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 2010-11-05 09:38 pm Back to NEWS
UK solicitor loses licence over Chiluba’s corruption
Ex-President Frederick Chiluba

Frederick Chiluba's UK lawyer Bimal Thaker's practising licence has been revoked because of his conduct with the former president, which has been described as 'spectacularly stupid'.

This is according to the Solicitors' Disciplinary Tribunal findings and decision dated July 15, 2010, filed with the Law Society in the UK.

The allegations, which have since been proven, and action taken, were that Thaker abused his integrity through dealings involving the payments of money belonging to the Zambian treasury to Chiluba, his children, former Zambia Security Intelligence Services director general Xavier Chungu's children and Ireen Kabwe, wife of former Access Financial Services Limited's Faustin Kabwe, among other transactions.

Thaker met Chiluba in London and had been asked by him for a cash payment of £30,000.

It was further observed that Thaker's involvement in the payments "had clearly not been in any way connected with any legal work but had been consistent with the provision of banking facilities in transactions that bore the hallmarks of money laundering."

David Barton, who was acting on behalf of the Solicitors Regulation Authority, was the applicant and Bimal Bhupendra Thaker of Cave Malik was the respondent in the matter.

The allegations against the respondent were that he had withdrawn sums from client account in circumstances other than those permitted by Rule 22 of the Solicitors' Accounts Rules 1998 (SAR) and thereby had created a cash shortage.

He was also alleged to have failed to remedy the breaches promptly upon discovery, contrary to Rule 7 of the SAR, and that he had, contrary to the provisions of Rule 1 of the Solicitors' Practice Rules 1990 (SPR), compromised or impaired, or had been likely so to do, either or both of, (i) his independence or integrity and (ii) his good repute or that of the solicitors' profession.

"
The particulars of allegation 3 were that he had:

  • [3.1] permitted money to pass into and out of his client account when there had been no underlying legal transaction or the provision of legal services and where he had been acting merely as a conduit to receive and pass on or return monies to clients or to third parties. In so doing it was alleged that he had been grossly reckless.

  • [3.2] failed to be alert to the very substantial sums of money passing through client account and to the circumstances relating to their receipt and disbursement, which should have put him on inquiry as to their authenticity or legitimacy. In so doing it was alleged that he had been grossly reckless.

  • [3.3] failed to investigate or to adequately consider the possibility that his firm had been utilised to facilitate money-laundering or other illegal activity. In so doing it was alleged that he had been grossly reckless," they stated.

  • [3.4] failed to have any or any proper regard to the warnings issued to the solicitors' profession by the Law Society on money-laundering, in particular the 'Blue Card' warning first issued to the profession in April 1994 and revised in February 1999. Those had been circulated to all solicitors holding practicing certificates in February 1995 and again on 26th/27th July 2000. In so doing it was alleged that he had been grossly reckless.

  • [3.5] on the 13th November 2001, paid to Dr Chiluba, who had not been a client, cash in the sum of £30,000 that he had withdrawn from his client account. That money had represented part of a payment sent to him from the Office of the President of Zambia and had been Zambian money. The respondent had withdrawn it and paid it on the instructions of Faustin Kabwe of Access Financial Services Limited (AFSL/ACCESS). In so doing it was alleged that the respondent had been dishonest but if not dishonest that he had been grossly reckless.

  • [3.6] after about 5th June 2002, when he had known of the 'Matrix of Plunder' allegations in the Zambian press, (he had) disbursed money to Irene Kabwe, to the children of Dr Chiluba and to the children of Xavier Franklin Chungu that had belonged to the Zambian Treasury. In so doing it was alleged that the respondent had been dishonest, but if not dishonest that he had been grossly reckless.

"It was further alleged that contrary to note (ix) to Rule 15 of the SAR, the respondent failed to exercise caution when he had been asked to provide banking facilities through his client account."

But in its findings as to fact and law, the Tribunal stated that the applicant submitted that the respondent had severely damaged the reputation of the solicitors' profession by his involvement in financial transactions that had borne the hallmarks of money-laundering and that the situation had received widespread publicity and widespread condemnation, particularly in Zambia.

The Tribunal stated that in his submissions the applicant said that the respondent had seriously compromised his independence and his integrity when dealing with AFSL and with others.

"
The Tribunal was also satisfied that the respondent had been aware, from at least August 2001, that Dr Chiluba had been implicated in allegations of theft and from at least June 2002, following the 'Matrix of Plunder' article in the Zambian press, that extensive and serious allegations had been made against AFSL and various individuals connected with it. Despite this knowledge, the respondent had continued to disburse monies, as instructed, with no regard whatsoever to the money-laundering warning and requirements," they stated.

"
In these circumstances, the Tribunal found that the respondent had been grossly reckless. In clarification, the Tribunal was not making any findings as to the sources of the money passing through the respondent's client account. It was aware of the tracing evidence in the agreed expert's report. However, the Tribunal found that after June 2002, at the very latest, the respondent could not have been sure that, as a solicitor discharging his responsibilities properly, he knew the source and provenance of the monies coming into his client account. The Tribunal found as a fact that the respondent had been grossly reckless because he had carried on accepting monies and making payments, as instructed by his clients, regardless of the allegations and in continuing contravention of all the safe-guards of the money-laundering requirements.

The Tribunal stated that they did not find the respondent a convincing witness in that many of his answers had been evasive and his evidence often inconsistent.

"
Having considered all the evidence and the submissions of the parties, the Tribunal found the matters in relation to the payment to Dr Chiluba proved to the higher standard. At the very least the Tribunal was satisfied that the respondent had been grossly reckless, but in addition the Tribunal was satisfied that in making a payment of £30,000 in cash to Dr Chiluba, without any regard to the requirements of the Law Society's guidance on the avoidance of money-laundering or without making any enquiries so as to ensure that he had a full understanding of the nature of the payment, such as to satisfy himself that the payment was in fact lawful, the respondent was both dishonest by the standards of reasonable and honest people and further that he himself had realised that by those standards his conduct had been dishonest," they stated.

"
Turning to the payments to Irene Kabwe, the Chiluba children and the Chungu children as identified in the Forensic Investigation Report; payments of credit card bills, travel expenses, payments in connection with educational establishments and motor vehicles, the applicant had submitted that not only had the respondent been, in his own submission, 'spectacularly stupid' in making such payments, but that they had been made when the respondent had been on notice of the allegations in Zambia. Moreover, he had submitted that such payments had clearly not been in any way connected with any legal work but had been consistent with the provision of banking facilities."

The Tribunal stated that having considered all evidence and the submissions of the parties, they found the matters in relation to the payments of money to Irene Kabwe, to the children of Chiluba and to the children of Chungu that had belonged to the Zambian Treasury, proved to the higher standard.

In mitigation, the counsel for the respondent stressed that his client had been a relatively young solicitor with no previous disciplinary issues when the events in question had taken place.

But the Tribunal ruled that it had found all of the allegations proved on the evidence presented to it.

It stressed that allegations 3 and 4 were of an extremely serious nature. The

"
Tribunal was extremely concerned about the damage to the reputation of the profession caused by the actions of the respondent in failing to comply with money-laundering guidance, particularly given the consequences of that failure. The respondent, as a solicitor, had been involved in widespread publicity and condemnation," they stated.

"
He had compromised his independence and integrity. The Tribunal took into account the basic propositions in relation to the conduct of solicitors set out in Bolton vs The Law Society 1194 1WLR 512. Most particularly, the Tribunal noted that maintaining the profession's reputation involved its members being able to be 'trusted to the ends of the earth.' The Tribunal concluded that the respondent had severely damaged the reputation of the profession and his own reputation and in all the circumstances should not be allowed to practice. Accordingly he would be struck off the Roll of Solicitors."

"
The Tribunal ordered that the respondent Bimal Bhupendra Thaker of Suite 11, St Loyes House, 20 St Loyes Street, Bedford, MK40 1ZL, Solicitor, be STRUCK OFF the Roll of Solicitors and they further ordered that he do pay 90 per cent of all costs of and incidental to this application and enquiry including the reserved costs to be subject to a detailed assessment unless agreed between the parties to include the costs of the Investigation Accountant of the Law Society. An interim payment of £20,000 to be made within 28 days of today's date."

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