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PALGRAVE STUDIES IN IMPACT FINANCE

Ethical Discourse
in Finance
Interdisciplinary and Diverse Perspectives
Edited by
Marizah Minhat · Nazam Dzolkarnaini
 Palgrave Studies in Impact Finance

Series Editor
Mario La Torre, Department of Management, Sapienza University of
Rome, Rome, Italy
The Palgrave Studies in Impact Finance series provides a valuable scien-
tific ‘hub’ for researchers, professionals and policy makers involved in
Impact finance and related topics. It includes studies in the social, polit-
ical, environmental and ethical impact of finance, exploring all aspects
of impact finance and socially responsible investment, including policy
issues, financial instruments, markets and clients, standards, regulations
and financial management, with a particular focus on impact investments
and microfinance.
Titles feature the most recent empirical analysis with a theoretical
approach, including up to date and innovative studies that cover issues
which impact finance and society globally.

More information about this series at

http://www.palgrave.com/gp/series/14621
Marizah Minhat · Nazam Dzolkarnaini
Editors

Ethical Discourse
in Finance
Interdisciplinary and Diverse Perspectives
Editors
Marizah Minhat Nazam Dzolkarnaini
The Business School The Business School
Edinburgh Napier University Edinburgh Napier University
Edinburgh, UK Edinburgh, UK

ISSN 2662-5105 ISSN 2662-5113 (electronic)

Palgrave Studies in Impact Finance
ISBN 978-3-030-81595-0 ISBN 978-3-030-81596-7 (eBook)
https://doi.org/10.1007/978-3-030-81596-7

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 Foreword

Dear Reader,
I am a Conservative Peer in the House of Lords and my business has
always been in financial services. I have had the pleasure of working with
Marizah Minhat and Nazam Dzolkarnaini for many years and I attended
a conference held by them in Edinburgh which was expertly run and
productive. I am always impressed by their knowledge of Islamic finance
and commitment to its ethical values.
I founded the All-Party Parliamentary Group (APPG) in the British
Parliament on Islamic Finance, which is supported by numerous members
of the House of Commons and House of Lords and it has 100 stake-
holders who are accountants, solicitors, advisors and bankers. I am also
a patron and advisor of the Islamic Finance Council, who also provide
secretariat support to the APPG.
When I worked in the City, I was the chairman and chief executive of a
very successful insurance broking and financial services company. Further-
more, I have been the president of my professional body and I have hosted
and spoken at many meetings on Islamic finance and Takaful insurance
both in the UK and overseas. I have also been an advisor to a Takaful
company.
The UK has the biggest Islamic finance industry outside the Muslim
world and the City is a global leader in Islamic finance.
I believe that there is a huge opportunity to further develop Islamic
finance and that Islamic finance can play an important role in the green

v
vi FOREWORD

industrial revolution. This is an issue I have raised in UK Parliament and I

have written to the Treasury to see how Islamic finance can be promoted.
Indeed, as we recover from the pandemic Islamic finance could be central
to building back better.
I was honoured when Marizah and Nazam approached me to write this
foreword and I am sure you will find this book very timely and insightful.
Ethical finance is varied and appealing to many different groups and
I am glad that this book features such a diverse range of high-calibre
stakeholders, who each make valuable contributions. Not only does this
reflect the importance of ethical finance to many different people, but it
emphasises the importance of having an interdisciplinary approach and I
would like to commend the authors on their collaboration.
The chapters in this book take a deep dive into the different ethical
discourse in finance, and I am sure you will find the different questions
raised thought-provoking and that you will use the different perspectives
and reflections in your own work.
The book covers three very distinct aspects of finance: actors, prod-
ucts and regulations. The first part discusses interesting aspects of what
it means to be ‘professional’ and how there has been a change in profes-
sional standards towards a more prominent sales culture. This has affected
trust between customers and providers which is of course very important
in ethical finance. I do think that having employees with strong character,
honesty and integrity is key here and this could be one of the ways that
trust can be restored.
This is something close to my heart, and I think that proper leadership
is essential to any business. I have always encouraged employees to work
together and made sure there is mutual respect in order that people can
work more effectively. As the book explores, there are different leadership
styles but what works the best is having a combination of styles that posi-
tively bring people together and encourage them to build and use their
ethical values.
I also found part two interesting as it looks at the different values in
ethical finance from different religions and it explores the large diver-
sity of what is available. For instance, Christianity has its own perspec-
tive on interest, including values based on stewardship and responsibility.
Islamic finance does have a great deal of integrity and is something that is
appealing to many people.
 FOREWORD vii

There are now many different types of ethical funds and the book offers
a timely insight into the rise of environmental, social and governance
factors (ESG) in what consumers decide to invest in.
The third part of the book looks at regulations and has an interesting
discussion of the Islamic finance market in the UK. This is something I
have discussed widely as part of the APPG on Islamic finance, and it is
good to see further critical analysis on what can be improved in existing
regulation in order to expand Islamic finance in the UK and make it more
accessible. This is important as over the last 18 months the largest devel-
opments in Islamic finance have been in fintech-based start-ups, so we
need to see what we can do to improve access to finance for entrepreneurs
and SMEs.
As the book finds, bank regulation and ethics complement and rein-
force each other, and we need to think about how we can support and
develop these links. I have no doubt you will enjoy reading the different
perspectives in this book, and I encourage you to think about the authors’
findings and help us develop further the world of ethical finance.

Lord Mohamed Sheikh

House of Lords
Westminster, London, UK
 Preface

Ethical discourse is commonly not a priority in a conventional finance

syllabus. This anomaly persists despite the ever-increasing interest towards
ethical finance in the markets. Moral sentiments often take a back seat
when market sentiments matter most, even in shaping the direction of
ethical finance business.
Learning from recurring financial crises, it is important to cautiously
realise that markets may not be necessarily moving in a morally acceptable
direction. Taking a path less travelled, we took an active role in including
and inspiring ethical discourse in a finance syllabus to help build a better
and brighter future. For example, an ethical theme such as Islamic finance
was included as a topic in several finance modules taught at Edinburgh
Napier University and its partnership institutions in Hong Kong. While
this initiative has reinforced the UK as a global leader in Islamic finance
education outside the Muslim world, learning from a broader perspective
also matters.
Realising the importance of engaging with wider stakeholders, we
prioritised ethical finance and governance themes in our scholarly and
public engagement activities hosted by the International Centre for
Management and Governance Research (ICMGR). Students and early
career researchers were mentored to engage in this direction. Above and
beyond academia, we launched on-campus ethical discourses in finance
and governance, which attracted participation from not just academic
colleagues from other countries but also local faith leaders, professional

ix
x PREFACE

accountants, social entrepreneurs and practitioners more widely. Bridging

the gap between academia and practice was at the heart of this educational
project, and this spirit continues in our present and future endeavours.
The birth of this book is a testament to our thriving collaboration with
internal and external stakeholders from diverse backgrounds throughout
the ICMGR’s years. In a moral sense, as rights holders, we exercise our
freedom of expression here for the public interest. We respect a diversity
of perspectives, which is only possible by being inclusive and appreciative
of opinions of people from different backgrounds without fear or favour.
We would like to thank all the contributors for their open-mindedness
and understanding of the importance of this project. We are grateful for
the generosity of The Lord Sheikh and the All-Party Parliamentary Group
on Islamic Finance (APPGIF) at the House of Lords in welcoming our
endeavours to develop further the world of ethical finance.
We value feedback from anonymous reviewers and the Editor of
Palgrave Studies in Impact Finance, Professor Mario La Torre, who
ensured that our collaborative efforts are valued and making an enriching
contribution to a much-needed ethical discourse in finance for social
impact.
We are indebted to those who kindly assisted in the editing and publi-
cation process. They include Tula Weis (Executive Editor and Head
of Economics and Finance at Palgrave Macmillan), Susan Westendorf,
Geetha Chockalingam (Project Coordinator at Springer Nature), Faith Su
(Assistant Editor at Springer), Karthika Purushothaman (Project Manager
at Scientific Publishing Services) and their teams.
This edited book is the continuity of our endeavours in ethical finance
and governance discourse over many years. We would like to extend our
appreciation to the following individuals and organisations who kindly
provided us opportunities and platforms to disseminate our previous
works: Datuk Noripah Kamso, Professor Humayon Dar (Islamic Finance
Review), Azam Aris (The Edge), Habhajan Singh (The Malaysian Reserve),
Sasikala Thiagaraja (Islamic Finance News ), Helena Vieira (LSE Busi-
ness Review), Consumers Association of Penang (CAP), Ansar Finance
Group, The Institute of Chartered Accountants in England and Wales
(ICAEW) in Scotland, The Confucius Institute for Scotland, Bank Rakyat
Malaysia, Treasury Markets Association, Hong Kong Monetary Authority,
 PREFACE xi

editors and anonymous reviewers of our academic articles in several jour-

nals including Journal of Human Rights, Journal of International Finan-
cial Markets, Institutions and Money, Economics Letters, Journal of Finan-
cial Stability, Applied Economics, Research in International Business and
Finance and Business Ethics: A European Review.
As always, we are grateful to our families, for their patience, support
and encouragement over many years.

Edinburgh, UK Marizah Minhat

Nazam Dzolkarnaini
 Contents

1 Introduction 1
Marizah Minhat
1 International Platform 1
2 Intellectual Activities 2
3 Abstracts of Chapters 10
4 Part 1: Actors 11
5 Part 2: Products 12
6 Part 3: Regulations 14
7 Navigating the Future 16
References 17

Part I Actors
2 Does Professionalism in Financial Services Have
a Future? 21
Charles W. Munn
1 Professionalism—A Definition 21
2 Rulers and Regulators 22
3 Culture and Competition 23
4 Public Concern 25
5 Drivers of Change 26
6 Big Bang 27
7 Money—The Great Motivator 28
8 The Financial Crisis 30

xiii
xiv CONTENTS

9 Restoring Trust 32
References 37
3 Boardroom Morality and the ‘Fit and Proper’ Test:
An Aristotelian Perspective 39
Owen Kelly
1 Introduction 39
2 The Philosophy of the ‘FIT’ 40
3 ‘Reputation’ 46
4 The Indispensability of Character 47
5 Aristotle’s Particularism 48
6 Confronting the Question of Character 48
7 Conclusion 51
References 52
4 Optimising Employee Engagement Through Effective
Ethical Leadership: A Case Study of a Canadian Based
Insurance Company 53
Alethia Amoy O’Hara-Stephenson
1 Introduction 53
2 Literature Review 54
3 Research Methodology 63
4 Data, Findings and Discussion 65
5 Conclusions 69
Appendix A: Impact of Leadership Styles on Engagement 71
Appendix B: Action Plan to Optimise Employee
Engagement 75
References 78

Part II Products
5 A Christian Approach to Interest 83
Jock Stein
1 Introduction 83
2 Seven Snapshots 85
3 Interest and Christian Ethics Today 91
4 The Question of Interest Today 94
5 Conclusions 99
References 100
 CONTENTS xv

6 The Integrity of Islamic Finance 103

Marizah Minhat, Nazam Dzolkarnaini,
and Mazni Abdullah
1 Introduction 103
2 Theory 104
3 Practice 106
4 What Factors Could Plausibly Explain the Gap? 115
5 Conclusion 120
Appendix A: Simplified Sukuk Structure with a Sale
Agreement vs Sale Undertaking 120
References 122
7 Diversity in Ethical Funds 125
Shaikh Masrick Hasan and Marizah Minhat
1 Introduction 125
2 Definition and Terminology 126
3 History and Motivations 127
4 Ethical Investment Mechanisms 128
5 Growth of Ethical Funds 133
6 Development in Academic Literature 139
7 Conclusion 143
References 144
8 Investing Ethical: Harder Than You Think 149
Hans-Peter Burghof and Marcel Gehrung
1 Introduction 149
2 Ethical Investments: Why and How? 151
3 Performance of Ethical and Non-ethical Investments 154
4 Conclusion 162
References 165

Part III Regulations

9 Regulating Islamic Finance in the UK: Issues
and Possible Solutions 171
Marizah Minhat and Nazam Dzolkarnaini
1 Introduction 171
2 The Distinctive Characteristics of Islamic Finance 174
3 The Regulation of Islamic Finance in the UK 180
4 Issues with the Existing Regulatory Framework 185
xvi CONTENTS

5 Proposal to Improve the Current State of Regulation 190

6 Conclusion 193
Appendix A: An Example of Ijara-Based Sukuk Structure 195
References 195
10 The Debt Burden of Social Enterprises: How Choices
Around Legal Form and Purpose Can Impact
the Funding Options for Social Entrepreneurs 201
Sally-Anne Hunter
1 Funding Good 201
2 Money, Money, Money 205
3 What Is Your Purpose? 213
4 The Gender of the Founder 216
5 Covid-19 218
References 220
11 Ethical Issues in Financial Stress Testing 223
Kolja Gauer
1 Introduction 223
2 Fundamentals of Financial Stress Testing 224
3 Ethical Considerations 228
4 Financial Stress Tests and Ethics 232
5 Summary 240
References 241
12 The Ethical Considerations for a New Model
of Intellectual Property Protection Under Sharia Law
Principles in the GCC States 247
Nadia Naim
1 Introduction 247
2 Overview of Sharia Law Principles 249
3 Classifying Intellectual Property Law 255
4 Quranic Reform on Property Law 259
5 Previous Work on Sharia and Intellectual Property Law 264
6 Conclusion 267
References 268

Index 271
 Notes on Contributors

Dr. Mazni Abdullah is an Associate Professor at the University of

Malaya. She received her Ph.D. in Accounting and Finance from the
University of Stirling. Her research areas include taxation, financial
reporting and regulation, Islamic finance, zakat and corporate gover-
nance. She has also authored academic books; Veerinder on Malaysian
Tax Theory and Practice (3rd ed. and 4th ed.) and Financial Accounting
& Reporting 2.
Professor Hans-Peter Burghof is a Professor for Banking and Finance
at the University of Hohenheim. He studied Economics at the University
of Bonn and holds a Ph.D. from the University of Munich. The focus
of his research is on banking and the efficiency and stability of financial
systems.
Dr. Nazam Dzolkarnaini is an Associate Professor in Accounting and
Finance at The Business School, Edinburgh Napier University. He
received his Ph.D. in Finance from the University of Stirling. He is
a Fellow of the Higher Education Academy, a member of Chartered
Accountants Australia and New Zealand (CA ANZ) and a Certified Finan-
cial Planner (CFP). He has published widely in the areas of corporate
finance, microfinance, corporate governance, ethics and Islamic finance.
Kolja Gauer is a Ph.D. researcher at Edinburgh Napier University. He
holds diplomas in international business management from HFU Busi-
ness School and EMLV Business School Paris as well as an LL.M. from

xvii
xviii NOTES ON CONTRIBUTORS

Saarland University. He has published in reputable journals and received

several awards for research excellence and academic achievements.
Marcel Gehrung is a research associate at the Chair of Banking and
Financial Services at the University of Hohenheim where he also studied
Economics and Business Administration. His research focuses on finan-
cial development, the influence of regional banking systems on economic
growth and income inequality, and contractual saving for housing.
Dr. Shaikh Masrick Hasan previously worked at Dhaka Stock Exchange
(DSE) and a private firm for about 4 years. He is an Assistant Professor in
Finance at Jagannath University, Bangladesh. He holds B.B.A., M.B.A.,
and M.Sc. in Finance and Risk. He holds a Postgraduate Certificate
in Business and Management Research, and a Ph.D. in Finance from
Edinburgh Napier University.
Sally-Anne Hunter is a multi-award winning strategic and fundraising
consultant for charities, non-profits, community interest companies and
socially-driven organisations. A lawyer by profession and advisor to
the Chartered Institute of Fundraising, her global experience covers
all fundraising activities and income streams. Her expertise includes
supporting organisations considering income diversification, growth and
scale-up.
Owen Kelly, OBE is a Doctoral Researcher in philosophy at the Univer-
sity of Edinburgh, where he also works at the Business School and in
the interdisciplinary Edinburgh Futures Institute. Before becoming an
academic, he worked in the financial services industry and as a government
official. His research seeks to apply ancient ideas of justice to contem-
porary business ethics. He was awarded an OBE (Officer of the British
Empire) in 2015.
Dr. Marizah Minhat holds an LL.M. in Financial Law and Regulation
from the London School of Economics and Political Science (LSE), an
MSc in Banking and Finance and a Ph.D. from the University of Stirling.
She is a Chartered Accountant and a committee member of the ICAEW
Scotland. She served in various roles within higher education institutions
in the UK. She has published in the areas of finance, governance and
human rights.
Professor Charles W. Munn, OBE, FCBI has worked as a bank clerk,
an academic and as Chief Executive of the Chartered Institute of Bankers
 NOTES ON CONTRIBUTORS xix

in Scotland. He has served on the boards and committees of various

professional bodies and was president of the European Bank Training
Association. He is currently Ethics Committee chairman of the new Inter-
national Association for Sustainable Economy and is the author of six
books on various aspects of financial history.
Dr. Nadia Naim is Associate Head of School, Global Engagement,
Coventry Law School. She is a qualified barrister and fellow of the HEA.
She has published many scholarly articles in the areas of international
intellectual property law, Islamic law and development, comparative law,
and company law, and presented at international conferences.
Alethia Amoy O’Hara-Stephenson, C.I.P., B.A., M.B.A. is the
Founding President of the Dufferin County Canadian Black Association,
teaches in the areas of Employee Engagement, Ethics, Leadership, Diver-
sity, Equity, and Inclusion. She is a contributing author to the ‘I Know
Why’ Book series inspiring readers across 11 countries. She holds an
M.B.A. from Edinburgh Napier University.
Revd Dr. Jock Stein is a retired Church of Scotland minister with
degrees in economics and theology from Cambridge and Edinburgh,
whose recent PhD thesis for Glasgow University was on ‘The Psalms
and Scotland’, accompanying poetry on the Old Testament Psalms. His
published books include Commentary, Swift, From Cosmos to Canaan and
From Ruth to Lamentations.
 List of Figures

Chapter 6
Fig. 1 Suggested accounting treatments for the Sale Agreement 113
Fig. 2 The Bank’s statement of financial position (excerpt) as of 31
December 2018 (£’000) 114
Fig. 3 An excerpt of Islamic investment portfolio as at 31 December
2018 (RM’000) 118

Chapter 7
Fig. 1 Screening strategies and different ethical fund styles 133
Fig. 2 Ethical fund styles in terms of investor, market and company
perceptions 134
Fig. 3 The relationship between screening criteria and the asset
universes of funds 135
Fig. 4 Growth of ethical fund strategies around the world
(2016–2018) 138

Chapter 11
Fig. 1 Milestones in financial stress testing 227

Chapter 12
Fig. 1 The five types of conduct under sharia (ethical and unethical) 254

xxi
 List of Tables

Chapter 1
Table 1 ICMGR’s key intellectual public engagements (2017–2019) 3

Chapter 7
Table 1 Description of screening strategies of ethical fund styles 130
Table 2 Description of ethical fund styles according to the screening
strategies 131
Table 3 Proportion of investment in ethical funds relative to total
managed assets 136
Table 4 Growth of ethical investment assets by region 2014–2018
(Figures in billion of $) 137
Table 5 Investment in different ethical fund styles in the UK
under different screening strategies during the period
of 2011–2017 139

Chapter 11
Table 1 Overview of the three major classes of normative ethical
theories 231
Table 2 Framework of normative principles for the discussion
of financial stress tests 232

xxiii
 CHAPTER 1

Introduction

Marizah Minhat

1 International Platform
Anyone can be inspired by the legacy of the Scottish economist and
moral philosopher, Adam Smith.1 According to Smith, the ‘disposition to
admire, and almost to worship, the rich and the powerful, and to despise,
or, at least, to neglect persons of poor and mean condition’ is ‘the great
and most universal cause of the corruption of our moral sentiments’ (The
Theory of Moral Sentiments, I.iii.3.1, p. 61).
In Edinburgh, the International Centre for Management and
Governance Research (ICMGR) at Edinburgh Napier University had
contributed to reviving a discourse on moral sentiments among diverse
stakeholders. During my leadership as Co-Director, the Centre actively
reached out and engaged with local and international communities

1 Smith’s work, The Theory of Moral Sentiments, is undoubtedly an influential source of

reference.

M. Minhat (B)
The Business School, Edinburgh Napier University, Edinburgh, UK
e-mail: m.minhat@napier.ac.uk

© The Author(s), under exclusive license to Springer Nature 1

Switzerland AG 2021
M. Minhat and N. Dzolkarnaini (eds.), Ethical Discourse
in Finance, Palgrave Studies in Impact Finance,
https://doi.org/10.1007/978-3-030-81596-7_1
2 M. MINHAT

through regular seminars, conferences and forums on ethical finance and

governance themes.2
The activities of ICMGR and/or the articles in this book
feature collaborative initiatives between academics, professionals, social
entrepreneurs, faith leaders and members of the public irrespective of
their backgrounds. When the world stood still due to the COVID-19
outbreak that erupted in 2020, it was a time to reflect; hence, the birth
of this edited volume.
Because it is ethical to respect freedom of expression for the public
interest, it is important that critical ideas and opinions be documented as
a source of discussion and reference for future generations. In the spirit of
inclusivity, we gathered thoughts from diverse fields including accounting,
economics, ethics, finance, governance, law, management, philosophy and
religion, regardless of popularity or who holds them.
Being inclusive is a suitable approach as finance ethics is still being
formed and highly diverse (Boatright, 2008). Therefore, the contents of
this book present multiple perspectives as evidence of diversity in ideas
and opinions, which ICMGR had genuinely promoted and celebrated
throughout its intellectual activities.

2 Intellectual Activities
Above and beyond academia, ICMGR’s intellectual and public engage-
ment activities set an exemplary practice where academics were not
confined within their ‘ivory tower’, as views from non-academic stake-
holders were taken on board open-mindedly towards bridging academic
and practical knowledge around ethical and governance issues in the
financial and business world. As a professional accountant, I believe intel-
lectual activities that further public interest are important for building a
better future.
Our intellectual activities were essentially charitable in nature. Such
activities had flourished in Edinburgh during ICMGR’s years despite
resource limitations but an ambitious mind. It was through my humble
initiative that Edinburgh Napier University featured as a supporting

2 I am grateful for the mentorship and guidance of Professor Maura Sheehan, who
gave me the opportunity to shape ICMGR’s intellectual activities. I am also thankful to
Professor Simon Gao for his advisory role. Also acknowledged here the participation and
contribution of other colleagues at Edinburgh Napier University.
 1 INTRODUCTION 3

Table 1 ICMGR’s key intellectual public engagements (2017–2019)

Date Event

19 May 2017 Perspectives on Ethical Finance and Investment

2–3 May 2018 Ethical Finance and Governance in Emerging Markets (featuring
Belt and Road Initiative) (EFGEM18)
8 September 2018 Ethical Finance and Community Development Forum
(EFCDF18)
10–11 April 2019 Management, Governance and Ethical Finance Conference 2019
(MGEF19)
• Incorporating a special plenary session on BRT Public
Engagement Forum: Social Enterprise Financing

partner of the Global Ethical Finance Forum (GEFF) 2017, which was
held under the patronage of the Scottish Government and hosted by the
Royal Bank of Scotland (RBS). The event was held at the RBS Conference
Centre in Edinburgh on 13–14 September 2017, where, upon invitation
from the conference organiser, our doctoral student delegates provided
generous assistance throughout the event.3
Taking an academic lead on ethical finance and governance projects,
ICMGR organised and hosted two forums and three international confer-
ences during 2017–2019 period at Edinburgh Napier University, in
collaboration with internal and several external stakeholders. In addi-
tion to regular research seminars during autumn and spring trimesters,4
ICMGR’s notable public engagement events are listed in Table 1.
This introduction chapter acknowledges the contributors and their
contributions to the ICMGR’s intellectual activities. Participating stake-
holders included delegates from the Institute of Chartered Accountants in
England and Wales (ICAEW), the Research Centre for Sustainable Hong
Kong (CSHK), Shandong University of Finance and Economics, Univer-
sität Hohenheim, Al-Maktoum College Dundee, University of Bolton,
Regents’ University of London and China-Britain Business Council
(CBBC).

3 I attribute this partnership to Aanchal Dhawan, who was a Marketing Manager at

Middle East Global Advisors. My thanks to Shiming Guo, Simon Xu and Tom Zhang for
their voluntary participation.
4 This included ICMGR’s seminars on econometrics that I launched with the assistance
from Dr. Carles Ibanez.
4 M. MINHAT

As a member of ICAEW, the collaborative initiatives with the ICAEW

in Scotland evidence my commitment to engage with professionals.5 I
believe accountants, as high-calibre professionals, are capable of taking an
active role in ethical discourse. I have also highlighted the importance of
research skills in education and profession.

2.1 Perspectives on Ethical Finance and Investment 2017

ICMGR launched its inaugural public engagement event titled ‘Perspec-
tives on Ethical Finance and Investment’ on 19 May 2017.6 The aim was
to bring together diverse perspectives on ethical finance and investment
to enrich the discourse on this subject. The main question posed was
how we would drive ethical finance and investment to address the grave
concern about worsening corruption and the widening gap between rich
and poor.
The intellectual discourse was officiated by Professor Ibrahim Warde
(Tuft University, United States), who introduced some thought-
provoking lines such as ‘rationalizing and glorifying financialization’,
‘when financial crime pays’ and ‘greed is good’. These are some of the
challenges that have beleaguered the pursuit of ethical finance and invest-
ment. In the presence of a flawed incentive system or in the absence of
appropriate incentives, the discourse on ethics may be regarded as merely
‘lipstick on a pig’ if nurturing ethical conduct requires the right incentives.
This implies that appropriate incentives might be required to tackle unac-
ceptable conduct, such as corruption that has widened the gap between
rich and poor.
From a religious perspective, Dr. Nazam Dzolkarnaini, who previ-
ously led the Islamic Banking and Finance Programme at the University
of Salford, shared some critical observations on the practice of Islamic
finance. Empirical evidence was presented relating to the gap between the
Islamic profit/loss/risk sharing concept and Islamic finance as practised.
Evidence suggested that there has been a significant reliance on what was
viewed as rent-seeking instruments, such as questionable exploitation of

5 Among others, I acknowledge here the contributions of David Bond, John Danzig
and Keith Proudfoot, as well as administrative supports from Fiona Ormiston, Alison Tait,
Jane Walker and Sally Gallery.
6 Details of contributors are published at: https://www.napier.ac.uk/about-us/events/
ethical-finance-and-investment-2017 (Accessed 29 May 2021).
 1 INTRODUCTION 5

murabahah. This pertinent issue is elaborated further in Chapter 6 of this

book. A concern was also raised about the tendency of Islamic financing
for risky firms.7 It is still a subject of further research whether such risky
firms are really firms in need and hence deserve to be assisted financially
to support economic development and fair distribution of wealth.
Another religious perspective was then offered by Revd Dr. Jock Stein,
who continued the discourse from a Christian perspective. His talk began
by outlining the nature/characteristics of the concept and nature of God,
characterised by forgiveness and generosity. He then elaborated on a
Christian’s perspective on credit (or debt) and interest. He acknowledged
that there was a point in history where interest was viewed as contrary to
natural justice. Time was viewed as a common gift; hence, one couldn’t
charge for it. There was a reflection on the failures of global capitalism
that are manifested through boom and bust cycles, the growing gap
between rich and poor, and other disruptive outcomes. He also high-
lighted the growth of alternative/ethical finance, including Christian Aid
and Community Bank, which provides credit for the poor. Chapter 5
of this book presents his further discourse on a Christian approach to
interest.
Richard Taylor from Positive Money Edinburgh presented another
alternative perspective on ethical finance. His talk sparked a renewed
discourse on the nature of banks and their role in creating money in
the form of credit. He suggested that the price of an asset may go up
in response to an increase in the amount of money created from, for
example, an approved mortgage. As the competition for buying and credit
increase, those with the highest incomes and assets are able to leverage the
most and take advantage of the inflated system. This exacerbates wealth
inequality, as the cost of debt increases and those unable to buy must pay
a higher percentage of their income to private landlords who are able
to purchase. To tackle the wealth inequality problem, Positive Money
advocates an alternative monetary system.
The event ended with a talk from David Stevens from the ICAEW.
He talked about the role of accountants working in public practice as
gatekeepers. He shared an interesting study that found countries with a
higher proportion of accountants in the workforce tend to be associated
with lower levels of corruption. He suggested that to uphold the highest

7 For preliminary findings, see Minhat & Dzolkarnaini (2017).

6 M. MINHAT

standards required to tackle corruption, all accountants should be subject

to the same ‘robust ethical, educational, and oversight requirements’.
Overall, the event gathered enriching perspectives on ethical finance
and investment. It presented an inclusive initiative to blend academic,
professional and religious knowledge to help formulate a commonly
acceptable approach for ethical finance and investment in tackling corrup-
tion and narrowing the gap between rich and poor. Learning from this
project:

One begins to wonder whether the material advantages of keeping business

and religion in different compartments are sufficient to balance the moral
disadvantages. (Keynes, 1931, p. 307)

2.2 Ethical Finance and Governance in Emerging Markets (ft. Belt

and Road Initiative) 2018
This conference, which was held in May 2018 and organised in collabo-
ration with the ICAEW in Scotland, attracted participants from different
countries and origins, including delegates from China and Hong Kong.
China’s Belt and Road Initiative (BRI) was selected as the theme of
the conference due to the emerging financing and governance issues
associated with BRI-linked projects.8
The conference began with an introduction to BRI-linked business
opportunities by James Brodie, Director, Scotland and China Business
Adviser, China-Britain Business Council (CBBC). James highlighted that
BRI involves six corridors in over 60 countries, covering 66% of the
world population and 33% of the world’s GDP. He outlined business
opportunities that are linked to BRI in various sectors, such as financial
services, energy and infrastructure, insurance and advisory, maritime and
legal services and education.
Although BRI has the potential to become a provider of business
opportunities and public goods on a global scale, the implementation
of BRI-linked projects has to be governed properly. Therefore, a crit-
ical discussion on the notion of public interest followed. David Stevens,

8 My reflection about this conference was initially published by ICAEW (2018). Inter-
estingly, about a year later, ICAEW hosted a BRI Economic Forum in Beijing (Aplin,
2019). During 2017–2019, I also delivered talks at BRI conferences hosted by the
Confucius Institute for Scotland.
 1 INTRODUCTION 7

in his capacity as the ICAEW’s Integrity and Law Manager, shared his
knowledge on professional ethics and the public interest. He highlighted
the challenges inherent in asserting the public interest, a framework for
analysis and ethics guidance in this area. The challenge was for the imple-
menters of BRI-linked projects to weigh public interest in their financing
and investment decisions.
In exploring an alternative ethical perspective, Owen Kelly OBE from
the University of Edinburgh shared some thoughts from his doctoral
research on Aristotelian ethics as a way of spanning cultures along the
BRI corridors. It was postulated that BRI will embrace as many ethical
traditions as societies it touches and, therefore, disagreement on moral
questions is unavoidable. He viewed that Aristotelian ethics provide a
‘lingua franca’ that could support BRI’s decision-making because they
do not rest on religious beliefs and do not prescribe rules.
Given the emergence of anecdotes displaying public disquiet about the
implications of BRI-linked projects in some host countries, the discourse
on public interest and ethics never seems less important. Reliance on
borrowing to finance BRI-linked projects was an issue raised during
the conference through a talk delivered by Dr. Nazam Dzolkarnaini.
A concern was raised that BRI might fuel unsustainable debt burdens
among host countries. It was conjectured that genuine partnership or
joint ownership of BRI-linked projects is a sensible way forward if BRI is
about different countries or nations working together to develop projects
for commercial and social purposes. This notion is consistent with risk-
sharing financing as promoted through an Islamic finance lens. Islamic
finance is highly relevant because BRI involves the participation of many
countries with large Muslim populations. As evidence of impact, this view
was later picked up and reported in Asia (Singh, 2018).
Having taught Islamic finance in Hong Kong for about a decade, I had
also embarked on a collaborative research initiative there.9 As a result,
at the conference, the discourse on Islamic finance and governance of
BRI continued with research presentations by the partner delegates from
Hong Kong. This initiative was motivated by the need to enrich stake-
holders’ knowledge towards strengthening Hong Kong’s position as a

9 I attribute this collaboration to Dr. Stephen Chun Yue Li at City University of Hong
Kong. Also acknowledged are: Professor Linda Che Lan Li, Director, Research Centre
for Sustainable Hong Kong (CSHK); Dr. Michael Chak Sham Wong, Co-Leader, CSHK
International Hub for the Belt and Road; Julian Giew Leong Liew; and Jeffrey Chung.
8 M. MINHAT

gateway to BRI-linked investment and financing opportunities. Although

Islamic finance is often described as embracing ethical finance at large,
there are practical issues and challenges that stakeholders should be aware
of to ensure that the public interest is protected. This issue is examined
in Chapter 6 of this book.

2.3 Ethical Finance and Community Development Forum 2018

The forum was chaired by the ICMGR’s Ethical Finance Research Lead,
Dr. Nazam Dzolkarnaini. It was inspired from a discussion with The Lord
Sheikh, Co-Chair of the UK’s All-Party Parliamentary Group on Islamic
Finance (APPGIF), following a stakeholder meeting of the APPGIF in
May 2018 at the House of Lords. The forum’s aim was to bridge the
knowledge gap between community leaders and practitioners of ethical
finance (including Islamic finance) industry. Addressing the gap is impor-
tant to ensure that the industry prospers to serve the real needs of
community.
In his keynote speech, The Lord Sheikh acknowledged the efforts
of the Scottish Government in promoting an ethical finance sector and
highlighted the UK’s strength in Islamic finance. He also highlighted
opportunities for UK-based academics to export ethical finance education
abroad.
The forum included four presentations bringing different interesting
perspectives on ethical finance.10 Revd Iain May, the founder of Castle
Community Bank, shared his experience in banking and credit unions
and the formation of a community bank in Leith, Edinburgh. Brother
Muhammad bin Arshad, an Imam at the Iqra Academy Edinburgh,
addressed the important role of social finance, which has been at the
heart of Muslim community development. Zahir Haider, an alumnus
of Edinburgh Napier University and a businessman at Computer Divi-
sion Stirling, presented his sterling work in helping local businesses and
community through his role as a director at Stirling Council for volunteer
services.
Sally-Anne Hunter, a multi-award-winning fundraising and strategy
professional and social entrepreneur, shared her wealth of experience in
social enterprise and funding challenges. She worked with Bright Red

10 The forum news was published by APPGIF (2018).

 1 INTRODUCTION 9

Triangle (BRT), a one-stop shop for extra-curricular innovation and

enterprise activities at Edinburgh Napier University. We have since collab-
orated on a research project on Social Enterprise Financing. Her thoughts
are shared in Chapter 10 of this book to inspire further work in this area.

2.4 Management, Governance and Ethical Finance Conference 2019

In another collaboration with ICAEW in Scotland, ICMGR continued its
public engagement initiatives with participants from as far as Canada and
Hong Kong. The world’s reliance on debt financing was a key theme
of this conference.11 Ross Campbell, Managing Director of Belvedere
Campbell and former ICAEW Public Sector Director, guided conference
delegates through key issues and shared copies of the ICAEW publica-
tion ‘The Debt of Nations: A Policy Insight’, which he co-authored. It
is sobering to consider that global public debt more than tripled from
£9.7tn to £29.7tn during the 2001–2018 period.
The critical discourse on debt was extended to the plenary forum on
‘Social Enterprise Financing’. It featured panels from nine organisations
related to social enterprises, namely Ansar Finance Group, Social Invest-
ment Scotland, Big Issue Invest, Grassmarket Community Project, Assist
Social Capital, Social Enterprise Scotland, Invisible Cities, The Growth
Partnership, and Castle Community Bank. The panel discussions revolved
around the reliance of social enterprises (including charitable organisa-
tions) on debt financing or borrowing. It was chaired by Dr. Wendy Wu
of BRT. While some felt that debt is not necessarily bad, Ansar Finance
took an alternative perspective by promoting interest-free debt financing
during the discussion.12
Reflecting the diversity of finance and governance, the conference
featured speakers from different faiths and philosophical backgrounds.
As the Minister of South Leith Parish Church, Revd Iain May offered
a Christian perspective, and talked about the formation and running
of Castle Community Bank in Edinburgh. Church of Scotland elder
and Fellow of the Chartered Institute of Bankers in Scotland, Professor

11 My reflection about this conference was initially published by ICAEW (2019).

12 Based on previous discussions with several trustees and management team (Ali Akbar
Mohammed OBE, Anjum Zulfiqar, Mohammad Rafiq, Ma’Asoom Mahmood, Usman
Malik and Umm Isa), Dr. Nazam Dzolkarnaini and I commend Ansar Finance’s bold
commitment in helping community with interest-free financing.
Another random document with
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have practised upon me, upon all your friends, a gross and impudent
fraud in passing off this young profligate as your nephew.”
She made a last attempt to defend her crumbling position. “Who
dares to say that?” But her ashen lips, her trembling voice proved
her guilt.
“You deceived me when I married you with a fictitious account of
your family—the only truth in your many statements being that your
father was a clever artist of dissolute habits. I know now that you
were an only child and that your mother died when she gave you
birth; it is therefore impossible you can have a nephew. The same
applies to your confederate. He had no sisters, and his two brothers
died bachelors. I would demand from you the motives of this fraud,
but I know you will refuse to confess them. Well, I can wait. The
people who have unmasked you so far will unmask you still farther,
and in time I shall know all in spite of your obstinate silence.”
She said nothing for a long time. When she spoke it was in a voice
of resigned despair. “What do you intend to do?”
In a cold, hard voice he delivered his inflexible sentence.
“From this day, from this hour, we are absolute strangers, and this
roof can no longer shelter us both. I am not going to turn you out
penniless—for your own small income is insufficient even for
necessities—I will pay the penalty of my folly in having married you.
Through my solicitors I will pay you an income sufficient to maintain
you in decent comfort, but not enough for extravagance or for the
maintenance of unscrupulous pensioners.”
She rose from her chair, half-tearful, half-defiant, but she did not
attempt to dispute the justice of the sentence pronounced upon her.
“When do you wish me to go?”
He handed her two envelopes, one containing the unsigned letter
which he had opened, the other a bundle of notes.
“As soon as possible. Eat your last meal in this house if you wish.
Here is something for immediate necessities; my solicitors will see to
the rest. Take what you want for to-day and to-night; the rest of your
property I will send later on to any address you give me.”
 “And what is to be said to the world?” she interrupted in a broken
voice.
“Ah, I had forgotten that, but it is already cut and dried in my mind.
We will both tell the same tale; it will make curiosity silent if it does
not altogether satisfy it. For years we have led an unhappy life
through incompatibility of ideas and temperament; it has at last
culminated in this. There is one other thing before we part for ever.
That other letter which you will read is one addressed to you which I
opened. It is from the friend of your youth, Alma Buckley, who
brought up this impostor, and confirms the knowledge which I had
already gained from another source.”
At those terrible words she seemed on the point of collapsing, but
recovered herself with a strong effort. “I will go as soon as possible.
You must hate the sight of me, I am sure of that.”
He did not contradict her statement. He was as pitiless as he had
once been considerate and generous.
“When I believed that Richard Croxton had proved ungrateful and
betrayed the trust I reposed in him, I told you what I then said to him.
I repeat those words to you. I shall return here in about a couple of
hours. When I re-enter this house, let me find it empty of your
presence.”
He turned on his heel, unlocked the door and passed out, leaving
the wretched woman alone to confront the ruin of her life, to face the
punishment of her treachery.
 CHAPTER XXIII
RICHARD IS CLEARED

W HEN Morrice returned to Deanery Street about four o’clock he

went straight up to Rosabelle’s room. The girl was seated in a
chair, trying to read; he noticed that she looked very sorrowful and
that she had been crying. She had a most sympathetic nature, and
although she could find no excuse for Mrs. Morrice, she could not
but feel a certain compassion for the wretched woman who in the
course of a few hours had lost home and husband, all that seemed
to make life worth living.
“Has she gone?” asked the financier in a hard voice.
“Yes, she came down to lunch a few minutes after you went out.
She spoke hardly a word while the servants were present, but when
we had finished she asked me to come up to her boudoir, and in a
broken voice and with many tears she told me what had happened,
that you had ordered her to be out of the house before you came
back to it.”
“Did she tell you the reasons that impelled me to that apparently
harsh step?”
Rosabelle nodded. “Yes, she told me that she was very fond of
Archie Brookes and that he traded upon her affection for him; that it
was owing to his influence she was forced to lead this double life, to
sell her valuables and replace them by spurious substitutes; that she
was weary and tired of the deception, and was almost glad that it
had come to an end; that she would not be sorry to go away and
hide her head from everybody.”
“Did she tell you that this so-called Archie Brookes was an
impostor, that he is nephew to neither her nor her confederate in the
fraud, that infamous scoundrel, George Clayton-Brookes?”
 Yes, Mrs. Morrice had told her that, but had said very little on the
subject, only narrating the bare fact that the secret had been
discovered.
“Did you urge her to tell you who the man really was?”
“In a rather feeble way, yes,” was the girl’s answer, “for in her
heart-broken state it occurred to me that she might be more ready to
confess her secrets to one of her own sex than to a man. But she
evaded what little attempts I made in that direction. And to tell you
the truth, dear uncle, she was so overwrought and seemed so near
the verge of an utter collapse that I had not the heart to persevere.”
The face which had maintained its hard expression for so long
softened as he looked at the pretty girl, whose compassionate soul
shone through her beautiful eyes, now dimmed with tears. He laid
his hand very kindly on her shoulder.
“Ah, my little Rosabelle, your heart will ever guide that pretty little
head of yours. Well, I would rather it were so. Men have to be hard,
but we don’t want our women to lose their softness. And tell me, you
do not, you cannot blame me for what I have done? You do not think
I could have endured her presence in the house after I had
discovered her two acts of treachery, the motives of one of which
have yet to be found?”
The girl kissed him tenderly. Upright and honourable herself, she
could not but sympathize with him in his drastic action, even while
she was not without compassion for the wretched victim of his
righteous justice. And as she bestowed on him that affectionate
caress, she could not but think miserably of the havoc that had been
wrought in that small household in such a brief space of time.
Her memory went painfully back to that night in December when
they had sat in a secluded corner of one of the pretty rooms, and she
had urged her lover to screw up his courage to approach Morrice on
the subject of their marriage. They had then been a happy family of
four, always together, taking their pleasures, their amusements in
common. And now that joyous little band had been reduced to two.
Mrs. Morrice, the aunt for whom she had always entertained a
sincere affection, was exiled, justly exiled, from the home that had
sheltered her for so many years. And Richard, the lover in whose
innocence she so firmly believed, was another exile, lying under the
ban of his benefactor’s displeasure, and eating his heart out in that
little cottage at Petersham.
“You do not blame me for what I have done, my little Rosabelle,”
repeated her uncle, as he held her slender form against his. “We
have both had a great sorrow in our lives, my poor child, we must be
all in all to each other now.”
“Oh, no, dearest uncle, I do not blame you. In her case, you had
proved everything up to the hilt. I do not see that you could have
taken any other course. If there had been the slightest room for
doubt I should have taken her part against you, I should have held
that you were bound to believe her innocent until you proved her
guilty.”
He winced a little at those words, for he knew what was at the
back of her mind. He had tried and condemned Richard Croxton, the
son of his old sweetheart, on suspicion only—strong suspicion, it is
true, but not strong enough to justify absolute conviction.
They were interrupted by the entrance of the butler, a staid person
who had been in the financier’s service for over twenty years.
“A Mr. Lane rang up for you about half an hour ago, sir, and
wished you particularly to ring him up as soon as convenient to
yourself.”
He went down to his room and was soon in communication with
the office in Shaftesbury Avenue. Lane’s measured tones came over
the instrument.
“Good-day, Mr. Morrice. Am I right in concluding that a certain
person has left your house by now?”
“Quite right; has been gone since shortly after lunch,” was the
financier’s reply.
“Has not yet taken away any private property—trunks, boxes or
that sort of thing, I suppose?” was the next question.
 “No; these are to be sent when we receive an address.”
“Good! Then I may run round to you at once? There is a little
business I want to embark on without delay.”
Morrice readily gave his consent; he had a shrewd inkling of the
nature of that business, and thought what a smart fellow Lane was.
He never let the grass grow under his feet. A few moments after he
had hung up the receiver a taxi deposited the detective in Deanery
Street.
Uncle and niece were sitting together when he entered; they had
been talking on the old subject. Lane came to the point at once.
“Mrs. Morrice has left, you say, sir. Has she taken her maid with
her?”
He was informed that she had. They did not know where she had
gone to. Rosabelle had said good-bye to her aunt in her own room,
had not accompanied her down the staircase into the hall. They had
left very quietly, letting themselves out. Presumably they had hailed
a passing taxi in the street.
“Do you know what they carried with them?” asked Lane sharply.
“Yes,” answered Rosabelle. “I went to the top of the stairs with
them. Mrs. Morrice would not let me come farther. I think she wanted
to slip away as quietly as possible, not to be seen by any of the
servants. She had a small attaché-case; her maid carried a similar
one.”
“Of course, you don’t know what was in those cases?”
Rosabelle’s answer seemed to please him. “I was in my aunt’s
room while she packed hers. I don’t know what was in the one the
maid carried. Mrs. Morrice just put in a few things for the night,
saying that she would send instructions for the dispatch of the rest of
her private property in a day or two.”
“Thank you, Miss Sheldon.” The detective turned briskly towards
her uncle. “Well, Mr. Morrice, we have proceeded so far in our
investigations into this very painful drama. I want now, with your
permission, to proceed a step farther.”
 Morrice looked at him gravely, and Rosabelle too. In the minds of
both had flashed a swift idea of what he had come for.
He produced from his pocket a small bunch of skeleton keys, and
held them in his hand.
“These will open everything in this house that has an ordinary lock,
Mr. Morrice. Before this lady’s property is sent to her—and I think
she will want it very soon—I wish to examine every box and trunk
belonging to her. I cannot, of course, do this without your permission,
and I would not ask it if I did not consider myself justified.”
For a few seconds Morrice hesitated. Espionage, even practised in
a rightful cause, was abhorrent to him, and, base as she was, the
idea of ransacking this woman’s property the moment her back was
turned repelled him.
Lane observed his hesitation and struck in swiftly. “We have
discovered so much, Mr. Morrice, that we may as well investigate a
little farther. It is in the interests of everybody for whom I act”—he
laid a strong emphasis on the everybody—“that we should leave no
quarter unexplored.”
Those significant words decided the hesitating man. “Do as you
wish, Mr. Lane. I am sure you would take no action that did not justify
itself to your own conscience.”
Lane bowed in acknowledgment of the compliment. “I would be
glad if Miss Sheldon would accompany me in my search. I am not
known to all your servants, and if one of them happened to intrude
and find me alone, it might be awkward and entail troublesome
explanations.”
Together the detective and Rosabelle left the room, leaving
Morrice to his bitter and humiliating thoughts. To think that his house
should be the hunting-ground of a private inquiry agent, even such a
courteous and urbane member of his calling as Lane.
A long time passed, half an hour, three-quarters, and still they did
not return. The search was evidently a very thorough one. Then the
door opened, and they came in, the girl’s face flushed with
excitement, and on the detective’s usually impassive countenance
an expression of triumph. Once again he had had one of his flashes
of inspiration.
In his hand he held some sheets of paper which he handed to the
master of the house.
“Here is the memorandum which you lost of the mechanism of the
safe, I think you said about a couple of years ago, Mr. Morrice,” he
said. “I dare say you remember you made rather light of it at the
time; you told me that you had mislaid it, and you thought it might
turn up any day. In the case of its not doing so, you suggested that,
in all probability, it had been thrown away by some careless servant
along with other rubbish and had passed into the hands of the
dustman.”
Yes, Morrice remembered that conversation well. It was one in
which he had obstinately maintained his belief in Richard Croxton’s
guilt, and had shown some annoyance at Lane’s rather neutral and
judicial attitude in the matter.
“To me the loss of that memorandum assumed considerable
significance,” the detective went on in grave, convincing tones, “and I
was by no means ready to subscribe to your theory of the dustman.
Personally, I was convinced that this paper was still in existence, and
of considerable use to some person unknown. I have had a long
search, as you can tell by the time we have been absent. I found it in
the most securely-locked box amongst Mrs. Morrice’s collection; it
took me a considerable time to open it.”
A duller man than Morrice could have experienced no difficulty in
realizing the situation, suddenly as it was presented to him.
“Then this woman, not contented with realizing everything of her
own she could put her hands upon, has gone farther afield. She is
the actual——” He paused, and a low groan escaped him; he could
not bring his lips to utter the hateful word.
“I am afraid there is no longer any possible doubt,” was Lane’s
uncompromising answer. “For some time, I may tell you, my
suspicions have been tending in that direction—from the day, in fact,
that I knew she was abetting this young impostor in his career of
unbridled extravagance. We have yet got to find the real reasons of
his sinister influence over her; they were more than those of ordinary
womanly weakness.”
Morrice hardly heard those last few words. He was humbled
beyond expression by the knowledge that, in his arrogant belief in
his own infallibility, he had committed a grave injustice towards an
innocent man.
“And I branded Richard Croxton, who was the son of the woman
dearer to me than anything on earth, a thief,” he cried in a voice of
anguish.
“It is always a mistake to form hasty judgments, Mr. Morrice,” said
Lane soothingly. “But I admit your error was a quite natural one; it
would have been committed by nine persons out of ten on such
strong circumstantial evidence. I will confess that, at the beginning, I
kept quite an open mind on the subject, if Miss Sheldon will forgive
me for saying so.”
The girl flashed an indignant glance at him. “Would he have been
such a fool as to consent to my calling in your services, Mr. Lane, if
he had not been sure of his innocence?”
Lane, unmoved by her angry outburst, bestowed an indulgent
smile upon her. “Ah, my dear young lady, your heart spoke there
rather than your head. But I will not enter into any lengthy defence of
myself, and explain to you why I sometimes am compelled to
suspect my own clients. Well, happily there is no longer any question
of Mr. Croxton’s vindication. The fact that this memorandum was
found securely locked in the least accessible of Mrs. Morrice’s
boxes, conveys enough to the mind of any reasonable man.”
Morrice rose up, his face working with the intensity of his emotion.
“She must be made to confess, in justice to the innocent. I will go to
her at once and wring the truth out of her.”
“But you do not know where she is,” cried Rosabelle swiftly.
The tortured man made a gesture of despair. He was longing to
confront again this woman who was callous enough to let another
suffer for her own black deeds. “True, I must wait till we hear from
her. Great heavens, how can I have the patience to wait?”
The grave, resolute man, who never lost his head under the most
perturbing circumstances, interposed:
“Pardon me, Mr. Morrice, but if you are agreeable, I should be
pleased to act for you in this matter. I have had unfortunately such a
long experience in this kind of case that I am rather successful at
bringing an obstinate person to confession. I assume that you are
making some provision for Mrs. Morrice’s future?”
“Yes, through my solicitors.”
“But, of course, nothing as yet has been absolutely fixed in that
direction.”
Morrice nodded assent. “That gives me a very powerful weapon,
then,” said Lane. “Are you disposed to entrust the matter to me? It is
not as if I were unacquainted with these painful details.”
Yes, the financier thought he was. He was beginning to have a
little less confidence in himself, and to think that the acute and
diplomatic Lane might achieve better and speedier results.
“Yes, take it in hand, please. But you have got to find her first.”
Lane smiled. “I don’t think I shall find much difficulty in that. In fact
I fancy I could put my hands on her now.”
“She would naturally go to some small hotel, till she had arranged
her future plans, not, of course, to any big one where she would be
likely to come across people she knew,” suggested Rosabelle.
“I think not, Miss Sheldon,” answered the wise Lane. “In this
crushing hour of her misfortunes, instinct will lead her to the friend of
her youth, whose connection with her up to now has, without doubt,
been a very close one. For a time, till she has got used to the
situation, she will avoid even the smallest publicity.”
“You mean the woman, Alma Buckley,” cried Morrice, appreciating
this capable man’s acumen.
 Lane nodded. “It is much more than an even chance. Well, I will
set about it early to-morrow morning. I will give her to-day to recover
from the first effects of the shock. Now, Mr. Morrice, I have never
seen the lady. I should be glad if you would show me her
photographs and entrust me for a brief space with the memorandum.
I expect I shall have to flourish that in her face just at the beginning.”
Three photographs were shown him, one in ordinary dress, one in
evening attire, one in outdoor costume.
The detective impressed the features of the wretched woman on
his retentive memory. He would recognize her in any garb. He also
carried away with him the important memorandum, the loss of which
the financier had treated so lightly.
Rosabelle accompanied him into the hall for a few last words.
“Up to quite recently, Mr. Lane, you have not been very frank with
me,” she said. “I think now you might try to make amends, and let
me know what led you to fix upon Mrs. Morrice as the guilty party.”
“Well, I could hardly explain very clearly. I began of course with a
general distrust of everybody in the house, for I was sure the thief
was of the household.”
“Including myself, I suppose?” suggested the girl.
“Present company always excepted,” replied the detective with a
low bow. “But seriously, Miss Sheldon, well-brought-up young ladies
of your tender age do not take to burglary as a general rule. Well, as
I said, I suspected from the beginning it was somebody in the house.
I fear I must touch upon rather delicate ground for a moment.
Reasoning from my theory, Mr. Croxton might as well be the criminal
as anybody else, more so because collateral evidence was certainly
very strong against him.”
“You thought, in other words, his employing you through me might
have been a bit of audacious bluff?”
“I reckoned it amongst the possibilities of the case,” was the frank
answer. “Then came the second robbery when Mr. Croxton was no
longer an inmate. This fact gave rise to fresh speculations, for I did
not greatly believe in the theory of an outside confederate, although I
know Mr. Morrice held to it. Then I learned that the original
memorandum of the mechanism was lost; it was no longer possible
to say for certain that the knowledge it contained was confined to two
people, it might have been acquired by more than one other party,
and, of course, from that my area of suspicion was extended. What,
however, finally clinched the matter in my mind, Miss Sheldon—and
this is a feather in your cap—was that conversation which you
overheard and reported to me.”
“It was quite good of you not to give me away, when uncle wanted
to know the source of your information.”
“I am not quite such a brute as I seem, my dear young lady, I
assure you. When I can do a good turn to anybody I like and respect,
believe me it gives me pleasure. With regard to my general reticence
which I know must have offended you very much, you must
remember I have moved so much amongst mystery that I have
become more than a little mysterious myself.”
“And you believe Mrs. Morrice committed these burglaries alone?”
asked Rosabelle.
“I am inclined to think so, although we are quite certain where the
proceeds went to.”
“And what about those finger-prints of the man who was in
Dartmoor at the time of the first burglary?”
“That, no doubt, was an invention, employed more for purposes of
devilment, to lead a detective a useless dance and make a fool of
him. In the second robbery the same game was played, but when
the safe was opened a third time, it was dropped. There were no
finger-prints then, they had been carefully rubbed out.”
“How she could have had the courage,” exclaimed Rosabelle, “and
you know I should not have considered her a very strong-minded or
resolute woman.”
Lane shrugged his shoulders. “Evidently she was in mortal terror
of these two scoundrels, hypnotized by them in a sense. Those
restitutions that were made had certainly a feminine touch. A man
would never have ventured back for such a purpose, anything that
was useless to him he would have destroyed.”
“It is all very horrible and tragic,” said Rosabelle in a sad voice.
“My heart bleeds for my dear uncle. Thank heaven he will have
Richard still left to comfort him.”
“Yes, I am very glad the young fellow is cleared,” said Lane
heartily. “Well, I must be off. Before long I hope to get the whole
details of this miserable affair out of Mrs. Morrice. Good-bye for the
present.”
 CHAPTER XXIV
LANE MAKES A CALL

O N the following morning Lane’s own private car was waiting for
him in Shaftesbury Avenue. He was expecting a message from
a trusted emissary, to whom he had given the three photographs of
Mrs. Morrice, and dispatched to watch the flat of Alma Buckley in
Elvenden Mansions.
About twelve o’clock the telephone bell rang. Lane answered it in
about as great a state of excitement as was permissible to a man of
his strong self-control. At the first words his face lightened. Once
again his instinct had led him right to the presumption that the
wretched woman, crushed under the weight of her misfortunes,
would fly for shelter to the friend of her youth.
“It’s all right, sir. The lady went out with another woman about an
hour ago; they have just returned.”
“Good,” was the detective’s answer. “I am starting now. Maintain
your watch till I come, it won’t take me very long to reach there when
I get through the Piccadilly traffic.”
He got into the waiting car, drove along as quickly as he could,
and halted at a spot a little distant from Elvenden Mansions where a
full view of the block of flats could be obtained. A respectable-looking
man was lounging about, who reported that the two women were still
there. He was quite a discreet person, and one often employed by
Lane on such errands. Not wishing to bring too many people into this
delicate affair, the detective would have preferred to put Sellars on
the job, but that would have been unwise, as the young man was
known to both Miss Buckley and Mrs. Morrice, and might have
scared his quarry away.
He dismissed his subordinate, ordered the car to wait where it
was, and proceeded to Number 5. The door was opened by a
comely buxom woman, whom he rightly took to be Alma Buckley.
“I wish to see Mrs. Morrice on very urgent business,” he said,
proffering his card which bore his name, profession and address.
“You will see from that who I am.”
The woman read the card, and her face paled visibly underneath
the thick rouge she had laid on it. She scented danger at once and
flew to that readiest resource of certain women of not too scrupulous
a nature, a lie.
“No Mrs. Morrice lives here. I am the sole tenant, and my name is
Buckley, Alma Buckley,” she stammered.
“I know quite well you are the owner of this flat, Miss Buckley,”
replied Lane suavely. “But you will pardon me for questioning your
statement. This place has been under observation by an employé of
mine. You and Mrs. Morrice went out this morning together, and
returned about three-quarters of an hour ago. You have not stirred
from it since, therefore Mrs. Morrice is within.”
When she saw he knew so much, she abandoned the fiction and
tried another tack. “It is quite true she is here for a short time, but
she is too unwell to see anybody.”
“Her indisposition must have come on very suddenly then, since
she was well enough to shop or walk about with you for over an
hour. Come, Miss Buckley, let us leave this fencing, it will do your
friend more harm than good. I wish to impress upon you, and
through you upon Mrs. Morrice, that it is necessary I should see her
in her own interests, apart from those of other people. If she refuses
to see me, her future will be jeopardized to an extent she does not at
present realize.”
There was no mistaking the gravity of his manner. Miss Buckley
was a strong-minded woman and capable of holding her own in an
equal encounter. But she recognized that this calm, strong man was
master of the situation.
“Come in, then,” she said, in a tone the reverse of gracious. “I will
see if she is well enough to permit your visit. I must ask you to wait in
the hall, I have no spare apartment to which to show you.”
 Lane was not a man much given to unprofitable moralizing, but as
he stood in the small hall, he could not help reflecting on the awful
havoc which a few hours had wrought in the fortunes of this
wretched woman. From the splendid house in Deanery Street with its
luxurious apartments, its retinue of trained servants, to this middle-
class flat in which there was not even an apartment to which to show
a visitor! What a descent! Truly the way of the transgressor is hard!
In a few minutes, Miss Buckley reappeared and announced that
Mrs. Morrice would see him. She led him into the comfortably
furnished room in which Sellars had interviewed her. The detective
was favourably impressed by the air of decent well-being about the
place: there was no evidence of straitened means. Still, it was a
terrible come-down for the wife of a millionaire.
Mrs. Morrice was seated in an easy-chair, the marks of acute
suffering plainly written on her ravaged features. She nodded slightly
to him, and as she did so, the music-hall artist withdrew, closing the
door after her.
“Your business with me, Mr. Lane?” she said in a very low voice.
“Miss Buckley told you the truth when she said I was not in a fit
condition to receive visitors. But I understand you have important
reasons for desiring an interview.”
Lane wasted no time in preamble. Truth to tell, he lacked the wide
charity of Rosabelle, and had no compassion for the woman who
was ready to sacrifice Richard Croxton without compunction, also
her niece’s happiness.
“As my card will have informed you, I am a private inquiry agent. It
is through me that these discoveries have been made; the
systematic sale of your valuable jewels to supply young Brookes with
money for his extravagant needs; the fraud you and Sir George
Clayton-Brookes have practised in passing him off as the nephew of
both. Since you left the house yesterday, serious as these things are,
we have discovered something more serious still.”
At these ominous words he saw a shudder shake her body, but
she uttered no word.
 “I discovered the original memorandum of the mechanism of your
husband’s safe, locked up in one of your boxes, securely as you
thought; I have it in my pocket at the present moment. At last we
have put our hands upon the actual criminal who purloined the
million francs, the loose diamonds, committed the second small
robbery, made some inconsiderable restitution in the third—the
criminal who left an innocent man, Richard Croxton, to suffer for her
crime, reckoning on the fact that the evidence was so strong against
him that one would not be tempted to look elsewhere.”
He paused, expecting that she would show some sort of fight, say
something, however feeble and unconvincing, in denial. Had he
been dealing with a woman of the calibre of Alma Buckley, she
would have lied and turned and twisted and fought him as long as
she could. But Mrs. Morrice was made of weaker stuff. Rosabelle
had been right when she said she had never regarded her aunt as
resolute and strong-minded.
She was trembling all over. “What does Mr. Morrice intend to do?”
she asked in a faint voice, and admitting her guilt by putting the
question.
“This is his last word. Write him a full confession giving him ample
details of the burglaries, and equally important, the actual truth about
young Brookes, in what way he is connected with you. If this is done,
secrecy will be preserved.”
“And if I refuse?” she asked in the same faint voice. But Lane was
sure she would not refuse in the end.
“In that case, he will publish the facts to the world, and he will not
give you one penny towards your support.”
Of course, Lane had not received any such instructions from
Morrice, he was acting entirely on his own initiative, judging that he
knew better than the financier how to wring the truth out of obstinate
malefactors.
She rose. “Excuse me for a few moments while I speak to my
friend. Mr. Morrice has you for an adviser, I have only her to consult.”
 She was so broken down and unnerved that she almost tottered
through the door which Lane held open for her. While she was
absent he kept a sharp look-out on the hall from force of habit. But
he was quite sure she would not attempt to run away. What was the
use of flight? It would only supply additional evidence, if further were
needed, of her guilt.
At the end of half an hour she returned, a little more composed
than when she went away, the two old friends had had a long talk
together.
“Sit down, Mr. Lane. I will sign any confession you like to draw up,
on the understanding that it is shown only to the persons actually
interested. I will answer truthfully any question you like to put to me,
and give you all the details of my life since I left the village of
Brinkstone.”
 CHAPTER XXV
MRS. MORRICE’S CONFESSION

A ND this was the story told by Mrs. Morrice, as she sat facing
Lane in the small but elegantly-furnished room of her friend
Alma Buckley’s flat. She told it throughout in a low voice which now
and then broke down, indicating that she was on the verge of tears.
For the most part it flowed forth in a continuous narrative, but now
and then she paused to answer some question, to give fuller details
of some incident, at the detective’s request. She informed him at the
beginning that although Miss Buckley knew much—she did not know
everything—that she was ignorant of the robberies.
Lane thought better of the music-hall artist after that. From the
readiness to tell a lie, he had judged her to be a fairly unscrupulous
woman, with full knowledge of her friend’s criminal acts, probably
drawing a handsome share of the proceeds. It was evident that she
drew the line at actual lawbreaking.
Lettice Larchester and her father had gone straight to London after
leaving Brinkstone, and established themselves in some cheap
lodgings in the Fulham district. Larchester had left the quiet little
village for more than one reason. For one thing he had grown tired of
it, had become weary of the ignorant people who frequented the bar
of the Brinkstone Arms, his visits to which constituted his sole social
recreation. Then the inspiration which he first derived from the
charming scenery around had waned in its intensity, and stimulated
him no longer. He was also rather weary of working continually at the
one theme of landscape, and trusted that by moving to London he
might break fresh ground amongst dealers and infuse variety into his
rather monotonous art.
This hope was not realized to any considerable extent. For the first
three months he displayed a certain feverish activity both in the
business and the artistic side of his calling, with decidedly beneficial
results to his exchequer. He was fairly moderate in his use of
alcohol; out of every payment he received for a picture he put a
small proportion in the Savings Bank for “a rainy day” as he
announced with importance to his hopeful daughter, who really
began to believe he had made up his mind to turn over a new leaf.
Alas, at the end of those three comparatively bright months, the
old deterioration set in, the old dissolute habits once again assumed
mastery of his relaxed will power. He had long bouts of
intemperance, during which he could not do a stroke of work. By
degrees the small savings were withdrawn from the bank to pay rent
and purchase the bare necessities of life.
Then came the sudden death of old Mr. Buckley, and the arrival in
London of his daughter Alma. The girls had corresponded
occasionally, and the first thing Alma did when she reached London
was to visit her old friend. The acquaintance which had been so
close in the country soon ripened again, and this time into a life-long
friendship. With her father now beyond hope of salvation drifting
rapidly downward, this companionship was a great consolation to
Miss Larchester. Old Buckley had left more money behind him than
people would have expected, and every penny had gone to the
daughter. It was, of course, only a very modest competence, but it
removed the girl for ever from any fear of poverty so long as she did
not touch the capital, which being a very level-headed young woman
she was never tempted to do. She was a very kind friend to the
Larchesters—helping them often in their hours of need, which grew
more and more frequent, as the artist’s powers of self-control waxed
weaker and his capacity for work declined in consequence.
She did not, however, propose to live on a small income all her
life. Her great ambition was to go on the stage, but as her several
attempts in this direction met with no result, she grew less ambitious,
and in time blossomed into a music-hall artist who could generally
rely upon engagements at moderate fees which made a very
pleasant addition to her private income.
She was fairly launched in this career when Larchester died after a
lingering illness, the cause of death being an internal malady which