Zayed Bin Sultan Al Nahyan - Collapse of BCCI

Collapse of BCCI

In 1972, Agha Hasan Abedi, a Pakistani banker who had set up a new bank called Bank of Credit and Commerce International (BCCI), approached Zayed for investment. Abedi had previously set up the United Bank of Pakistan in 1959, which, by 1971, had become a leading nationalized (publicly-owned) bank. Zayed fronted the majority of the investment for the BCCI. Bank of America (25%) and the CIA allegedly invested, too. It is claimed that the CIA was seeking a funding route for the mujahideen in Afghanistan, similar to the Investors Overseas Service and the Nugen Hand Bank in the 1960s.

By 1977, the bank was nearly insolvent. It took on the attributes of a Ponzi scheme, as it funded its operating expenses by deposits it received, rather than by returns from investments it made. In eight years, it reported assets of over $4 billion with over 150 branches in 46 countries. Bank of America reduced its shares, while holding companies in Abu Dhabi took on a controlling block.

In 1990, an audit of the BCCI by Price Waterhouse revealed an unaccountable loss of hundreds of millions of dollars. The bank approached Sheikh Zayed, who funded the loss in exchange for increasing his share to 78% of the bank. The bank was finally shut down in 1991 by the Bank of England. At the time, Zayed's shareholding was 77%.

In December 1991, further investigations found layers of criminal activity taking place throughout the bank. Law enforcement in the U.S. established the BCCI as an organized crime syndicate. Although Sheikh Zayed was not directly mentioned during interrogations, other family members were implicated in the criminal activity tied to the bank. The investigation found evidence of bribery, money laundering, arms trafficking, prostitution, and support of terrorism. See: CIA Reading Room Document of William Kerr dated October 25, 1991 for details of Iran Contra and El Salvador links.