StanChart held to high ransom from low moral ground
Investors carved HK$67 billion off Standard Chartered Bank yesterday, or nearly a sixth of its stock market value, despite the bank's quick denial of US regulator claims it engaged in illegal dealings with Iranian financial institutions.
SCMP, August 8
Let's review a little history here. In 1953 the US Central Intelligence Agency paid street gangs in Tehran to overthrow a democratically elected Iranian government that wanted to negotiate the price of Iran's oil rather than allow a British-American consortium to dictate it.
The CIA then imposed on the Iranian people a sham monarch who maintained his rule through extreme cruelty, squandered the national assets and regularly offended their religious sensibilities.
When he was finally thrown out in 1979, vengeful American agents were instrumental in encouraging neighbouring Iraq to start a war against Iran.
It lasted eight years and almost two million people died.
So warm were US relations with Iraqi dictator Saddam Hussein back then that when an Iraqi air attack on an American warship, the USS Stark, killed 37 American sailors, Washington treated the incident as a spat among friends.
One year later an American warship, USS Vincennes, shot down an Iranian airliner on a scheduled commercial flight while it was over Iranian territorial waters, killing all 290 people on board. Scratch one bogey. The US never made an apology.
Ten years ago US president George W. Bush labelled Iran a member of an 'axis of evil' and promptly invaded two of its neighbours, Iraq and Afghanistan, leading to tens of thousands of deaths and immense misery.
It is fully understandable in these circumstances that Iran should see to its defences in the only way possible against the world's biggest military power.
If American politicians then profess themselves worried that a nuclear-armed Iran may be a threat to world peace, they may wish to remember that the last time Iran attacked a neighbour was about 2,500 years ago.
Three other nuclear-armed neighbours - Israel, Pakistan and India - have all done it in the past few decades. But they're the good guys, don't you know?
All of this goes to say that if Standard Chartered really did US$250 billion of illegal transactions with Iranian financial institutions, then I congratulate it for its courage in standing up to vicious bullying from Washington. Three cheers for StanChart.
This assumes, however, that these transactions were illegal and here things become murky. What precisely were these transactions? By what authority are they deemed illegal? In what way are they deemed illegal?
The fact that none of this has been made clear should not be surprising.
American regulators increasingly rely on invective and unsupported allegations to make their accusations of criminality.
In this case the regulator was the New York State Department of Financial Services and its chosen sound bite was that 'SCB operated as a rogue institution'.
The New York what, you ask? Has New York State nothing better to do? Does this mean that the head of the Department of Financial Services has ambitions to the governorship or the presidency and has decided to follow a path well-trodden?
Yes, that was my immediate conclusion as well and, funny thing, it continues to be the way my thoughts lead me.
This dogcatcher catches dogs only when he sees promotion possibilities and then he doesn't really care whether it's dogs he catches or zebras.
But, dog or zebra, he has truly caught it. You can be sure of this because if the news was on the front page of the South China Morning Post then it has certainly been given the maximum publicity it can ever be given to the voters of New York.
The point is not to obtain a conviction in a court of law. That is much too difficult. The point is to convict in the court of public opinion using, as evidence, an agreement with the victim for payment of a fine.
This is usually extorted on the threat of tying the victim up in court proceedings for years. Not only would this cost many times the fine in legal costs but often personal friends and relatives are also subjected to threat of legal proceedings. It works wonders. The fine is paid. The victim must be guilty. It stands to reason.
HSBC recently folded to the threat by making apologies for unsubstantiated allegations of money laundering.
StanChart, however, shows signs of standing up to this iniquitous treatment and I wish its directors and executives every encouragement.