If any employees, depositors or lenders were innocently caught up with BCCI
frauds, the Treasury could redact their names and release the rest.
4.2.3. The Information Commissioner
On 16 May 2008, the Information Commissioner was invited to adjudicate the
dispute. The Information Commissioner acknowledged the request on 12 June
2008 and an email on 12 December 2008 said that the matter is awaiting
assignment to a case officer. We will contact you again with further updates”.
Another email, dated 15 June 2009, stated that the matter has now been
assigned to a case officer and a decision would be made in due course.
On 3rd July 200940, nearly fourteen months after the initial complaint, the
Commissioner finally wrote to the Treasury and asked to see a full copy of the
Sandstorm Report along with detailed submission of the Treasury’s case for
40 Paragraphs 21-23 of the Decision Notice issued by the Information
Commissioner on 14th December 2009 (see
withholding information41. Further exchanges took place on 5 August and 21
September 2009. In an email, on 21 September, the Information
Commissioner’s office informed Sikka that some progress was being made on
his case. Finally on 14th December 2009, the Commissioner issued a
Decision Notice42. The 21 page document written in dense legal language
criticised the Treasury for breaches of the rules for processing requests and
unreasonable delay in reaching its conclusions (paragraphs 88, 90-93).
However, it stated (paragraph 87) that “The Treasury was correct to withhold
the parts of the report that it did not disclose to the complainant on the basis
of the exemptions contained in section 21, 40(2) and 27(1)(a) of the Act”.
4.2.4. The Appeal
Paragraph 94 of the Decision Notice reminded the parties that they can
appeal against the Commissioner’s decision by filing a Notice of Appeal within
28 calendar days. The Decision Notice was not accompanied by a form which
would need to be completed to lodge an appeal with the Information Tribunal
though it contained a website address for further information.
Unlike most of the previous correspondence, the Decision Notice was not sent
electronically to Sikka. Instead, it was mailed by the Commissioner’s office on
14 December 2009, during the last week of the academic term, to his
university address. Royal Mail confirmed that the document was delivered the
next day to Sikka’s work address43, but he did not see it. The next few days
coincided with attendance at conferences, followed by the closure of the
university for the Christmas and New Year break. Sikka was not alerted to the
imminent arrival of the Decision Notice and thus could not make alternative
arrangements to open or redirect his mail. Heavy snow falls in early January,
chaotic transport and various research commitments meant that Sikka first
saw the Decision Notice on 18 January 2010, well after the 28 day appeal
41 Sikka was not shown any of this correspondence and was therefore not in a
position to comment on the contents.
42 Case Number FS50202116, available at
43 At that time Sikka was employed at the University of Essex in UK.
period which expired on 12 January 2010. In common with most laypersons
Sikka only had a rudimentary knowledge of the freedom of information law
and therefore sought pro bono advice from a number of specialist law firms as
well as the pro bono unit at the Bar Council. Some law firms promised to
contact him within the next few days though in the event none offered pro
bono assistance. He was now even further away from the 28 day deadline
and the only option appeared to be to represent himself in person in the
courts. As part of the preparation for the Appeal Sikka tried to establish from
the Information Commissioner (email 11 February 2010) whether the
availability of the Sandstorm Report to a number of parties (courts, US Senate
Committees, newspapers, Sheikh of Abu Dhabi) constituted a “publication”,
but this line of inquiry was not productive. A study of the tribunal procedures
(Jacobs, 2009) suggested that late appeals were possible as the judges had
some discretion. An email, 24 February 2010, from the Commissioner’s Office
confirmed that late appeals may be permitted at the Tribunal’s “discretion”. On
the same day guidance was sought from the Information Tribunal and the reply
was that the “decision as to whether an out of time appeal is accepted rests with
the Principal Judge. ...You will need to put in detail the reasons why the appeal
is out of time and why you think the Tribunal should accept it”. This advice was
followed and an appeal was lodged with the First-Tier Tribunal (FTT) on 2 March
2010, some 46 days after the expiry of the 28 day notice period. Sikka had little
knowledge of case law and thus did not cite any legal precedents and besides
this was not considered to be a good strategy in combating the legal expertise
available to the Information Commissioner. So the Appeal Form primarily stated
the reasons (as cited above) for the delay. The appellant sought a paper rather
than an oral hearing as this was economical and less disruptive44. In any case, a
face-to-face engagement with the lawyers representing the Information
Commissioner was not considered to be advantageous.
The FTT invited the Information Commissioner to comment on the late appeal,
and he opposed (email dated 26 March 2010) it by arguing that “there is no
good reason to allow this appeal out of time. The Tribunal should not therefore
44 For example, Sikka would not need to reschedule classes to make court
exercise its discretion under rule 5(3)(a) of the 2009 Rules to extend time …”.
The Tribunal wrote to Sikka, on 29 March 2010, and said that “In view of what
they [Information Commissioner’s Office] say the Tribunal is inclined to reject the
appeal. However, before doing so the Tribunal would like to give you a further
opportunity to explain why your appeal should be accepted …”. Sikka
responded on 31 March 2010, emphasising the importance of the missing
information and the case, and the fact that a number of parties had already seen
the unredacted version of the Sandstorm Report. On 9th April 2010, Judge John
Angel permitted Sikka’s late appeal to proceed by stating45 that:
I have taken all these matters into account ... I have decided that in all
the circumstances of this particular case it would be just and fair to
allow this appeal to proceed (paragraph 13 of the judgement46)”.
The judgment seemingly cleared the path for the substantive case, i.e. the
release of the missing parts of the Sandstorm Report, to be heard. However,
possibly fearing a flood of late appeals, on 7 May 2010, the Commissioner
made an application to FTT for ‘Permission to Appeal’ against the judgment
which permitted Sikka’s late appeal to proceed47. Judge John Angel reviewed
his decision on 17th May 2010 and concluded that no error in law had been
established and the permission to appeal was refused48. The Judge informed
45 Professor Prem Sikka v Information Commissioner (The Tribunal Procedure
(First-tier Tribunal) (General Regulatory Chamber) Rules 2009) [2010] UKFTT
EA_2010_0054 (GRC); available at
46 The judgment established new principles for allowing late appeals and
stated that amongst other things the Tribunals should consider the reasons for
the delay, complexity of the decision being appealed, the fact that the
appellant is unrepresented and unfamiliar with the appeal process and the
public interest in the disputed information. Following the judgement, it is
possible to apply for an extension of time to appeal before lodging the actual
appeal. Since May 2010, the instructions issued by the UK Department of
Justice for completion of the Notice of Appeal form for freedom of information
disputes refer appellants to the “Ruling in Prof Sikka v Information
Commissioner dated 9 April 2010”.
47 Sikka was invited to add his observations on the appeal.
48 See the final four pages of
the Commissioner (email dated 17 May 2010) that he can apply directly to
the Upper Tribunal for permission to appeal”. Meanwhile, the judge ordered
that the parties prepare for the substantive hearing. The Treasury
Department, the recipient of the original request to release the Sandstorm
Report, was joined as an additional party to the dispute and the parties (Sikka,
Information Commissioner and a lawyer for the Treasury) proceeded to draw
up a timetable for exchanging documents and witness statements, etc. Judge
Christopher Ryan was appointed to hear the case and on 6 July 2010 issued
Directions, ordering the parties to submit arguments for/against the release of
the missing parts of the Sandstorm Report.
In accordance with Judge Ryan’s Directions Sikka began preparation of his
detailed case and collected witness statements49. However, the proceedings
were to be delayed as on 14 July 2010 the Information Commissioner did two
things. Firstly, he approached the Upper Tribunal with an application for
permission to appeal against the FTT judgment, which allowed Sikka’s late
appeal. Secondly, he also sought a judicial review of the FTT decision50. The
two routes were being pursued because there was some uncertainty about
how best to challenge the FTT judgment, especially as the FOIA was
relatively new and there were few, if any, cases of late appeals. In view of the
appeal, the Upper Tribunal judge ordered a stay on the proceedings and the
parties awaited the next steps. On 6 September 2010, Sikka was informed
that “the Information Commissioner's applications will now proceed to be
heard at an oral hearing before the Upper Tribunal. The object of the
hearing will be to assist the Upper Tribunal in its consideration of the
Information Commissioner's arguments in relation to the First-tier Tribunal's
49 These included a statement from Washington DC lawyer Jack Blum, an
adviser to the US Senate Committee which investigated the BCCI frauds
(United States Senate Committee on Foreign Relations, 1992). Blum is
credited with first uncovering BCCI frauds. Witness statements were also
provided by a number of NGOs and journalists, legislators, a former member
of the UK House of Commons Treasury Committee, a former US partner of
PricewaterhouseCoopers and two UK accounting academics, Professor
Michael Jones and Professor Jill Solomon.
50Information Commissioner v First Tier Tribunal Information Rights:
Interested Party - Professor Prem Sikka - Judicial Review Application J
decision to admit your late appeal”. The oral hearing was set for 2 December
2010 in London and Sikka was ordered to appear in person.
On a bitterly cold snow-covered morning, at a hearing in London, the
Information Commissioner was represented by the head of the legal
department and Timothy Pitt-Payne QC, described on his firm’s website51 as a
“very persuasive advocate … intellectual power second to none … leading
advocate in Freedom of Information Law”. Sikka appeared in person and did
not have any legal advisers52. Timothy Pitt-Payne QC spoke for about seventy
minutes and made an eloquent case for overturning the decision to allow
Sikka’s late appeal. Due to lack of legal know-how Sikka could not engage in
legal banter and only spoke for about 10-15 minutes to mainly defend the
previously given reasons for the late appeal. He also argued that if in the
absence of any significant errors in law the Upper Tribunal overturned the
discretion’ exercised by a lower court (the First-Tier Tribunal) judge, then that
would undermine and effectively destroy the court system. Towards the end of
the hearing, the Upper Tribunal judge Nicholas Wikeley gave both parties a
copy of the recent judgment in CD v First Tier Tribunal (CICA) [2010] UKUT
181 (AAC) (01 June 2010) and invited them to consider whether in the light of
this case they wished to make a further written submission. In effect, the judge
had asked the parties to interpret the case and possibly voluntarily reconsider
their position. The CD case, not relating to freedom of information, was
interesting in that the appellant was nine months out of time and had given
inadequate reasons for at least 4 months of that delay, and had a case which
appeared likely to struggle. The FTT judge had rejected the late appeal and
that decision was upheld by the Upper Tribunal. More importantly, the Upper
Tribunal judgement did not overturn the discretion exercised by the FTT
judge. Sikka made his written submission on 10 December 2010. On 19
January 2011 the Upper Tribunal issued further directions and invited the
parties to consider the significance of LS v London Borough of Lambeth (HB)
51; accessed on 30
January 2012.
52 There were five people in attendance: Judge Nicholas Wikeley, the court
clerk, the Head of legal services at the Information Commissioner’s Office,
Timothy Pitt-Payne QC and Prem Sikka.
[2010] UKUT 461 (AAC). The Commissioner’s legal representatives
responded on 17 February 2011, whilst due to lack of legal knowledge Sikka
mainly rehearsed his previous position. He also urged the judge to compare
his 46 days delay to the time taken by the Treasury and the Information
Commissioner in responding to his requests. On 7 March 2011, Judge
Nicholas Wikeley issued a 17 page judgement53 and stated (paragraph 2)
“… my decision is to give the Information Commissioner permission
both to appeal and to apply for judicial review, on the basis that the
grounds are arguable, but to dismiss the substantive appeal and the
application for judicial review. In short, I have concluded there was no
material error of law in the First-tier Tribunal’s decision. As a result,
Professor Sikka’s substantive appeal to the First-tier Tribunal against
the Information Commissioner’s Decision Notice should now proceed”
Thus, some five years after the initial request, the ground was cleared to hear
the arguments for/against the release of the missing parts of the Sandstorm
4.2.5. The Substantive Case and the Outcome
The case now returned to Judge Chris Ryan and on 8 March 2011, he
directed that the previously stalled process (stalled in July 2010) will now
proceed. The time table was that by 21 March 2011, the parties would provide
copies of background information (e.g. letters providing history of the case).
This was also the deadline for the Treasury to provide the Tribunal with a copy
of Sandstorm Report. By 27th April, the parties had to exchange with each
other and serve on the Tribunal any written witness statements and by 11 May
2011, the parties had to exchange their written submissions and lodge with
the Tribunal together with any authorities and statutory materials.
53Upper Tribunal (Administrative Appeals Chamber), March 07, 2011, [2011]
UKUT 94 (AAC) Information Commissioner v PS [2011] UKUT 94 (AAC), and
GIA/1488/2010 and JR/1600/2010 Information Commissioner v PS [2011]
UKUT 94 (AAC);Available at
The lawyers representing the Treasury, however, secured a vital concession
from the judge in that it did not have to show its arguments and evidence for
opposing the release of information to Sikka. The evidence would only be
available to the Tribunal and its members could then decide whether in the
light of arguments advanced by Sikka the disputed information could be
released. The logic was that the Sandstorm Report was confidential and so
were the arguments, including witness statements, for withholding its release.
Indeed, most of the evidence subsequently submitted by the Treasury, which
included a full witness statement from a senior Foreign Office official, on 9
May 2011, was considered to be confidential and Sikka was unable to cross-
examine it. The same logic did not apply in reverse. The restrictions meant
that the responsibility for cross-examination fell on the Tribunal members.
Therefore, it became vitally important to provide some ammunition to the
Tribunal to enable it to interrogate the Treasury’s case.
On 22 April 2011, Sikka filed a 41 page affidavit54, accompanied by 19
witness statements, to advance arguments for the release of the missing
information. Sikka had by now some awareness of the case law and possible
interpretations of legislation (for example, see Carter and Bouris, 2006), but
chose not to make them the central pieces of his arguments. In the absence
of legal advisers, he was not sure whether these interpretations were
appropriate and more importantly such a move would have enabled the
Treasury’s and the Commissioner’s lawyers to excel by providing authoritative
counter interpretations. Obviously, the judges knew that it was a contest
between a layperson and lawyers funded by the state and as a result may well
have been sympathetic to the layperson. So the concern was to provide
judges with arguments with which they could interrogate the Treasury’s case
for withholding information. The affidavit provided background to the BCCI
frauds, the significance of the Sandstorm Report, silence of the UK
government, the public availability of large parts of the Sandstorm report and
54 Available at
emphasised the age of the information, which by now was nearly twenty-years
old, together with a variety of arguments that the public interest would be
served by the release of the Sandstorm Report. By March 2011, the US
Congress Library had digitised some of its archives and as a result a large
volume of BCCI related information became publicly available55. The affidavit
wondered what if further digitisation resulted in the publication of a complete
copy of the Sandstorm Report. Subsequent, emails suggested that the
Treasury was not aware of the public availability of this information. After the
BCCI scandal, the Bank of England was stripped of its regulatory role, but in
July 2010 the incoming Conservative administration decided to restore its
former regulatory role56. In view of the change, its previous conduct was
thought to be of public significance and was mentioned in the affidavit.
On 5 May 2011, the Tribunal asked the parties for three additional items of
information. These were, 1) a copy of the internet version of the Sandstorm
Report. It would be recalled that this was placed on the internet by Sikka; 2) a
full copy of the Bingham Report (Bingham, 1992), presumably to establish
whether it contained any of the disputed information (see above); and 3) a
hard copy of the US Senate report on BCCI (United States Senate Committee
on Foreign Relations, 1992) from which Sikka had liberally quoted in his
affidavit. There is an internet version of the US Senate report57; but its
contents are not identical to the hard copy. Sikka provided a copy of the first
item and in the event the Treasury provided extracts from the previously
published Bingham Report, to support the arguments that the information
sought by Sikka was mostly already publicly available and that the release of
the withheld information would not be a significant addition. However, the
Treasury did not have a hard copy of the US Senate Report. On 9 May 2011,
the Treasury cross-examined Sikka’ affidavit and filed a contrary statement
and Sikka filed a rebuttal on 11 May 2011. The Information Commissioner
also filed a contrary statement on 11 May 2011 and argued that the Tribunal
55 For example, see; for further
links see
56 UK Treasury press release 26 July 2010 (
57 Available at
should view the public interest in the withheld information from the perspective
of 6 March 2006 (the date of the original request for information) rather than at
the date of hearing. This was supported by case law and was intended to
negate Sikka’s arguments that the return of the Bank of England as a banking
regulator had made the release of the Sandstorm Report of greater public
significance. Sikka filed a rebuttal on 11th May.
On 11 July 2011, in a 17 page verdict, covering 52 paragraphs, in the case of
Professor Prem Sikka v Information Commissioner, EA/2010/0054, 11 July
201158, Judge Chris Ryan, and two other members of the Tribunal,
unanimously said that:
“The Treasury is therefore directed to disclose to Professor Sikka,
within 35 days of the date of this decision, an unredacted form of the
Sandstorm Report and its covering letter, save only for the names set
out in Confidential Schedule59, which may be redacted” (paragraph 50).
“In our view there is considerable public interest in the public seeing the
whole of the Sandstorm Report so that it can be seen, not just what
happened, but what role was played by the governments, institutions
and individuals who were involved with an organisation guilty of what
the authors of the Sandstorm Report (paragraph 10.1) described as “an
enormous and complex web of fictitious transactions in what is
probably one of the most complex deceptions in banking history
(paragraph 29).
In response to the concerns that the disclosure would somehow prejudice
relationship with one or more other states, the Tribunal said that:
The public has an interest in seeing how each of those who carried out
an investigation illuminated the facts and assessed the actions of those
who were involved, whether they contributed to the problems, tried to
resolve them or played a neutral role. The weight we apply to this
element of public interest has been heavily influenced by our view of
the importance of the events surrounding the collapse of BCCI, the
serious ramifications it had for many innocent people caught up in it
and the questions it raised about the regulation and auditing of a large
international institution” (paragraph 30).
58 Available at
59 The nature of this Schedule is explained in the judgement.
The Treasury and the Information Commissioner were rebuked for their
interpretation of the data protection and privacy laws to shield individuals who
were “the architects of a group-wide programme of fraud and concealment,
not to mention the creation of a culture that led others with positions of
responsibility within the bank to follow their lead" (paragraph 42). The Tribunal
made a distinction about the seniority of the individuals and how they
performed at the time and on that basis ordered that the names of
“… those having senior management positions in either BCCI or other
organisations that were closely involved in the unlawful elements of its
activities should be identified” (paragraph 36c).
The Tribunal also ordered the release of he names of most of the customers,
on the basis that they
"were not ordinary customers, but had become involved in the many
complex and frequently incestuous transactions that enabled the BCCI
management and a number of organisations and individuals close to it
to commit or conceal fraud. Those frauds led to severe financial
hardship for many of the “ordinary” customers and we have explained
in Confidential Schedule 260, by reference to each individual, why we
consider that there is a legitimate interest in disclosing their
involvement and that this will not cause unfairness or unwarranted
intrusion into their privacy"
The judgement set a new legal precedent, making it difficult for the
government to withhold the names of some of the parties implicated in the
closure of BCCI. The Treasury was given 35 days to comply with the court
order. It was also given the right of appeal. Subsequently, at Treasury’s
request (4th August 2011) the period was extended by another 28 days
because “the decision in the appeal at issue related to a highly sensitive
report … the process is taking some time due to the need to consult widely
within the Foreign and Commonwealth Office …”. On 7 September 2011, the
Treasury informed the Tribunal it will not appeal the decision and on the same
60 Available at
ule.pdf. It is also part of the Tribunal judgement available at
day, nearly five and years after the initial request, most of the Sandstorm
Report was released to Sikka.
By comparing the version held in the US Congress Library (and also on the
internet) with the version released by the UK Treasury, the information
concealed by the UK government could now be read61. It mainly related to the
names of individuals and organisations. The individuals included Sheikh
Sultan bin Zayed, ruler of Abu Dhabi; various members of the royal family of
Abu Dhabi; Prince Turki, a member of the Saudi royal family; Sheikh Kamal
Adham, thought to be the one-time head of Saudi intelligence services;
Sheikh Sharqi, the Emir of Emir of Fujaira; Pharon, a Saudi businessman and
financier and Clark Clifford, a former US Defence Secretary and Presidential
adviser. The UK government shielded the identity of some individuals who
had died in the intervening years. These included BCCI founder Agha Hassan
Abedi (died in 199562) and Saudi billionaire Sheikh Khalid bin Mahfouz (died
2009) who in 1993 paid $225 million to settle US charges of bank fraud63 in
1993. A number of BCCI executives had been convicted of fraud, but their
identity was still being withheld by the UK government. These included
Mohammed Swaleh Naqvi, Ziauddin Akbar64. Perhaps, to defend the
reputation of some jurisdictions, the UK government also concealed the
names of some places. Examples include Grand Cayman, Bahrain, the name
of a Turks and Caicos company, North American Finance and Investment,
Arab Livestock Company (ALSCO) operating from Bahrain, Saudi National
Commerce Bank operating from Bahrain and Royal Bank of Scotland,
Singapore. The names of a number of corporations, including Bear Stearns,
Abu Dhabi Investment Authority, Capcom, Credit Suisse, Dubai Islamic Bank,
61 The comparison is available at
62 New York Times, 6 August 1995
the-shadow-of-a-vast-fraud.html )
63 New York Times, 26 August 2009
64 The Independent, 15 June 1994
Gokal Brothers, Habib Bank and National Bank of Georgia were also
One of the issues throughout the final Tribunal hearing was that the
Treasury’s evidence/arguments about withholding the information were
“closed”. Following the Tribunal’s judgement, Sikka informally inquired (email
dated 29 July 2011) whether the judge would now declare the evidence
“open”, thus enabling the public to see how the Treasury interpreted,
constructed and defended secrecy. In reply, the judge stated (email dated 2
August 2011) that “the particular nature of the evidence in … this case means
that this is one of the occasions when it must still remain confidential”. In
principle, a formal legal process could have been launched to secure the
evidence but was not pursued.
5.0. Summary and Discussion
Accountability and openness are promoted as the cornerstones of democracy
and responsible governance, but there is a difference between ideals and
practices, promises and their implementations. This paper has provided as
objective an account as is possible of two encounters with the UK state
apparatus to show that despite the promises, the provision of information is
frustrated and obstructed by bureaucratic and legalistic processes. It
supplements previous research showing that the UK state’s impulse is often to
shield selected elites (Mitchell, Sikka and Willmott, 1998), and elites themselves
are also adept at using resources to obstruct calls for explanations of their
conduct (Mitchell and Sikka, 2004).
The two case studies presented in the paper are based upon data generated
by freedom of information requests, which arguably had the potential to
increase understanding of banking frauds, auditing and regulation. Both cases
related to well known banking scandals and engaged with key state officials,
including ministers, civil servants, Information Commissioner and judges. In
principle, the freedom of information law can enable citizens to construct a
richer account of corporate scandals and frauds, and call policymakers to
account, but the paper drew attention to numerous difficulties in securing the
information. The government departments are not obliged to list the
documents that they hold, which an interested citizen can then request.
Rather the citizen somehow needs to be aware that a document may exist
before requesting it. Concerned citizens have to negotiate laws which invoke
notions of the ‘public interest’ to withhold information. Challenging official
bureaucracy is difficult because laypersons are unlikely to have familiarity with
case law or the complexities of legal language used, but public authorities
have considerable legal resources.
In the case of Ramor Investments, only a persistent engagement with the
state officials resulted in the release of some snippets of information. Without
any public announcement, the government officials acted as judge, juries and
arbiters of the pubic interest and destroyed key documents. The destruction of
key documents continued even after the request for information was made
and before the liquidation of the bank was finalised. The DBIS claim that it did
not hold the final unpublished report on the collapse of Ramor Investments
cannot be independently corroborated and the Information Commissioner
seems to have been persuaded to accept the Department’s line. There were
long delays in processing requests and other than an admonishment from the
Commissioner there appeared to be no consequences for the DBIS. The
Department was not fined, gave no undertakings for its conduct in the future,
or explained how its procedures and processes would be improved. The
information released by the DBIS showed that the state officials went to
considerable lengths to shield Price Waterhouse and others from public
scrutiny. In the face of fraud, government departments entered into private
and confidential agreements with some elites to protect their identity. The
inspectors investigating the Ramor collapse expressed some unhappiness
with the non-publication of their report, but these were overridden in the
anxieties to protect elites from public scrutiny. Seemingly, even after
considerable lapse of time, the desire to shield accountancy firms and elites
from scrutiny is prioritised above the public’s right to know.
In the case of BCCI, Sikka muddled through the legalistic processes and the
judges found some of his arguments to be “limited” and “inconclusive”, but
eventually a partially successful outcome was secured. The Information
Commissioner promotes himself as “the authoritative arbiter of information
rights, delivering high-quality, relevant and timely outcomes, responsive and
outward-looking …65”, but took a long time to respond and even then
supported the Treasury’s refusal to release the Sandstorm Report. The
eventual release of the most of the Sandstorm Report showed that the state
was shielding some individuals who had already been convicted of fraud, or
had direct involvement in frauds, including those who died in the intervening
years. It was shielding well known individuals from the Middle East, and
attached little weight to the UK citizens’ right to know. The involvement of
Middle East elites in BCCI frauds did not prompt the UK government to
withdraw ambassadors, close their embassies, or make public demands for
restitution. It simply covered up their identities, possibly to promote and
defend the interests of corporations exporting arms to the Middle East, or the
interests of elites in a politically sensitive part of the world. Even today, in
2017, the Sandstorm Report cannot be found on the UK Treasury’s website.
Under the FOIA, the public authorities are only obliged to release the
information to the party requesting it. Therefore, the UK Treasury’s obligation
was discharged by releasing the information to Sikka, rather than to the public
at large.
The contents of the Sandstorm Report also pose questions about the Bank of
England’s regulatory role. In the late 1990s, after the BCCI debacle, it lost its
regulatory role, but in 2011 it was restored to its former regulatory role. Given
that it went to considerable lengths to shield wrongdoers, the likelihood of it
being open and honest with parliament and the general public must be
doubted. Citizens may seek a fuller account of banking frauds to call
regulators and governments to account, but the Sandstorm Report provides
only a tiny glimpse of the BCCI affair. A reading of various documents
65 Page 6 of the Information Commissioner’s Annual Report 2009/10
suggests that there are other unpublished coded reports, such as “Fork” and
“Tumbleweed” and may be many more. As it has taken nearly five and half
years to secure one document, the possibility to speedily securing other
documents and constructing a fuller picture must be doubted. Interestingly, in
2015 another citizen sought access to Cabinet minutes and ministerial
correspondence relating to the closure of BCCI, but the FOI request has been
denied and in 2017 the Freedom of Information Commissioner again sided
with the government66. The politics of FOI should interest not only scholars of
politics and government, but also accounting historians. For example, much of
the accounting and regulatory history is constructed from official narratives
because the contemporary standards of objectivity ascribe a certain kind of
hardness to official reports. However, there is a possibility that the selective
release or withholding of information only succeeds in legitimising an
incomplete and skewed history, which lets elites off the hook. There needs to
be some scepticism of authoritative sources.
Arguably, it is difficult to reach generalised conclusions from two case studies,
but they draw attention to gaps between the public promises of accountability
and bureaucratic practices that thwart the provision of information. It could be
argued that the case studies show that citizens can secure some information,
if they toil, persevere, incur personal costs, go to courts, accommodate
anxieties and wait for years for an outcome. It is doubtful that any of this is
consistent with notions of effective accountability and democracy. The
freedom of information laws may enable citizens to secure some pieces of
useful information, but cannot reconcile the tensions between secrecy,
democracy, privacy and the pursuit of private and public interests because
they are inherent in neoliberalism. The extent of tensions is likely to depend
on local histories and institutional structures. Hopefully, others would engage
with the state apparatus to provide further insights into the politics of
66 Freedom of Information Act 2000 (FOIA) Decision notice FS50601833, 12
January 2017 (
notices/2017/1625676/fs50601833.pdf; accessed 30 May 2017)
Ahrens, T. Styles of accountability. Accounting, Organizations and Society,
1996: 21(2/3):139–73.
Arnold, P. and Sikka, P. Globalization and the State-Profession Relationship:
The case of the Bank of Credit and Commerce International, Accounting,
Organizations and Society, 2001: 26(6): 475-499.
Barone, S. D. Secrecy in the Bush Administration, New York: Nova: 2006.
Beck, U. Risk society: Towards a new modernity, London: Sage: 2003.
Bennett, C. From the Dark to the Light: The Open Government Debate in
Britain, Journal of Public Policy, 1985: 5(2): 187-213.
Bingham, The Right Honourable Lord Justice. Inquiry into the Supervision of
The Bank of Credit and Commerce International, London: HMSO: 1992.
Birkinshaw, P. Freedom of information and its impact in the United Kingdom,
Government Information Quarterly, 2010: 27(4): 312-321.
Board of Banking Supervision, Report of the Board of Banking Supervision
inquiry into the circumstances of the collapse of Barings, London: HMSO: 1995.
Broadbent, J. and R. Laughlin (2003), Control and legitimation in government
accountability processes: the private finance initiative in the UK, Critical
Perspectives on Accounting, 2003: 14(1-2): 23-48.
Brooke, H. The Silent State: Secrets, Surveillance and the Myth of British
Democracy, London: Heinemann: 2010.
Carter, M. and Bouris, A. Freedom of Information: Balancing the Public
Interest, London: The Constitutional Unit, School of Public Policy, University of
London: 2006 (
Castells, M. The rise of the network society, Chichester: Wiley: 2010.
Cousins, J., Mitchell, A. and Sikka, P. Secret Government and Privileged
Interests, Political Quarterly, 1993: 64(3): 306-314
Ellington, T.C. Secrecy and disclosure: Policies and consequences in the
American experience, in Susan Maret (ed.) Government Secrecy, Bingley:
Emerald: 2011: 67-90.
Foucault, M. The Eye of Power, in C. Gordon (ed.) Power/Knowledge:
Selected Interviews and Other Writings 1972-1977. New York: Pantheon
Books: 1980
Habermas, J. Legitimation Crisis, Heinemann, London: 1976
Hall, P.A. and Soskice, D. An Introduction to Varieties of Capitalism’ in Hall,
P.A. and Soskice, D. (eds.), Varieties of Capitalism: The Institutional
Foundations of Comparative Advantage. Oxford: Oxford University Press,
pp.170, 2001.
Hennessy, P. The Secret State: Preparing for the worst 1945-2010, London:
Penguin: 2010.
Hirst, P.Q. Associative democracy: New forms of economic and social
governance, Cambridge: Polity: 1994.
Hood, C. and Heald, D. Transparency, The Key to Better Governance?
Oxford: Oxford University Press: 2006.
Information Commissioner’s Office, Freedom of Information Act Awareness
Guidance No 3: The Public Interest Test, 2006
Jacobs, E. Tribunal Practice and Procedure Tribunals under the Tribunals,
Courts and Enforcement Act 2007, London: Legal Action Group: 2009.
Killick, M. Fraudbusters: The Inside Story of the Serious Fraud Office, London:
Indigo: 1998.
McSweeney, B. Action Research: mission impossible? Commentary on
“Towards the increased use of action research in accounting information
systems”, Accounting Forum, 2000: 24(4): 379-390.
Mitchell, A. and Sikka, P. Accountability of the Accountancy Bodies: The
Peculiarities of a British Accountancy Body, British Accounting Review, 2004:
36(4): 395-414.
Mitchell, A. and Sikka, P. The Pin-Stripe Mafia: How Accountancy Firms
Destroy Societies, Basildon: Association for Accountancy & Business Affairs,
Mitchell, A., Sikka, P., Cooper, C., Arnold, P. and Willmott, H., The BCCI Cover-
Up, Basildon: Association for Accountancy & Business Affairs, 2001.
Mitchell, A. Sikka, P. and Willmott, H. Sweeping it under the carpet: the role of
accountancy firms in moneylaundering, Accounting, Organizations and Society,
1998: 23(5/6): 589-607.
O’Connor, J. The Meaning of Crisis: A Theoretical Introduction, Oxford: Basil
Blackwell: 1987
O’Neill, O. BBC Reith Lectures: Trust and Transparency. 2002
Offe, C. Contradictions of the Welfare State, London: Hutchinson: 1984.
Palast, G., The Best Democracy Money Can Buy, London: Pluto: 2002.
Pierson, P. Dismantling the Welfare State? Reagan, Thatcher and the Politics
of Retrenchment, Cambridge: Cambridge University Press: 1994.
Ponting, C., The right to know: The inside story of the Belgrano affair, London:
Sphere Books: 1985.
Ponting, C., Secrecy in Britain, Oxford: Blackwell: 1990
Reid, M., The Secondary Banking Crisis 1973-1975, Its Causes and Courses,
Basingstoke: Macmillan: 1982.
Roberts, A. Governmental adaptation to transparency rules, in Hood, C. and
Heald, D. Transparency, The Key to Better Governance? Oxford: Oxford
University Press: 2006.
Roberts, J. The possibilities of accountability." Accounting, Organizations and
Society, 1991: 16(4): 355-368.
Sikka, P. and Willmott, H. Illuminating the State-Profession Relationship:
Accountants Acting as Department of Trade and Industry Investigators, Critical
Perspectives on Accounting, 1995: 6(4): 341-369.
Simmel, G. The Sociology of Georg Simmel, Free Press, Glencoe, Illinois:
Free Press: 1950.
Sinclair A. The chameleon of accountability: forms and discourses,
Accounting, Organisations and Society,1995: 20(2/3):219–37.
UK Africa All Party Parliamentary Group, The Other Side of the Coin: The UK
and Corruption in Africa, London: AAPPG: 2006
UK Department of Trade and Industry, London and County Securities Group
Limited, London: HMSO: 1976.
UK Department of Trade and Industry, London Capital Group, London:
HMSO: 1977.
UK Department of Trade and Industry, Gilgate Holdings Limited, London:
HMSO: 1981 (prepared by P.L Ainger and R.A Morrit).
UK Department of Trade and Industry, Ramor Investments Limited; Derriton
Limited, London: HMSO: 1983 (prepared by H Carlisle QC and J Darby).
UK Department of Trade and Industry, Mirror Group Newspapers plc (two
volumes), London: The Stationery Office: 2001.
UK House of Commons Library, Research Paper 04/84: Freedom of Information
Implementation, London: House of Commons: 2004
UK House of Commons Trade and Industry Committee, Company
Investigations, London: HMSO, 1990.
UK House of Commons Treasury and Civil Service Committee, Banking
Supervision and BCCI: The Role of Local Authorities and Money Brokers,
London: HMSO: 1991.
UK House of Commons Treasury and Civil Service Committee, Banking
Supervision and BCCI: International and National Regulation, London: HMSO:
UK House of Commons Treasury and Civil Service Committee, Banking
Supervision and BCCI: The Response of Bank of England, London: HMSO:
UK House of Commons Treasury and Civil Service Committee, Codes of
Practice and Related Matters, London: HMSO: 1992c.
United States General Accounting Office, Foreign Bank: Initial Assessment of
Certain BCCI Activities in the US, Washington DC: GAO: 1992.
United States Senate Permanent Subcommittee on Investigations, Money
Laundering and Foreign Corruption: Enforcement and Effectiveness of The
Patriot Act - Supplemental Staff Report on U.S. Accounts used By Augusto
Pinochet, Washington DC: USGPO: 2005
United States Senate Foreign Relations Subcommittee on Narcotics,
Terrorism and International Operations, The BCCI Affair: Hearings Part 1
August 1, 2 and 8 1991, Washington DC: US Senate Committee on Foreign
United States Senate Committee on Foreign Relations, The BCCI Affair: A
Report to the Committee on Foreign Relations by Senator John Kerry and
Senator Hank Brown, Washington: USGPO: 1992.
Vincent, D. The Culture of secrecy: Britain, 1832-1998, Oxford: Oxford
University Press, 1998.
Weber, M. From Max Weber: Essays in Sociology, London: Routledge &
Kegan Paul: 1948 (translated and edited by H.H. Gerth and C. Wright Mills).
Weber, M. Economy and society; an outline of interpretive sociology, New
York: Bedminster Press, 1968
Young, I.M. Inclusion and Democracy, Oxford: Oxford University Press: 2000.
... In the context of fraud research, these authors have contributed significantly to developing theories and methodologies for detecting and preventing fraud. These results suggest that these authors have conducted research into the causes and consequences of fraud and the legal and ethical implications associated with fraudulent activities (e.g., see Carpenter, 2007;Free & Murphy 2015;Sikka, 2017;Street & Hermanson, 2019;Trompeter et al., 2014;Wilks & Zimbelman, 2004). Being highly cited meant that the works of these authors have been recognized as influential and valuable to other researchers in critical fraud research. ...
... Similarly, Rezaee (2005) and Brennan and McGrath (2007) found that economic pressures and the perceived ''incentives'' tied to deceptive financial reporting are the main factors in the decisions of publicly traded companies to indulge in fraudulent accounting. The normalization of fraud as a natural byproduct of poor economic conditions weaponized the competitive spirit attached to the capitalist economic system (Drogalas et al., 2017;Morales et al., 2014;Sikka, 2017). ...
... Dorminey et al. (2012) Issues in Accounting Education X X The audit community needs to move beyond the fraud triangle to understand fraud and fraud risks. Power (2013) Accounting, Organization and Society X Fraud risks must be understand from a broader historicity of risk that expands as an organization response Nieschwietz et al. (2000) Journal of Accounting Literature X X Audit risk assessment fails to consider that management may acting strategically to falsify audit evidence Dilla and Raschke (2015) International Journal of Accounting Information Systems X X Successful fraud detection depends on assessments that detect patterns in the organizational data McVay and Szerwo (2021) Accounting and Business Research X Key incentives and controls are not enough to produce high quality reports and mitigate fraud Williams (2013) Accounting, Organizations and Society X X Surveillance technologies, as a matter of practice, are modesty limited by their own logic to combat fraud Sikka (2017) Accounting Forum X X Fraud effort is obstructed by bureaucratic and legalistic process Ugrin and Odom (2010) Journal of Accounting and Public Policy X The effectiveness of controls are limited by a wide range of social, environmental, and demographic factors Wang et al. (2019) The British Accounting Review X Punishment as a form of controls is ineffective in addressing accounting fraud Wilks and Zimbelman (2004) Contemporary Accounting Research X Auditors who decomposed fraud risk assessments are more sensitive to opportunity and incentive cues when making overall assessment Norman et al. (2010) Accounting, Organization and Society X X Fraud risk decomposition and risks assessment by internal auditors have proven to be ineffective when reporting risks discourse of fraud as not being related to complex environmental factors but to defects in the individual's frail morality and breakdown of organizational controls, both of which combined and contribute to action alternatives that are criminogenic (Davis & Pesch, 2013;Donegan & Ganon, 2008;Morales et al., 2014;Power, 2013). Of prime interest in the individualization of fraud risk are the processes by which the organizational setting comes to have particular moral norms conducive to fraud and the levels of enforcement associated with those moral norms concerning the opportunities they present (Neu, Everett, Rahaman, & Martinez, 2013;Sikka, 2015 ). ...
Full-text available
Drawing on an analysis of 208 articles, this paper argues that while the fraud literature varies on the diagnosis of fraud, it is rooted in a common narrative as to its nature and causes. Specifically, this paper adopts an investigative approach to understand how fraud is often researched and shapes audit policies and practices. The findings reveal that fraud is generally looked at as an individual and/or organizational phenomenon, thereby allowing the meso-level of analysis to escape scrutiny. A gap, therefore, exists in being able to detect fraud at the meso-level, such as in financial services (i.e., LIBOR rigging). A meso-level analysis of fraud will allow researchers to highlight problems across the general field like the banks rigging the LIBOR or distorting the currency market as in the forex scandal. A meso-level analysis of fraud is important because it highlights the contagious behavior across the field and offers insights for fraud prevention and detection. Recognizing this unique epistemology will allow researchers to uncover new knowledge and not remain wedded to a reified understanding of fraud and fraud risks. Policymakers can derive insights and draft policies that reflect practitioners’ needs.
... Elites, in each sphere of activity, have succeeded or arrived at a higher echelon in the hierarchy (Aron, 1999). They include business (corporate) elites (Sikka, 2017), community elites, religious elites (Barro & McCleary, 2003), political elites (Aplin & Hegarty, 1980;Hadani, 2012) and professional elites (Aron, 1999). Essentially, elites have no restriction regarding their locale. ...
... We rely on the notion of "institutional void" to deepen our understanding of elitist influences. Institutional voids can provide opportunities for substitution by other institutional arrangements established by elites to influence institutional outcomes (see Lepoutre & Valente, 2012;Sikka, 2017). As such, we investigate the extent to which institutional voids and elites have provided the conditions for the growing levels of corruption and poor corporate governance in weak institutional contexts. ...
... They demonstrate how elite-led corrupt networks skilfully employ accounting practices and social interactions to enable corruption. In particular, the emergence of corporate elites has resulted in 'managerialism' where top managers possess extensive powers to pursue their interests with the minimal constraint from shareholders (Davis, 2005;Lozano, Martinez, & Pindado, 2016;Sikka, 2017). This outcome bears sizable consequences for corporate governance as corporate elites face several attempts to promote corporate governance (Sariol & Abebe, 2017), stemming from the increasing power of stakeholders and greater board independence, amongst others. ...
... Kritik tersebut muncul baik karena ke terbatasan perspektif ataupun keterbatasan te ori fraud triangle itu sendiri (Cheliatsidou et al., 2021). Selain itu, kritik pedas yang menyatakan bahwa interpretasi teori fraud triangle hanya un tuk menguntungkan kegiatan ACFE dan dise barkan oleh mereka tanpa dasar ilmiah (Sikka, 2017). Keduanya hanya memberikan kuliah tentang motivasi penipuan yang memanfaatkan langsung tiga faktor umum "tekanan, kesempatan, dan rasionalisasi". ...
... Dalam mengantisipasi faktor kesem patan, organisasi akan membuat suatu sistem untuk mendeteksi risiko, termasuk menutup peluang bagi individu atau kelompok yang hen dak melakukan kecurangan pada organisasinya. Sebagian besar organisasi memiliki sistem pe ngendalian internal untuk mengurangi risiko ke curangan dan beragam regulasi untuk audit serta tindakan pencegahan seperti pelatihan integritas dan pengaturan laporan keuangan (Sikka, 2017;Tickner & Button, 2020). Oleh sebab itu, organisasi perlu menanamkan akhlak terpuji untuk membangun integritas demi pencegahan kecu rangan laporan keuangan yang lebih efektif. ...
Full-text available
Abstrak – Bagaimana Pandangan Filfasat Etika tentang Kecurangan Laporan Keuangan? Tujuan Utama – Penelitian ini bertujuan untuk menggali akar dan etika manusia dalam melakukan kecurangan laporan keuangan. Metode - Penelitian ini menggunakan metode penyelidikan narasi. Filsafat etika digunakan sebagai pisau analisis untuk mengungkap akar kecurangan laporan keuangan. Temuan Utama – Penelitian ini menghasilkan usulan konsep etiologi akar kecurangan laporan keuangan. Pelaku kecurangan laporan keuangan tidak memiliki keutamaan jiwa. Konsep filsafat etika Ibnu Miskawaih memberikan pandangan tentang proses terbentuknya tabiat seseorang untuk melakukan kecurangan laporan keuangan. Model penyebab kecurangan laporan keuangan yang ini dapat melengkapi kekurangan dari association differential theory dan fraud triangle. Implikasi teori dan Kebijakan – Inovasi dari beragam paradigma akan memberikan kontribusi terhadap penelitian kecurangan laporan keuangan di masa depan. Penelitian ini memberikan pandangan baru untuk pencegahan kecurangan laporan keuangan. Kebaruan Penelitian - Penelitian ini mengeksplorasi akar penyebab dan menawarkan model baru yang lebih luas dari teori fraud triangle. Abstract – What is the Philosophical Ethical View of Fraudulent Financial Statements? Main Purpose – This study explores human roots and ethics in committing fraudulent financial statements. Method - This study uses a narrative inquiry method. Ethical philosophy is used as an analytical knife to reveal the roots of fraudulent financial statements. Main Findings – This study resulted in a proposed concept of the root etiology of financial statements fraud. The perpetrators of financial statement fraud do not have the importance of the soul. The concept of Ibn Miskawaih's ethical philosophy provides a view of forming a person's character to commit fraudulent financial statements. This model of the causes of fraudulent financial statements can complement the association differential dan fraud triangle theory. Theory and Practical Implications – Innovations from multiple paradigms will contribute to fraudulent financial statements research in the future. This research provides a new perspective on the prevention of financial statement fraud. Novelty - This study explores the root causes and offers a new broader model of the fraud triangle theory.
... According to the latest report issued by the Association of Certified Fraud Examiners (ACFE), the secondhighest number of reported cases and perpetrators have been linked to accounting departments in organisations (ACFE, 2020). Given international corporate scandals and corrupt activities, the accounting profession is facing increasing criticisms which may threaten its credibility (Liyanapathirana et al., 2021;Sikka, 2017). ...
Full-text available
Purpose-This paper seeks to understand how accountants in Sri Lanka perceive the effect of religiosity on ethical decision-making. Sri Lanka is a highly religious country, but it also has a high level of corruption so understanding ethical decision-making in this context is important for the accounting profession. Design/methodology/approach-Data were collected using semi-structured interviews with 40 accountants in Sri Lanka with decision-making roles. Virtue ethics theory and content analysis were used to analyse the interview data and categorise accountants' responses into themes using an interpretive methodology. Findings-The paper identifies three ways in which religiosity can influence accountants' ethical decision-making. Firstly, through a faith in the beliefs of their religion; secondly, through awareness of religious prescriptions and virtues; thirdly, through a commitment towards religious practices and rituals. However, the findings show that religiosity does not always influence the ethical decision-making of accountants due to pervasive corruption, which is a cultural norm in contemporary Sri Lanka. Thus, it is evident that there is an interrelationship between religious and cultural environments which can influence ethical decision-making. Originality-While the religiosity of accountants can support ethical decision-making, the findings of this paper show that the cultural norm of corruption can mediate this connection as the evidence shows that accountants with a strong religious background, irrespective of their religion, may still act unethically when corruption is a cultural norm.
... Moreover, women are more likely to take sensible risks than men, preventing deplorable situations. Overall, businesses run by women appear to have better performance and reduce controversial issues [51]. In addition, the aim of the market should not be focused on replacing male leaders with female ones, but to allow the possibility in both states and companies for the equal climbing of both sexes. ...
Full-text available
Environmental, Social, and Governance (ESG) criteria are novel and exciting tools of corporate disclosure for decision making. Using quantitative and qualitative analyses, the present study examined the key characteristics and trends of ESG controversies in the European market. At the sametime, itidentifiedthecontroversies’ determinants. Abibliometric analysis wasthequalitative method employed on the data derived from Scopus using Biblioshiny software, an R package. The quantitative analysis involved an international sample of 2278 companies headquartered in Europe from 2017–2019 being studied using a Generalized Linear Model. The findings of this research highlighted the role of the “S” and the “G” dimensions of the ESG controversies as the most crucial in affecting controversies. Women are under-represented in the business hierarchy, but their natural characteristics such as friendliness and peaceability lead to a low level of illegal business practices. However, independent of gender, executives have personal gains that they want to satisfy. Thus, executives may become involved in unethical practices and harm their colleagues and the business’s reputation. On the other hand, democracy emerged as one of the most disputed factors. Democracy gives people the voice to express themselves and publicly support their ideas without restrictions. Although, the regression results showed that democracy is not always operated as the “pipe of peace” and can affect, to some extent, controversies.
... There are of course tactics available to organisation to hinder or dissuade requests (Luscomebe and Walby 2017; Sikka, 2017). Max Schrems's, for example, initial efforts to access his personal information from Facebook (see Hill 2012), where he was provided with reams and reams of data is one such technique. ...
Full-text available
This chapter considers Freedom of Information Act (FOIA) as a viable tool for academic research. To date, journalist, campaigners or concerned consumers have been to the forefront in using FOIs to gain information on issues as diverse as politician’s expenses, the cost of policing a royal event or the levels of food hygiene in restaurants. Yet, this line of enquiry appears to be infrequently used by academic researchers. The chapter concentrates on the United Kingdom and will offer five areas for consideration. First, we consider the value of FOIs as a research tool. Second, we reflect upon some of the limitations to using FOIs in research. Third, we locate the FOIA within a broader process of modernising digital information and highlight some of the challenges that can present for researchers via this trend. Fourth, we review effective use of FOI in research. Finally, we offer some observations from our own nascent research project that is using FOIs as a key methodological approach. The chapter concludes by stressing the usefulness of the FOIA for researchers to produce democratising and politically impactful research. The chapter’s aim is to highlight the practicalities of applying this method of enquiry and to further its contribution to academic research.
... According to (Agung, 2015), and Rae and Subramaniam (2008), an efficient control system can improve the processes of organizational and financial reporting and assures compliance with the laws and regulations, will probably stop not simply errors, however fraud similarly. In developed countries, a lot of studies (e.g., Bhasin, 2015;Sikka, 2017;Nakpodia and Adegbite, 2018) have ebulliently investigated the problem of fraud. In any case, with regards to banks operating in Jordan, the topic has not been specifically inspected. ...
Full-text available
This study chiefly makes an attempt to look at the result of accounting information system (AIS) on detection of fraud, with the use of control as a moderator. the information gathered from 225 staff of Jordanian banks were analyzed with PLS 3, and therefore the results show the necessary role of control on the linkage between AIS and detection of fraud among the examined banks. AIS and detection of fraud are absolutely and considerably correlate. The outcomes obtained are a valuable addition to the literature concerning factors impacting detection of fraud in countries in geographical region as well as Jordan. This study conjointly brings further justification for the scrutiny of AIS and internal controls potency.
This chapter utilises a neo-MacIntyrean and Taylorian perspective to analyze whether recent neoliberal and postmodern accountability reforms can address issues of corruption in civil society and the state. Over the course of the past decade increasing social crises and issues of corruption have divided many communities. Based on a detailed analysis of the role of civil society we produce a theoretical narrative of political transformation through social accountability processes and the virtues. This is to examine (a) the rise of a new corrupt and hegemonic political despotism shaped by neoliberal political reforms, (b) the potential for a virtues-based strategy reaching out to both business and civil society, and (c) the possibilities of challenging neoliberalism and unethical practices via state intervention nurtured by virtuous practices.
Full-text available
Purpose This paper applies Bhabha’s concept of the third space to frame an understanding of Prem Sikka’s use of digital media to bridge the academic–activist binary. In doing this, the paper makes two contributions. First, it conceptualises Sikka’s engagement, and second, through the lens of the third space, it analyses it to establish whether, in the era of the neoliberal corporatised university, public intervention has the potential to generate new perspectives and new knowledge. Design/methodology/approach Sikka’s articles and blogs for the period 20 February 2002 to 15 April 2020 were analysed using Leximancer, a textual analysis software programme that displays the output visually. A discriminant analysis was used to identify where each year of the study is situated in the overall semantic analysis. Netnography, the examination of archived published texts, was then used to analyse the responses by members of the public, academics, accountants and auditors, tax experts, policy makers and regulators to Sikka’s digital media engagement. Findings As a third space practitioner, Sikka has overcome some of the shortcomings associated with academic research to challenge the activities of professional accounting firms, regulatory bodies and multinational corporations. Through extending the boundaries of accounting and accountability, he has facilitated new radical alliances aiming to create a just and equitable society. The paper also finds that by opening up a third space of engagement, academic activists’ work can play an essential part in social transformation and emancipatory change framed in terms of social justice and equity. Originality/value This is one of the few papers to provide an in-depth examination of the activities of an accounting activist over twenty years.
Full-text available
This paper examines the budgeting process in three organisations that differ in their profit orientation and the industries within which they operate, using a social capital perspective. A qualitative case study approach was used. Semi-structured interviews were used to interview 38 managers involved in the budgeting process at the three case study organisations. The study highlights the importance of the social side of budgeting in organisations. Social capital arises through people working together and achieving more than they could working as separate individuals. An aspect of budgeting common to all organisations was the participation of interviewees in setting the budget. The social aspects of budgeting are not largely explored in the literature, and social capital theory is considered in order to shed light on this issue. The study provides insight for practitioners and policy makers on how social aspects influence (or not) the budgeting processes of organisations with different scopes.
Full-text available
Tax revenues are the life-blood of all democracies. Without these no state can alleviate poverty or provide social infrastructure, healthcare, education, security, transport, pensions and public goods that are necessary for all civilised societies. All over the world tax revenues are under relentless attack from a highly organised tax avoidance industry dominated by four accountancy firms: Deloitte, PricewaterhouseCoopers, KPMG and Ernst & Young. They employ thousands of individuals for the sole purpose of undermining tax laws which does not create any social value, but enables corporations and wealthy elites to dodge corporate tax, income tax, National Insurance Contributions (NIC), Value Added Tax (VAT) and anything else that might enable governments to improve the quality of life. The loss of tax revenues is a major cause of the current economic crisis that is inflicting misery on millions of people. Tax avoidance is part of the guerrilla warfare conducted by accountancy firms against the people. Each year, about 30%-40% of the financial legislation outlaws tax dodges dreamt up by accountancy firms. The UK tax tribunals and courts hear around 11,000 cases and many of these relate to dodges that have no economic substance. The UK is estimated to be losing around £100 billion of tax revenues each year and a large part of this is due to the activities of the Big Four accountancy firms. Despite record number of millionaires, billionaires and levels of corporate profitability, the UK tax take in 2010-11 added up to 37.2% of the GDP, compared to 43% in 1976. Rather than challenging the tax avoidance industry successive governments have shifted the tax burden to less mobile capital, labour, consumption and savings, as evidenced by higher NIC and VAT and the lowering of thresholds for higher rates of income tax. In the US, some accountancy firms have been fined for facilitating tax evasion and their partners have been sent to prison. They have paid large amounts to settle allegations of bribery and corruption. Other countries have fined them for operating price-fixing cartels. There is little retribution in the UK. Despite judges outlawing their tax dodges, successive governments have failed to investigate the firms, or prosecute their partners. Instead, the partners of major accountancy firms are given peerages, knighthoods, public accolades and government consultancies, all funded by taxpayers. The same firms have colonised regulatory bodies, fund political parties and provide jobs for former and potential ministers. This penetration of the state has bought them political insurance and their anti-social practices continue to inflict enormous social damage.
This book offers a careful examination of the politics of social policy in an era of austerity and conservative governance. Focusing on the administrations of Ronald Reagan and Margaret Thatcher, Pierson provides a compelling explanation for the welfare state's durability and for the few occasions where each government was able to achieve significant cutbacks. The programmes of the modern welfare state - the 'policy legacies' of previous governments - generally proved resistant to reform. Hemmed in by the political supports that have developed around mature social programmes, conservative opponents of the welfare state were successful only when they were able to divide the supporters of social programmes, compensate those negatively affected, or hide what they were doing from potential critics. The book will appeal to those interested in the politics of neo-conservatism as well as those concerned about the development of the modern welfare state. It will attract readers in the fields of comparative politics, public policy, and political economy.
This chapter discusses the politics of multiculturalism as a kind of identity politics. It argues the concept of structural difference, as distinct from cultural group. Analysing structural difference and structural inequality, then, helps to show why these movements are not properly interpreted as identity politics. The chapter defines social structure, and more specifically structural inequality, by rebuilding elements from different accounts. Norms of inclusive communicative democracy require that claims directed at a public with the aim of persuading members of that public that injustices occur must be given a hearing, and require criticism of those who refuse to listen. Common good theorists no doubt fear that attending to group differences in public discussion endangers commitment to co-operative decision-making. Only explicit and differentiated forms of inclusion can diminish the occurrence of such refusals, especially when members of some groups are more privileged in some or many respects.
'Transparency' is widely canvassed as a key to better governance, increasing trust in public-office holders. But it is more often preached than practised, more often referred to than defined, and more often advocated than critically analysed. This book exposes this doctrine to critical scrutiny from a range of disciplinary perspectives, including political science, philosophy, and economics. It traces the history of transparency as a doctrine of good governance and social organization, and identifies its different forms; assesses the benefits and drawbacks of measures to enhance various forms of transparency; and examines how institutions respond to measures intended to increase transparency, and with what consequences. Transparency is shown not to be a new doctrine. It can come into conflict with other doctrines of good governance, and there are some important exceptions to Jeremy Bentham's famous dictum that 'the more closely we are watched, the better we behave'. Instead of heralding a new culture of openness in government, measures to improve transparency tend to lead to tighter and more centralized management of information.
In January 2005, the United Kingdom's Freedom of Information Act (FOIA) came into force, providing British citizens with a limited but justiciable right to government information. The Blair government promised that the new law would make two important contributions to British political life. The first would be a fundamental change in the predispositions of officials regarding the release of government information. Lord Chancellor Charles Falconer predicted that the FOIA would lead to ‘a new culture of openness: a change in the way we are governed’. This fundamental ‘change in the way we are governed’ was expected to produce a follow-on effect: the restoration of public trust in government. The linkage between a ‘vigorous commitment to freedom of information’ and the ‘renewal of trust’ was often made in the months before implementation of the law. The critical point is that the FOIA does not reduce the political salience of complaints about governmental secrecy and lack of transparency in the public sector.