Sanctions Breach By Bankers

Press, Volume CVIII, Issue 31737, 22 July 1968, Page 11

Sanctions Breach By Bankers

(N Z P A.-Reuter—Copyright) LONDON, July 21. Lloyds and Scottish Finance, one of Britain’s largest industrial banking firms, has pleaded guilty at the Bow Street Magistrate’s Court to a £330,000 breach of the Government’s economic sanctions against Rhodesia.

It is alleged that the company, which is controlled by two British banks, Lloyds and National Commercial of Scotland, broke the regulations imposed after Mr lan Smith’s illegal seizure of power in Rhodesia, by selling its stake in the Scottish Rhodesian Finance Company to the Netherlands Bank of South Africa without Government permission.

The prosecution is against the company, not against individual directors. One summons alleges that the Rhodesian company ceased to be controlled by a resident of the United Kingdom when it was sold to a company registered in South Africa.

The second summons relates to the illegal transfer of securities from Rhodesia to South Africa without Government permission.

For the prosecution, Mr David Hopkins said the penalty could be three times the

money involved, which in this case would amount to over £900.000.

The Magistrate (Mr C. R. C. R. Beddington) said that what he had to consider was whether the transaction had been for commercial profit or for political reasons. Counsel for the company ■ (Mr Michael Kennedy) pleaded that the offence was I“a sin of omission.” The ; company, he said, had been open about the matter, both before and after the date on which the offence was committed.

He submitted that if Lloyds and Scottish had refused the offer of the Netherlands Bank of South Africa, one of two things would have happened: either their investment in sterling in Rhodesia would have been devalued so much as to become worthless, er the money, which was in fact recovered to Britain, would have been lost. Penalty is awaited.