HC Deb 24 October 1985 vol 84 cc181-2W
Mr. Sedgemore

asked the Chancellor of the Exchequer (1) if he will set up an inquiry to examine the evidence in the letter to him from the hon. Member for Hackney, South and Shoreditch and enclosures of 4 October together with subsequent evidence relating to the conduct of members of the Bank of England, Mahmud Sipra, his solicitors and others in matters arising out of the Johnson Matthey banking collapse;

(2) if he will set up an inquiry to examine the conduct of (a) the Governor of the Bank of England, (b) directors of Johnson Matthey bank appointed by the Bank and (c) David Curtis and Mr. Thomason of Hambros Bank in relation to their activities concerning Johnson Matthey bank.

Mr. Lawson

The hon. Member's letter to me of 4 October, which was reported in the press, raised criminal and other allegations against the management of Johnson Matthey Bankers, their advisers Hambros Bank, and the Bank of England. The hon. Member also made the accusation that the police investigation of which I informed the House on 17 July, at column 320, was "a cover up". I referred the hon. Member's letter to the law officers and to the Governor of the Bank of England.

With the Governor's agreement the chairman of JMB has today sent the hon. Member a detailed letter denying the hon. Member's allegations in categorical terms. A copy is being placed in the Library of the House. As for the grave accusation of a "cover up", the hon. Member received earlier this week an equally categorical rebuttal from my hon. and learned Friend the Solicitor-General, and I am arranging for the text to be published in the Official Report. If there are any matters for the police to pursue I am confident they will do so. I see no need for an inquiry into any of the matters which the hon. Member has raised and I hope that, in the light of the very full replies which he has received, he will withdraw his allegations.

Following is the letter:

21 October 1985

Brian Sedgemore Esq MP

House of Commons

London SW1

Dear Brian,

Your letter of 4 October to the Chancellor of the Exchequer was copied to the Attorney-General and to the Governor of the Bank of England, because it raised matters falling within their respective responsibilities. In the continuing absence of the Attorney-General following his recent operation I am replying on his behalf.

I have of course taken serious note of your grave allegation that the preliminary police investigation into JMB is a cover-up, and that it is being constrained by less than full cooperation from JMB itself. The Controller of Fraud Investigation Groups within the DPP has discussed with Detective Chief Superintendent Squires (who is leading the investigation into JMB's affairs) your allegation that the Bank of England has "kept a lid" on the investigation by, in particular, restricting access to papers. I am informed that DCS Squires disagrees: he has no complaint to make of lack of cooperation from the present management of JMB. Up to now it has not been necessary for the police to seek access to the whole of JMB's papers, but whatever they have needed to see has in each instance been made freely available. I understand that Treasury officials have also been in touch with JMB, whose Chairman has reaffirmed JMB's full and willing cooperation with the police investigation.

I hope I do not need to assert to you that in the conduct of such an investigation the Police Service is wholly independent of the Executive, as is the DPP (who is subject only to the superintendence of the Attorney-General).

Your letter of 4 October also outlined allegations made by a Mr. Hussein that there had been an attempt on behalf of JMB to procure the execution of a back-dated agreement, which would have had the effect of giving JMB priority over other creditors of companies owned by Sipra, thereby defrauding them. I understand Mr. Hussein has been seen by the police who are looking into the matter.

I do not agree with your assertion that the criminal process is "wholly unsuited to find out what has happened". In the face of allegations that serious criminal offences have been committed I regard it as entirely appropriate.

I am copying this letter to the Chancellor.

Yours,

Patrick