First with Financial Comment from Arabia

Bahrain sacks minister under investigation for money laundering

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The King of Bahrain Hamad bin Eisa Al Khalifa yesterday sacked state minister Mansour bin Rajab who is under investigation for alleged money laundering.

His arrest last Thursday caused uproar in Bahrain but by the evening the minister appeared in his majlis. He then denied reports that he was implicated in money laundering operations, protesting his innocence and saying that he would carry on his government work.

Official investigation

A police statement said: ‘An official has been detained on charges of committing money laundering transactions domestically and abroad. The ministry (of interior) noticed the events in early 2009, and therefore monitored the official’s activities, meetings and communications closely and secretly.’

In a telephone interview with Al Arabiya TV the former minister said: ‘My dismissal is perhaps aimed at facilitating the ongoing investigation. I have the right to defend myself … and the accusations are completely untrue.’

Bahrain has long been a major regional financial centre, although in recent years that title has largely past to Dubai with its English language, multi-national regulatory system. Bahrain still operates in Arabic and under Shariah Law.

But Bahrain is the regional headquarters of the anti-money laundering watchdog the Financial Action Task Force and issued a stern anti-money laundering law in the wake of 9/11. No high profile investigations or arrests have been made since then.

Big network

The National newspaper reported today ‘local media say there have been other arrests across the Gulf, including in Kuwait and Dubai, and the network laundered money for drug-traffickers and the Iranian Revolutionary Guard, something Bahraini officials have yet to deny. Most reports say the sum laundered exceeded $12 million, though other estimates have put it as high as $80 million’.

This is almost bound to be a trial by media, and bloggers in Bahrain have been active. All that can be usefully said at this moment is that the minister concerned, who was allowed to go home after being questioned last Thursday is implicated in a major financial scandal, and doubtless further facts will emerge in due course.

In the meantime this story is bound to be the subject of a myriad of conspiracy theories and ill-informed speculation. But in this case the truth may yet trump any fiction.


Written by Peter Cooper

March 23, 2010 at 8:50 am

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