Fresh questions have been raised about private firms gaining prestige and access to MPs through all-party parliamentary groups (APPGs) after an unregulated “bank” with no UK licence gave evidence to an inquiry in the House of Commons.
The chief executive of Bandenia Challenger Bank spoke at an APPG inquiry into regulation in December, chaired by a Scottish National party MP, which was promoted using parliament’s official portcullis logo.
However, the company had no authorisation to describe itself as a bank or advertise deposit-taking services in the UK. Its website claimed only to have a licence on the autonomous island of Mohéli, part of the Comoros Islands in the Indian Ocean.
Despite its lack of oversight in the UK, Bandenia Challenger Bank gave the impression of a London base, with an address in Hatton Garden. On its website, it appeared to be advertising for business in the UK, including offering customer accounts for private banking. All of this has since been deleted.
Asked about the description of itself as a bank, the Financial Conduct Authority said it was “aware and looking into” the company.
The appearance of Bandenia Challenger Bank in parliament was first identified by the Organized Crime and Corruption Reporting Project (OCCRP), an international group that has previously reported on the company.
Mohammed Imran Qureshi, the chief executive and sole owner of the company, was one of eight “evidence-givers” at an inquiry session in December for the APPG on blockchain – a technology behind cryptocurrency.
The APPG on blockchain is one of hundreds of special interest groups run by MPs and peers on diverse subjects, from China and Russia to digital regulation, longevity and jazz.
The Commons standards committee recently recommended tougher restrictions on the funding and oversight of APPGs, with its chair, Chris Bryant, saying at the time: “The easiest way in the world to peddle influence around parliament – whether appropriate or not – is through APPGs.”
After being asked why Bandenia Challenger Bank had been allowed to give evidence, the SNP MP Martin Docherty-Hughes, who was chair of the APPG on blockchain, said he had already stepped back from his role but was now resigning.
Docherty-Hughes said he chaired the meeting and booked the room but responsibility for inviting speakers lay with the APPG’s secretariat, a thinktank called the Big Innovation Centre.
“Had I been aware of their background, there would have been no question of them attending the event,” Docherty-Hughes said. “Having been chair of the APPG for a number of years, there is an element of trust that is built up with the secretariat in terms of who is invited to speak: trust which in this instance has been clearly breached.”
The APPG on blockchain was previously in the spotlight over its sponsorship from a cryptocurrency firm that subsequently disappeared, leaving thousands of investors without access to their funds. The MPs’ group acknowledged the funding but said it had no further relationship with the firm, adding that the APPG “behaves transparently, ethically, and our evidence and expert speakers add to evidence-based decision-making for policymakers”.
Docherty-Hughes said the APPG system should be reformed. “There is an obvious need to raise issues of ongoing policy relevance to parliament in such a cross-party setting, but the access which such a platform grants those who participate is a privilege, and there should be a greater understanding of this from the individuals and institutions who use the system.”
Prof Birgitte Andersen, CEO of the Big Innovation Centre, said Qureshi was one of eight contributors at the session who had “offered to share his expertise on blockchain technology” but acknowledged it was “regrettable” that he was invited.
She said contributors did not need to have a licence in the UK to speak at an APPG and stressed that Bandenia Challenger Bank had not funded the APPG.
However, Andersen added: “I am very disappointed to learn that Bandenia Challenger Bank’s website and Facebook page have claimed to offer corporate and business banking in the UK.” She said there were no “ties” between Bandenia and the APPG, adding: “He is one of many experts in the field who have been invited to APPGs. The relationship ends there.”
She said the APPG was a vital part of dynamic policymaking and never engaged in inappropriate influencing or lobbying. But she added: “I agree there is a risk that individuals and institutions try to exploit their association with APPGs to burnish their credentials. While Mr Qureshi did nothing in our APPG that directly promoted his own services, and while he did not speak about regulation, it is regrettable that we invited him.”
In response to Docherty-Hughes, she said there was a “balance between picking new and somewhat unproven players to give evidence on what is happening and relevant for policy updates, versus focusing only on today’s industry incumbents”.
“There is a danger of playing too safe, and we cannot afford to lose an understanding of what is happening in a field where there are many new innovations and market players. Of course, we need proper due diligence and KYC [know your customer], and we can in hindsight learn, but let’s not ‘throw the baby out with the bathwater.’”
In an emailed response last month, Bandenia Challenger Bank said it was “not a bank and we are not promoting direct banking services neither [do] we want to be one”.
It added: “Since we have understood we will not be able to offer banking as a service (BaaS) by having bank as a word in our company name, we will change the company name in the near future.” A spokesperson this week said the company would be liquidated.
Bandenia Challenger Bank said it was “not advertising anything in the UK or for UK customers related to the bank” and that it was “offered this company for sale and we liked the name as we are [a] broker and technology solution provider offering services related to the BaaS, which includes trade finance service and mortgage services for customers outside the UK”.
