MI5 'withholding evidence on BCCI'

MI5 is believed to be withholding crucial evidence on the collapse of the Bank of Credit and Commerce International.

The security agency, headed by Stella Rimington, is understood to hold internal BCCI documents and reports. They were not made available to Senator John Kerry when he prepared his US Senate report published last week or Lord Justice Bingham's inquiry into the Bank of England's supervision of BCCI.

The revelation of MI5's involvement is bound to increase demands for early publication of the Bingham report, expected to be severely critical of the Bank of England. Government sources have indicated it will not be released until the opening of Parliament on 19 October at the earliest.

Senator Kerry said: 'A British source has told the Bank of England and British investigators that BCCI was used by numerous foreign intelligence agencies in the United Kingdom. The British intelligence service, the MI5, has sealed documents from BCCI's records in the UK which could shed light on this allegation.'

In his 800-page report, the senator is severely critical of the Bank of England's handling of the BCCI affair. He accuses Bank officials of colluding with BCCI, ignoring warnings about its imminent collapse and impeding any subsequent investigation by allowing BCCI to move records outside the UK .

The mysterious 'Mr X' revealed by the Independent on Sunday last week to have given sworn evidence to Lord Justice Bingham that he saw Bank of England officials taking bribes from senior BCCI executives has spoken for the first time to the press. Mr X, whose identity was protected by Lord Justice Bingham, is a former Pakistani military intelligence officer and accountant. He said that he saw two officials, one of whom is an adviser on international banking and the other a former director in the supervision department who has since left the organisation, attend two BCCI parties.

One party was at a flat near the Dorchester Hotel on the corner of South Street, Mayfair, and the other was near Harrods in Knightsbridge. On each occasion he saw the adviser receive a briefcase full of dollar bills and leave immediately with the director. Both their names, he claimed, had been supplied to the Serious Fraud Office, which has been called in by the Bank of England to investigate his allegations.

In an unprecedented move, the Bank of England has reacted angrily to Senator Kerry's criticisms, saying he did not take evidence from its officials or have access to its records or check facts, yet made allegations against it that had 'no basis in fact'.

(Photograph omitted)