In a significant development in the financial sector, a City whistleblower has been awarded a substantial sum of £565,000 in compensation following an unfair dismissal case. The case, which concluded earlier this week, involved Bharat Bhagani, a former compliance officer at Goldenway Global Investments, a UK subsidiary of a Hong Kong-registered company.
Bhagani took his former employer to an employment tribunal, claiming he was unfairly dismissed after exposing an alleged Chinese spy and raising concerns about potential regulatory violations. The tribunal ruled in Bhagani's favor, finding his complaint "well-founded" and determining that his dismissal was unfair.
The case highlights the critical role of whistleblowers in maintaining integrity within financial institutions. Compliance officers, like Bhagani, are responsible for ensuring companies adhere to laws, regulations, and internal policies. In 2022, Bhagani alerted the Financial Conduct Authority (FCA), the UK's financial regulatory body, about several concerns, including:
- An alleged Chinese spy within the company
- Suspected money laundering activities
- Fraudulent loan practices
- Attempts to appoint Hong Kong-based residents as UK directors without proper regulatory approval
Bhagani claimed he was instructed to secure a work visa for an employee who was later identified as a potential Chinese agent. After reporting his concerns to authorities, Bhagani alleged he was "interrogated" by UK officials and informed that the individual in question had been deported.
Goldenway Global Investments contested the allegations, claiming Bhagani was dismissed for gross misconduct and failing to follow directors' instructions. However, the tribunal found that the company had breached its contract by failing to conduct a proper investigation or disciplinary procedure before terminating Bhagani's employment.
The case also raised questions about the handling of sensitive information and the responsibilities of financial institutions in preventing potential espionage attempts. While spying falls outside the FCA's remit, the tribunal recognized that Bhagani "genuinely believed" he was required to disclose the alleged espionage attempt to the regulatory body.
"I have asked the regulators to come in ... Please stop all communication with London staff. You will prejudice the regulators investigation ... I have called in the regulators and I am certainly not stepping down. I represent the FCA."
The substantial compensation awarded to Bhagani includes payments for unpaid holiday time and notice period. Additionally, Bhagani claimed he lost a job opportunity due to a negative reference provided by Goldenway Global, which stated he was dismissed for gross misconduct without providing evidence or allowing him to comment.
Goldenway Global Investments, which provided foreign exchange services from its central London office near Liverpool Street Station, was subject to FCA restrictions before ceasing operations in 2022. The company was owned by Goldenway Precious Metals, a Hong Kong-based platform for trading gold and silver.
In response to the tribunal's findings, the Chinese embassy rejected the allegations, stating that the claim of a "Chinese espionage agent" was "completely based on hearsay evidence and also is created out of nothing." They firmly opposed what they described as "malicious slander against China."
This case underscores the importance of proper whistleblowing procedures and the protection of individuals who come forward with concerns about potential wrongdoing within financial institutions. It also highlights the complex interplay between international business, regulatory compliance, and national security concerns in today's globalized financial landscape.