Rakesh Saxena does not want to be here. Not here in his luxury condominium, where he has spent the last three years under house arrest while fighting extradition to Thailand. Not here in Vancouver, where in his view the stock promoters are no better than common criminals. And certainly not here in Canada, a country he considers to be full of insular, ignorant people, many of whom could not find the countries he deals with on a map. The Indian-born financier calls his enforced stay here "a living death." He wishes he had been in England rather than Canada when the Thai police caught up to him in 1996 with questions about missing millions and a tottering bank in Bangkok.
But Saxena is stuck with Canada, and we with him, until he exhausts all avenues of appeal of last fall's B.C. Supreme Court decision that he should be sent back to Thailand to stand trial. Two such efforts are under way: one with the federal justice minister, the other with the B.C. Court of Appeal. These decisions take time. So Saxena could be looking at at least another three years in his well-appointed prison.
While his physical movements are restricted, Saxena is free to roam the world by fax, phone and e-mail, looking for business opportunities. You may have heard of one he found a few years ago in the war-torn West African nation of Sierra Leone. In return for financing a mercenary effort to restore the exiled president to power, Saxena was to collect diamond exploration permits. The mission ended in failure, although not before it made headlines around the world, adding to his notoriety.
To gain access to Rakesh Saxena, two sets of hurdles must be cleared. The first, constituting the conditions of his house arrest, were crafted by his lawyer, S. Russel Chamberlain, and approved by the British Columbia courts. Saxena pays for guards from Intercon Security, whose main job is to keep him in. Visitors must be cleared in advance by the team, who may conduct a body search.
When Saxena's lawyer negotiated this deal in June, 1998, it caused a public outcry. The then-Crown prosecutor in the case, Deborah Strachan, said it set a dangerous precedent for giving the rich special treatment. But Saxena's legal team convinced the court it would be cheaper for Canada to allow their client to bear the cost of his incarceration, estimated at $40,000 to $50,000 per month. The judge agreed. This year, alleged Chinese smuggling kingpin Lai Changxing and his wife cited the Saxena precedent to win their own house arrest while fighting extradition to China. Lai may return the favour. Should Lai succeed in convincing Canadian authorities that he cannot be returned to China because he would face the death penalty, Saxena hopes the decision will ultimately form a precedent of sorts for his case.
The second set of hurdles are imposed by the management at the luxury condo building, which is in earshot of the buskers at the fashionable Granville Island market, and counts other celebrities besides Saxena among its tenants. The charming but firm concierge makes sure that you are expected before the heavy front door swings open. At Saxena's own door, you are greeted by a brawny Intercon security guard. He points the way into the living room. And there in the half-light--the blinds are drawn against the bright day outside--sits the prisoner of False Creek.
Saxena has been accused of many things but has never been convicted of anything-a fact that is often forgotten in the reports of all the lawsuits he is involved in. Keep that in mind as we go through the list.
In India, Saxena has been charged with culpable homicide, extortion, uttering death threats and cheating in the death of biscuit tycoon Rajan Pillai. Those charges were laid after the tycoon's widow accused Saxena and two others-one of them a swami-of conspiring to kill her husband. The case is being investigated.
Moving over to Thailand, Saxena is accused of embezzling $88 million from the Bangkok Bank of Commerce (BBC). This is the charge for which the Kingdom of Thailand is seeking Saxena's extradition from Canada. The bank has separately filed civil proceedings against Saxena. He has filed a counter-suit.
The collapse of the BBC was one of the first dominoes in a financial crisis that spread across Asia, shaking the world economy in 1997. While some blame Saxena for sparking the inferno-The Wall Street Journal described him as the "Mrs. O'Leary's cow of the global financial crisis"-he is not facing court action on that score.
And no charges were laid in the ill-fated Sierra Leone affair. The British Parliament's Report of the Sierra Leone Arms Investigation concluded that the purchase of weapons with Saxena's money only technically broke a United Nations embargo. And in any event, Canada was not yet enforcing the embargo.
The man who emerges from the gloom to greet us looks neither slick nor shifty-nor particularly wealthy. Dressed in a dark blue shirt, which he wears open-necked and loose over his dark trousers, Saxena pads across the carpet in stocking feet. Shoes are unnecessary when you are rarely allowed outdoors. He is short, barely over five feet, and stocky. His complexion is greyish: not enough fresh air, too many Dunhill cigarettes.
He chain-smokes throughout the interview. But he seems cheerful enough under the circumstances, and eager to talk about the situation he finds himself in. "I'm not here on my own free will," he says, drawing an immediate distinction between himself and some other asylum seekers. "I don't want a Canadian passport."
What he wants is for federal Justice Minister Anne McLellan to decide that his life is at risk if he is sent back to Thailand: Too many people there would rather see him dead than on the witness stand. Or so he and his lawyer contend. From their perspective, the bombing of the Thai Prime Minister's airplane in March was a godsend. The blast, which killed a flight attendant and injured seven airport workers, occurred just two days before Saxena asked McLellan to intervene in his case. Saxena says the people reviewing his appeal should realize that Thailand is not at the same level as Canada. "You must know that this is a Third World country." The irony, of course, is that he believes Canada isn't much of a country either-he is quite vocal on this point-but he is counting on its good laws and good government to save him from being sent back to the more exciting climate of Thailand.
James R. Davis, a former Canadian soldier who provided security for Saxena in Vancouver before he was under house arrest, describes his former boss as a "very lonely man" who liked to sit with his guards and watch hockey or tell them stories about his past. "He was also a very generous man," says Davis. "Nearly every night he would buy over a hundred dollars' worth of Indian food and present it to his close-protection security team."
Born in Indore, in central India, in 1952, Saxena was educated there and in Britain, where his mother, an international lawyer, specialized in the law of the sea. He showed an early flair for figures-his mother still thinks he is a genius-but, when he returned to India for university, ended up studying for a master's degree in English literature at elite St. Stephen's College at the University of Delhi. He was an activist in the student movement, frequently organizing demonstrations.
Like many radicals from that time, Saxena later became part of the system he had scorned, working as a currency trader in India, then in Hong Kong and finally in Thailand, where he moved in 1985. His career did not really take off until a 1989 meeting with the managing director of the Bangkok Bank of Commerce, Krirkkiat Jalichandra. The encounter led to Saxena's becoming a consultant for the small but prestigious bank. He gave advice on foreign exchange, derivatives, and mergers and acquisitions.
As the tigers of the Asian economy surged forward, for a few years Saxena appeared to have it all-professional success, material rewards, a wife and three children. He was living the good life, working hard and partying hard. It was not unusual for him to drink six to eight pints of beer a day, followed by a couple of glasses of wine and then half a bottle of Scotch. Business was good. Life was good. (Just how wealthy Saxena became is not known; the value of shares that he has in frozen Swiss bank accounts is about $75 million; he has not blanched at his house-arrest costs, nor his $2.5-million bail.)
The boom, of course, did not last. Saxena's troubles in Thailand are a bit like a single accident in the midst of a giant highway pileup. His critics, given voice in multiple media reports, say he caused the pileup: the collapse of the Thai financial system. Saxena says he wasn't even driving the car. His lawyer, Russ Chamberlain, says Saxena, merely an adviser to the BBC, is being turned into the fall guy for the men who headed the BBC and the supervisory central bank, the Bank of Thailand. "They, the Bank of Thailand, don't want to pay the piper; they want him to pay the piper."
The specific transaction at the heart of the Thai government's case was a loan valued at 1.66 billion baht ($88 million) from the BBC to City Trading, a company with which Saxena had close links. As with so many of the loans offered in this period, it was unclear whether the collateral was sufficient to cover the loan. The Thai government's lawyers have characterized it as part of a web of complicated loan schemes involving offshore companies that drained about $3 billion from the BBC, which collapsed. "It was the starting point of the economic crisis in Thailand," the government prosecutor on the case, Chulasingh Vasantasingh, told The Wall Street Journal. The 1997 devaluation of the Thai currency triggered, in turn, the continental financial crisis.
Saxena hotly denies the domino theory. And there are, after all, many explanations for the Asian meltdown. In Saxena's view, the collapse of the country's sex trade was the real catalyst for the Thai part of the crisis. (The International Monetary Fund spokesman dealing with Thailand is politely dismissive of this original interpretation.)
When Saxena argues he should not be sent back to a country where corruption and bribery are endemic, he knows of what he speaks. During his extradition hearing, he admitted that he arranged for 100 million baht (about $5.5 million) to be paid by the bank to Chart Thai, one of the main political parties, to help it buy votes. It's the men who received that tainted money who might try to kill him, to prevent his testifying in court, he says. (Chart Thai leaders deny that a bribe was made.)
B.C. Supreme Court Justice Frank Maczko did not buy Saxena's arguments and ruled last September that he should be sent back to Thailand for trial. "There is evidence," Judge Maczko wrote at the end of what was possibly the longest extradition case in Canadian history, "on which a trier of fact, properly instructed and acting reasonably, could convict Mr. Saxena of fraud." His decision was greeted joyously by Chalermdej Jombunud, deputy commissioner of the Royal Thai Police. In a letter to the Bangkok Post, he wrote, "This is a victory for Thailand and for all Thais who continue to suffer from the consequences of a shattered economy that many believe Rakesh caused." Any celebrations will have to await the outcome of Saxena's current attempts to have his extradition overturned. And there could be further appeals after those.
On the wall of his living room-cum-office, Saxena has hung two moody black-and-white photographs of Prague, which is where he says he kept a base from 1992 until he came to Canada in 1996 (although other reports have him living in Thailand until 1996). Central and Eastern Europe at that time presented the kind of opportunities that Saxena seeks out. They were countries still in turmoil after the collapse of communism, which meant that assets were priced cheaply. And Saxena says his Indian passport had long opened doors for him that would be closed to businessmen coming from Cold-Warrior Western nations. He says he travelled to Canada just to reactivate some shell companies he had purchased. But he looked into acquiring landed immigrant status under the Immigrant Investor Program, which gives would-be immigrants points if they agree to invest money in Canada. Whatever Saxena's future plans at that point, they were all changed on July 7, 1996, at Whistler, B.C., by the Royal Canadian Mounted Police at the behest of the Royal Thai Police.
The circumstances of the arrest are cloudy. When the Mounties swooped in, Saxena was in the company of several Thai police officers and was carrying a briefcase of cash. Since that day he has been confined to Canada, first on his own recognizance and later, when the Canadian authorities said they feared he would flee the country under a fake Yugoslavian passport, under house arrest. But that has not stopped him from conducting business deals around the world. The best-known of these is, of course, the Arms to Africa Affair. It is still causing the British government headaches because it involved the explosive combination of illicit arms sales, mercenaries and diamond concessions.
Ahmad Tejan Kabbah, president of Sierra Leone, was ousted in a military coup in May, 1997, and forced to flee to neighbouring Guinea. There he set up a government in exile. A former UN diplomat who had been democratically elected, Kabbah had the good wishes of the international community. But as time wore on and the coup leaders were not removed, he grew restive.
It happened that Saxena was casting about for new business opportunities at that moment, as was the third party in the affair, Tim Spicer, a decorated veteran of the UK's Falklands War who headed a private military company based in London, Sandline International. The three found they had a coincidence of interests. Saxena was hoping to get diamond exploration permits, and perhaps a bond and banking arrangement with the government once the war was over. Kabbah wanted to get his country back. And Spicer was looking for business and a way to restore his company's good name after a contract in Papua New Guinea went disastrously wrong.
So they worked out a triangular deal, whose details were reported in the British Parliament's Report of the Sierra Leone Arms Investigation (a.k.a. the Legg Report). First of all, Saxena would raise the money, including some of his own, to have Sandline supply troops and equipment to help reinstate Kabbah. In a fax to Saxena dated July 8, 1997, Kabbah's minister of presidential affairs said the government in exile wanted military experts to work with pro-Kabbah militia inside Sierra Leone. "What is needed is the strategy, logistics and training that would convert the 40,000 militia into an effective fighting force," wrote Momodu Koroma. "Your experts would be needed to assess the immediate needs of the Kamajors [militia] to provide training in the immediate use of weapons and communications equipment and also to assist in the formation of strategy and battle tactics."
Kabbah would give companies in Sierra Leone controlled by Saxena diamond exploration permits, with the promise of more business down the road. Tim Spicer and Sandline were to be paid by Saxena to conduct operations in support of Kabbah. It was all going swimmingly well until someone with access to the documents photocopied them and slipped a brown envelope under The Globe and Mail's door.
Reached in Guinea in the summer of 1997, Kabbah denied knowing about the negotiations. "Anybody exploring that would have problems, because Sierra Leone is a signatory to a UN resolution which forbids the use of hired killers," he said. "And besides, these things are very expensive. We do not have the money at the moment."
But Kabbah had something just as good as cash: the diamond exploration permits. Despite the publicity and other snags, the deal went ahead-until, according to Spicer's testimony to the Legg Inquiry, Saxena did not forward all the promised money. The arms that Sandline purchased-28 tons of AK-47s, and grenade launchers and rifles from Bulgaria-did not reach Sierra Leone until after the capital had been stormed successfully by pro-Kabbah, Nigerian-led troops, a development unexpected by Kabbah himself. And then Saxena did not get his diamond deals. When British peer Lord Avebury, then head of the British Parliament's human rights committee, came across a Globe and Mail article on the whole affair while surfing the net some months later, he raised the alarm in Britain and prompted the government to conduct two parliamentary inquiries-one of which was the Legg Inquiry-into the deal. These investigations confirmed all the details Kabbah had initially denied.
When asked now why he got involved, Saxena first talks vaguely of being asked for help by an old friend, whom he does not identify except to say it was not Kabbah. It wasn't because he had any particular attachment to Sierra Leone. Saxena has never even been to Africa. "My knowledge is from the books," he says. Then he offers a secondary explanation-he became involved for ideological reasons. His instincts from his student days are still with him, he says. "I've funded resistance movements in many countries of the world."
In an interview two years ago, Saxena explained how the Sierra Leone deal also fit with the way he does business in conflict zones. It starts with taking a position when assets are most depressed, either because of civil war or because of social change, such as was the case in Eastern Europe. But there are a number of conditions that still must be met. The title to whatever you are buying must be secure. And the assets must have some fundamental value. You must deal with a government with some element of international sanction, because you don't want your deal revoked once peace comes. There should be an educated workforce in place. And the deal should promise exponential rewards-something like 25 times the original price is about right. Finally, you should have an exit strategy, such as the sale of the asset when the crisis is over.
Sierra Leone fit on just about every count, he said. "We made a deal with the President who wanted a loan in return for x number of concessions....And he was buying arms to get back in." Kabbah eventually got back into power the next year, thanks to the Nigerian-led intervention. Saxena says he hears from Spicer periodically. The ex-soldier has since left Sandline to set up his own firm providing protection to shipping companies against piracy on the high seas. Saxena says he talked to him on Christmas Day.
Saxena no longer unwinds with alcohol as in the old days-it's not allowed under the terms of his house arrest-but he continues to wheel and deal. He speaks cryptically of business being very good lately, including a bond deal for an unnamed African country. But he will not divulge any details. Another insurrection, perhaps? This is a capitalist, after all, who says he has not abandoned his youthful radicalism. Saxena explains the contradiction away smoothly. "I was a Marxist in my student days. I still am at heart. I'm trying to destroy the system from within now." He laughs, but you wonder if he is really joking.
FUGITIVE PIECES: The world of Rakesh Saxena
1 India:
Born here, 1952. Returned for university, became a radical, converted to currency trading 2 London:
Saxena lived here as a child with his mother, an international lawyer 3 Hong Kong:
Worked here as a foreign-currency trader in the 1980s 4 Bangkok:
The high life in the '90s as an adviser to the Bangkok Bank of Commerce 5 Prague:
Saxena says he had a base here after 1992 6 Vancouver:
Since 1996, Saxena has spent most of his time under house arrest in a luxury condo while Thailand tries to extradite him 7 Sierra Leone:
According to the Legg Inquiry, Saxena was to get diamond exploration permits for supporting a countercoup in '97-98