Awal Bank - Purported Central Bank of Bahrain Letter

A few days ago I was given what is purported to be a copy of a letter from the Governor of the Central Bank of Bahrain to the Attorney General of the Kingdom of Bahrain.

First of all, it's very important to state up front that I have no way of verifying the authenticity of this document.  

Second, the copy I have does not bear any written legend restricting its audience such as "Strictly Private" or "Secret" etc.  And it appears that this letter or one close to it served as the basis for the Al-Seyassah (Kuwait) article I posted on earlier.  So it seems in one form or another to be "out" for public comment.

2009/204/MM

30 July 2009

His Excellency the Distinguished AlSayyid Abdul Rahman AlSayyid

First Public Lawyer (Attorney General)

Public Prosecution

As-Salam Alaykum wa Rahmat Allah wa Barakatuhu

I want to inform Your Excellency that Awal Bank, a bank licensed by the Central Bank of Bahrain, has encountered difficulties in settling its obligations toward creditors (or lenders) - local and international banks and financial institutions - beginning in May 2009.

Immediately upon learning of this [AA: Awal's inability to pay creditors], the Central Bank engaged a specialist company - Hibis Company - as an investigator to determine the circumstances that caused this inability/difficulty.  It has become clear from the preliminary results of the investigation that there were numerous violations of Central Bank regulations, excesses (going beyond proper bounds) in the management of the bank  which constitute a form of deceptions, breach of trust, embezzlement, and money laundering.

In this regard during previous years the management of the bank embarked on providing the Central Bank misleading reports/statements on the operations of the bank.  Among the most prominent of violations that the management engaged in was the presentation (appearance) of profits though fraud and forgery.  In addition to the lack of implementation of regulations specifically on the combating of money laundering which has led to suspicions of the involvement of the bank in this activity.

Based on these dangerous excesses/violations which have led to the insolvency of the bank towards its creditors, the Central Bank has decided to place the bank under Administration according to Article 136 of the Central Bank of Bahrain and Financial Institutions Law #64 of 2007.  Your Excellency knows quite well also that the conduct/actions which the management of the bank engaged in which led to its insolvency have negative reflections on the reputation of the banking sector in the Kingdom of Bahrain, especially given the result of its large dealings which were concluded with regional and international financial institutions.

On that basis, the Central Bank of Bahrain decided to refer this case to the Public Prosecutor to take the legal actions you deem appropriate in this matter.

We would like to draw your kind (noble) attention to the following individuals whose names are in the "sphere" of suspicion according to the Hibis Report which is in the final stages of preparation and which we will provide you shortly.  For this reason, we trust that you will prevent them from leaving the Kingdom to protect the conduct of the investigation in this case.

There then follows a list of 11 names.  

[I have deliberately not mentioned the names of the 11 individuals listed in this letter as there is an ongoing investigation.  And perhaps more important this document is unverified.  Is it actually the CBB's letter?]

Then a final salutation and a signature.

At this point it is appropriate to note that as far as I know all the individuals who have been named in this list deny any wrongdoing.  Equally that none has been convicted by a competent Court of any wrongdoing.  And if the press reports I have read are complete, none have been charged with any crimes.  As I noted in an earlier post, often material witnesses are restrained from traveling so that they will be available to investigators during the investigation.

And finally yet again.  This is a purported copy of a letter issued by the Central Bank of Bahrain in this matter.  I cannot vouch for its authenticity.